Buckle up. The road of consumer change is fixing to get winding and the grade, steep.
“The next half-century marks key points in continuing trends,” says Thomas L. Mesenbourg, acting director of the U.S. Census Bureau (USCB). “The U.S. will become a plurality nation, where the non-Hispanic white population remains the largest single group, but no group is in the majority.”
The U.S. is projected to become a majority-minority nation for the first time in 2043. Minorities represent 37% of the U.S. population currently, but are projected to comprise 57% of the population in 2060.
In December 2012, USCB estimated the U.S. population at 314 million; it pegs the population in 2050 at 399.8 million. Though significantly less than the agency’s previous quadrennial projections, it still represents an increase of 27.3% in fewer than four decades.
According to USCB, the population is projected to grow more slowly over the next several decades than previously estimated, due to lower projected levels of births and net international migration.
Incidentally, the U.S. population represents approximately 4.5% of the world’s population today.
Melting pot continues to thicken
The non-Hispanic white population in the U.S. is projected to peak at 199.6 million in 2024, up from 197.8 million in 2012. Unlike other race or ethnic groups, however, it is projected to slowly decrease, falling by nearly 20.6 million from 2024 to 2060.
Meanwhile, the aforementioned Hispanic population is projected to more than double, from 53.3 million in 2012 to 128.8 million in 2060. If this is correct, by 2060, nearly one in three U.S. residents would be Hispanic, up from one in six today.
The black population is expected to increase from 41.2 million to 61.8 million over the same period. Its share of the total population would rise slightly, from 13.1% in 2012 to 14.7% in 2060.
Meanwhile, the Asian population is projected to more than double, from 15.9 million in 2012 to 34.4 million in 2060, growing from 5.1% of the U.S. population today to 8.2% by 2060.
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Moreover, the ethnic and racial lines are getting blurred.
“Once a mainly biracial society with a large white majority and relatively small black minority — and an impenetrable color line dividing these groups — the U.S. is now a society composed of multiple racial and ethnic groups,” say authors of the 2011 Congressional Research Service report, The Changing Demographic Profile of the United States. “Along with increased immigration are rises in the rates of racial/ethnic intermarriage, which in turn have led to a sizable and growing multiracial population. These trends are projected to continue for the next decades.”
Millennials poised to drive
The U.S. population is growing older as it becomes more ethnically blended.
Baby boomers (born between 1946 and 1964) have long been the leading market target. They numbered 76.4 million in 2012 — about 25% of the total population.
The population aged 65 and older is expected to more than double between 2012 and 2060, from 43.1 million to 92.0 million. According to USCB, the older population would represent just over one in five U.S. residents by the end of the period, up from one in seven today.
According to beef checkoff-funded research, the marketplace is fractured into three major generational cohorts: baby boomers, generation X (which followed the boomers) and millennials (born 1980-2000). At 80 million, millennials outnumber boomers and are set to carry the mightiest market stick.
That’s why millennials are a research priority for the beef industry.
Checkoff-funded studies in late 2011 and 2012 revealed that, although this generation enjoys beef, some issues hinder their consumption of it.
For one, Wendy Neuman, director of market research at the National Cattlemen’s Beef Association (NCBA), a contractor to the beef checkoff, says millennials have little experience with shopping for beef, or preparing it once they get it back home. They recognize beef’s nutritional benefits, but don’t necessarily know the appropriate number of servings, or understand how beef fits in a healthy diet and active lifestyle.
Millennials view food as a route to diverse cultural and social experiences. But, 54% of them say it’s hard to know which cuts to choose in the meat case. In part, because of their lack of experience preparing beef, 56% reported disappointment in the results when cooking hamburgers (compared to 31% of boomers); and 55% are disappointed when they cook steak (compared to 40% of boomers). Flavor drives the disappointment for burgers. Tenderness is the reason for steak disappointment.
The good news is that millennials are knowledge seekers. In the research, 75% said they wanted information about steaks, and how to prepare and cook them; 55% wanted information on preparing and serving beef to their children.
Millennials tend to buy the same cuts rather than diversify their choices, too. However, 50% said they would buy more beef if they knew more about the different cuts.
One startling find in the 2011 research was that millennial parents are limiting their children’s consumption of beef. Besides being the key consumer group of the future, these millennials will influence the following generation.
The checkoff-funded “Millennial Parent” study last year asked why millennials limit beef in their children’s diets. One reason is they perceive chicken as being easier to prepare. Plus, kids prefer the taste of chicken (including strips and nuggets), and it can be served in a wide variety of ways.
Millennial parents also perceive other meats as more heart-healthy than red meat.
Strategies need to evolve
Rick McCarty, NCBA vice president of issue analysis and strategy, and John Lundeen, NCBA senior executive director of market research, summarized some megatrends that will affect the beef industry in coming years.
•New, sometimes smaller packaging: “Households composed of 1 to 2 persons now represent 62% of total households. In addition, some families are now eating more à la carte meals,” the duo says. “Retailers are going to need several merchandising options as they reach out to these consumers.”
Checkoff-funded research indicates strong consumer interest in packages of small, 4-5-oz., expertly trimmed steaks in the meat case, as well as on the restaurant menu.
Market research also indicates that beef’s subpar performance in the microwave is a limiter to beef consumption.
•Ethnic shifts change the landscape: “Not only will tastes shift, but the beef industry must be able to satisfy increasingly diverse consumer palates,” McCarty and Lundeen say. “This will create an explosion of taste options to enjoy, particularly for millennials, who embrace ethnic flavors to a much greater degree than older segments of the population.”
•Technology aids decision-making: According to McCarty and Lundeen, research indicates millennials are much more likely than other consumers to use a “shopping app” at the supermarket — an app that tells them, for example, what’s on sale and where to find certain foods in the store, and provides recipes and suggest ingredients.
•More product, consumer targeting: “The beef industry has come up with several new beef cuts [Denver Cut, Flat Iron Steak, etc.] that have helped make steak-eating more affordable, and increased the value of the carcass to the beef industry,” Lundeen and McCarty say. “Today, half of U.S. households are low- to moderate-income households, and these consumers are typically higher-frequency beef eaters. Innovation is needed to find affordable beef options for all income levels…”
•More convenient beef products: “Nearly one-third of consumers believe that 40 minutes is too long to wait for their meals, from start to table, and 70% say an hour is too long. Add to that the fact that 70% of women now are working — it’s easy to see that convenience is critical,” McCarty and Lundeen explain.
“While ground beef has been the fallback product for the time-conscious, more convenient whole-muscle cuts, including microwaveable roasts, could boost demand. So, too, could easy beef options that quickly assemble into one-pot meals, an increasingly popular choice,” they add.
•“Trust me” is more than a slogan: “Wall Street scandals, political scandals, product recalls, pyramid schemes, economic meltdowns, corporate layoffs … it’s no wonder consumers today have become cynical,” McCarty and Lundeen say. “How does the industry develop a trusting dialogue with those who are pessimistic but love our product? Connecting with consumers involves creating trust in how beef is produced, and assurance that beef is a safe, wholesome, and sustainable food. Consumers, indeed all stakeholders, are demanding more transparency regarding how food is produced.”
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