Why ‘Active Agers’ Could Help Drive Post-Pandemic Sales
A few years ago, Bart Watson, the chief economist for the Brewers Association, decided to stage a craft beer tasting for the residents of his grandmother’s retirement community. Many tried an IPA for the first time and, as Watson recalls, “were kind of shocked that anybody would make a beer that bitter.” Yet one man loved it. “He told me, ‘It’s the best beer I’ve ever tasted. I’m going to buy a six-pack.’”
The experience revealed a valuable lesson: While many assume older drinkers become set in their ways as they age, there are many consumers over 50 who are open to new experiences—if the industry makes the effort to educate and recruit them, believes Watson.
The beverage alcohol industry has prioritized young consumers for decades, hyper-focusing on millennials in terms of marketing spend and energy. The 55-plus demographic is often disregarded because “they’re seen as already being set in their preferences with fewer consumer years” ahead of them, says Watson.
Yet this age group has been evolving. They consume more alcohol and more readily embrace innovation than past generations. The ongoing pandemic has provided new evidence: During quarantine, a growing number of older drinkers have pushed out of their comfort zones and ordered alcohol online, many for the first time. Drizly, for example, saw a rise in purchasing by those over 50 years old.
“After the pandemic, will they also start looking around a lot more and feel more confident to try new things?” wonders Tara Empson, the CEO of Empson USA. This, she believes, could be a new era for the older drinker.
For an industry facing a post-pandemic economic recovery, as well as a decline in consumption amongst younger consumers, older drinkers with deep pockets could play an important role. But figuring out how to maximize their spending power will require innovation and hard work, and a toolbox that includes everything from new products to packaging and even marketing strategies.
A Growing Population of ‘Active Agers’
The over 50 demographic has been evolving for decades. The World Health Organization identified this in 2002 when it introduced a policy framework for “Active Ageing,” or the tendency of older people around the world to remain active for much longer than in the past thanks to advances in medicine and the adoption of healthier lifestyles.
They drink more beverage alcohol as they age, too. According to a December 2020 report from Rabobank, written by beverage analyst Bourcard Nesin, consumers over 50 accounted for 39 percent of U.S. alcohol consumption in 2019, up from 29 percent in 2007. The report attributes this shift to a population that is aging overall, an increasing share of the 50-plus population that drinks regularly, and the fact that baby boomers and older members of Gen X have established a long-lasting association with alcohol as an important part of social life, having entered adulthood at a period of historically high alcohol consumption in the 1970s and 1980s.
This trend plays out across many beverage alcohol categories. As of November 2020, Wine Intelligence found 37 percent of regular wine drinkers in the U.S. are now aged 55-plus. “That has been steadily increasing as a proportion of total wine drinkers in the U.S.,” says Lulie Halstead, the chief executive of Wine Intelligence, adding that this population also tends to drink more frequently than younger consumers.
According to Simmons Market Research data provided by the Distilled Spirits Council, the percentage of younger baby boomers (aged 57 to 75) who enjoy spirits has also increased, rising from 43.9 percent in 2007 to 46.4 percent in 2017. “The increasing popularity of spirits among baby boomers is consistent with the trends we have seen from millennials and Gen X,” says David Ozgo, the senior vice president of economic and strategic analysis at the Distilled Spirits Council.
That’s why industry observers like Lester Jones, the chief economist for the National Beer Wholesalers Association (NBWA), have been urging the industry to redirect its focus towards older drinkers over the past decade. “Why aren’t you chasing the dollars?” he asks. “Don’t chase the millennials who don’t have the dollars … Baby boomers are equal in size demographically, and they have more money.” The December Rabobank report corroborates this, noting that per capita alcohol spending of 65-plus consumers has doubled since 2004.
Another missed opportunity is assuming that older consumers won’t participate in certain categories, when in reality the industry never marketed to them. Craft beer is one example of a segment that older consumers largely missed when they were younger. According to 2020 Nielsen-Harris data, only 34 percent of 55- to 64-year-olds and 21 percent of 65-plus adults are craft beer drinkers—though those percentages are up 7 percent and 1 percent, respectively, since 2015. Far more consumers aged 21 to 34 and 35 to 44 reach for craft beer (60 percent and 56 percent, respectively).
“The beverage alcohol industry changes so much over time that I think there are opportunities to engage with older drinkers on new products that they weren’t offered before,” says Watson. The recent trend of craft beer in smaller sizes could appeal to older drinkers, whose drinking habits tend to be much more moderate when compared to younger drinkers, he notes.
While open to new drinking experiences, older consumers do tend to be highly loyal once converted, says Chad Stone, the vice president of insights and innovation for Breakthru Beverage Group. “We see greater brand loyalty in consumers aged 35 to 64, and even more so with those over 65,” he says. “This is a demographic that tends to favor value and traditional brands, choosing to stick to options that they have known and are comfortable with.”
Embracing New Formats and Low-Alc
Packaging innovations can play an important role in appealing to maturing drinkers, believes Dave Derby, senior vice president of marketing for Trinchero Family Estates. The company’s Sutter Home brand manages to appeal to consumers young and old: While over half of its consumers are Gen X and younger, the brand remains very strong with older consumers, the “loyal drinkers that have seen it as a trusted national brand for decades,” he reports, partly because the brand has evolved to meet their needs.
