Ethnicity and stage of life influence food purchases; market diversification and fragmentation are also factors
RED DEER — Aging baby boomers, maturing millennials and more immigrants are changing the Canadian landscape.
“The demographics and economic changes we are going to experience in the coming decades are not going to be extensions of what past trends have been,” said Andrew Ramlo, executive director of the market intelligence firm Urban Futures.
Demographics define consumer markets and can analyze where blocks of the population are in their personal life cycles, he said at the Alberta Beef Industry Conference held in Red Deer Feb. 21-23.
Relying on Statistics Canada information, Ramlo said a typical Canadian in the early 1980s was in his early 20s and just entering the labour force, starting a family and getting a home. That generation is now in their mid-50s and moving toward retirement.
While the aging Canadian population is a major preoccupation for governments and society because of the growing need for more social services, other changes are happening as well.
Younger Canadians are living at home with their parents longer and having fewer children later in life. As well, more immigrants are arriving to keep the country’s population stable at around 36 million.
More young people were born outside of Canada.
In 2016, 14 percent of 15 to 24 year olds were born outside of Canada, compared to 20 years ago when 11 percent of this age group were new immigrants.
“Ethnic diversity is certainly increasing for that younger generation,” he said.
That population group will double by 2031. More than half the population of Toronto and Vancouver is already part of a visible minority.
Calgary’s visible minority population sits at 36 percent and Edmonton at 38 percent.
“You are an ethnically diverse population, at least in terms of the two metropolitan regions,” he said.
A person’s life stage also affects decisions such as food purchases.
The average household spends $5,769 on food. These are mainly families in the 35- to 44-year-old group with children.
Groceries for one person is around $2,000. That spending stays the same until the person is about 74.
The grocery basket shows meat is one of the major purchases.
The average household spends $1,038 on meat, $1,332 on non-alcoholic beverages, $908 on dairy and eggs and the rest is proportionately less for items such as produce.
When it comes to food producers, Ramlo said 52 percent of farm owners and managers are 55 or older while 31 percent of farm workers are younger than 24. Those managers are part of the baby boom generation transitioning into retirement within the next 10 years.
Generations are divided by 20 year increments, and as 9.23 million baby boomers are on their way out, the next population bulge has appeared. Generation X was born between 1966-85 and makes up 9.8 million people, while millenials born between 1986-2005 are at 9.63 million.
The most watched group is probably the millennial generation. These are seen as an entitled group with ambition for fast tracks to promotion at work but less loyalty to an employer.
Ramlo argued that they may be young but they are probably no different from past generations. They want benefits, bonuses, flexible work hours, a pension, decent wages and a chance of promotion.
While this generation is also technologically adept, it is also less fertile, which is going to affect Canada’s future economy.
Births surged from 1921-71, and the average woman had 3.94 children after the Second World War.
The replacement level is 2.1, but since 1971 Canadians have been below that with 1.6 children per woman. They are also waiting until they are 30 compared to women 30 years ago, who had their first child at around 22 or 23 years old.
“We haven’t been replacing ourselves, and we are going to see the long-term consequences of that over time, ” he said.
At the same time, life expectancy has improved for men and women.
In 1950, the average life expectancy for men was 65 and 69 for women, but in 2017 men could expect to live to 79 and women to 83.
Within that generation, there has been a shift from many elderly widows to more elderly couples.
Ramlo foresees a future with increasing diversity, but no one can forecast changing values and ethics.
Market diversification and fragmentation will offer new opportunities and challenges.
People have gone from being like vacuum cleaners where they ate everything to making a diverse set of choices and decisions.
“As people’s income grows, the proportion of income they spend on food actually declines,” he said.
With more money to spend, they also buy more luxuries. Eventually those luxuries become needs.
That changing attitude could shape future beef and veal production. Per capita consumption has dropped steadily, and if trends continue, the average Canadian will eat about 12.7 kilograms of beef and veal by 2041. However, increased exports to countries with growing incomes and surging populations could see production remain relatively unchanged. Changing tastes and diversity could turn beef into more of a specialized product where people look for something different such as natural, organic or grass-fed.
It could go the same way as cheese, where consumption increased by 25 percent from 1960-2016 but in a fragmented way.
Cottage cheese and processed cheese consumption is down by about 30 percent.
Cheddars grew marginally, but growth was developed for higher priced variety products.
Canada’s largest beef customer is the United States, where there are about 328 million people with shifting demographics.
Population forecasts for 2036 suggest the U.S. will grow to 370 million. The largest growth is in the Hispanic population, which is expected to increase by 67 percent in that same time frame. That ethnic group has its own food preferences, which might have an overall market impact.
In Asia Pacific regions, the average gross domestic product is increasing and people have more purchasing power. This will have a major impact on world markets as their diets change, Ramlo said.
In 2000, 56 percent of calories in developing countries were derived from cereals and 20 percent from meat with the rest coming from dairy and vegetables. By 2030, about 40 percent of calories will come from cereals and vegetables and 30 percent will come from meat products.
With that kind of added demand for meat, production needs to double by 2050.