Older consumers have embraced Sutter Home’s newer formats like single-serve, 187-milliliter bottles with easy-to-open capsules, 500-milliliter Tetra Paks, as well as the recently introduced three-liter boxes.
According to Wine Intelligence’s Halstead, older drinkers have a high propensity to purchase boxed wine due to perceived value and convenience. They are also not as concerned as younger people about the image their wine choices present to others.
Another favorite among older wine consumers, Derby says, is Trinchero’s alcohol-removed wine brand Fre, which is also packaged in single-serve cans.
Low- and no-alcohol and other health and wellness-focused products will increasingly appeal to older drinkers in all categories, Jones believes. He points to Samuel Adams Boston 26.2 Brew (4.5% ABV) and no-alcohol brewery Athletic Brewing Co. as examples of products that could potentially appeal to older drinkers.
Marketing Directly to Older Drinkers
“Local execution” may be one effective strategy for reaching older consumers, says Rabobank’s Nesin, suggesting companies may want to consider advertisements that target retirees on local Florida television, for example. “[An ad] can say something like, ‘hey, when you’re in retirement, it’s five o’clock all day!,’” he says.
Promotions or merchandising executions near the growing number of retirement communities across the U.S. also work well; Trinchero, for one, has developed a sales initiative specific to senior living centers for Fre.
In fact, many of these retirement communities, like Latitude Margaritaville, market themselves to active agers by promoting alcohol occasions. “If you look at the demographic profile of the United States,” says Jones, “we are a country that is growing older. There will continue to be a greater number of places that these people are going to live.”
Experts also suggest that advertising can be more shaped to appeal to the lifestyles of these older consumers, and how they consume alcohol. While younger consumers tend to drink a lot at particular occasions, older drinkers drink regularly but much more moderately.
“We can say, ‘this is a product to be savored after dinner,’ instead of featuring a scene at a party,” says Nesin. “It might be, ‘let’s go and hang out at our cabin in the woods.’ That’s an occasion that I think really speaks to older groups.”
Seeking out a brand spokesperson who reaches across demographic groups also makes sense; in his report, Nesin used George Clooney as an example of someone who appeals to both older and younger consumers.
Finding Older Consumers Online
“The pandemic helped a lot of older people shop online for the first time,” says Nesin. While he believes many older consumers will want to return to in-person shopping when it’s safe, “a lot of online buying is going to stick around,” he says, particularly for platforms that offer unique benefits or shopping experiences.
10th Mountain Whiskey & Spirit Co., located in Vail, Colorado, has spent years building a fan base of middle-aged and older drinkers out of its tasting room, and watched as its ecommerce sales skyrocket during the pandemic. “I think that was a bit of a surprise—seeing how quickly people adapted,” says Ryan Thompson, the brand’s founder.
The company has ramped up its online advertising campaigns, mostly on Facebook. “Especially for the 50 and older demographic, there’s a lot of time spent on Facebook, so you want to go where the eyeballs are,” adds Thompson.
Napa-based Stefan Blicker, the owner of wine website Last Bottle Wines, has also seen his business surge. The pandemic “was like a giant cortisone shot,” for ecommerce by forcing older people online. “It really hyper-accelerated that trend that was already in motion,” he says, and estimates his business has grown by 100 percent since the pandemic.
Blicker says consumers aged 55-plus comprise the largest age group for revenue; while they buy less wine than younger buyers, they purchase more high-end bottles. The conversational tone and streamlined simplicity of Last Bottle Wines, which showcases a discounted premium wine each day until it sells out, also appeals to an older consumer. “It kind of duplicates the sense of talking to someone in a wine shop,” he says. “You can get a good feel for what we do, what we offer, and there’s a lot more of a comfort level buying online now than there was a year ago.”
The potential for converting older consumers to ecommerce shopping is just being tapped. According to Halstead, only 14 percent of baby boomers and older have purchased wine online in the past several months, compared to 41 percent of millennials. “Older consumers tend to purchase from a narrower set of channels,” she explains, typically dominated by supermarkets and large liquor stores, so there remains a huge opportunity for online buying growth.
Understanding a Complex Demographic
Nesin believes the industry has a lot more work to do when it comes to understanding the older drinker. After all, it’s hard to generalize a demographic as large as over-50 in the U.S. “I think the whole infrastructure around marketing has targeted young people and focused on young people for a long time,” he says, “and I think understanding the usage occasions for older consumers is going to take a long time too.”
Many trade professionals are beginning to see the wisdom in doing just that. “Right now we’re trying to figure out how to grow and expand the market,” says NBWA’s Jones. He believes the beer industry in particular is in a golden age of innovation with more room to focus on older drinkers, and the “next 10 to 15 years should see new products emerge that appeal more to the over-50 crowd.”
Across all beverage categories, spending the time and effort to understand and target older drinkers will pay big dividends down the road, says Halstead. “When it comes to the idea of active, proactive, adventurous, don’t write people off just because their age might start with a 5 or a 6 or a 7,” she says. “Younger drinkers are important because they’re ‘now’ and they’re our future, but older drinkers are ‘now’ at the moment as well.”