For almost 60 years now, marketers of all kinds have been following the whims and mores of the largest, most educated, most affluent—and most fickle—group of consumers ever amassed. The Baby Boom, born between 1946 and 1964, has moved from hippies and yippies to yuppies and dinks (dual-income, no kids) to parents and homeowners—and even Republicans. Now, the boomers are amid change again as the leading edge of the generation begins to retire and the rest become empty nesters.
Empty-nest syndrome, defined as the anxiety that afflicts parents when their children pack off for college or a life of their own, is likely to be relatively short lived for most boomers. That’s because they are largely affluent, world-wise and convinced that although the years are passing, they will never grow old.
This trend has significant implications for the restaurant industry; indeed, some of the effects of boomers-as-empty-nesters are already evident.
Boomers now make up roughly 28 percent of the U.S. population. Some 33 percent of them are considered affluent, that is, they have annual household incomes exceeding $75,000, according to Roper Reports, a New York-based research arm of GSKNOP, LLC. And boomers make up 49 percent of all affluent U.S. households. In terms of disposable income, that percentage is likely much higher given the asset appreciation of the past 20 years and the fact that boomers still dominate the work force, particularly in the professional class.
“I think we are going to continue to see the baby boomers redefining everything,” says Kathy Sheehan, a vice president at Roper. “The conundrum for marketers, including restaurants, is that a lot of them want to advertise to attract young people, but when you look at who has the most disposable income, it’s the baby boom.”
For the restaurant industry, this will mean a greater focus on food variety, quality and the overall dining experience as opposed to convenience, fast service and kid friendliness.
Industry analysis from Roper bears this out.
Claritas, a San Diego-based demographic firm, also has data that support the notion of affluent empty nesters as bon vivants of a sort. They are more than twice as likely, for instance, to choose to eat at a full-service, fine-dining restaurant (an index of 222 against a norm of 100 for the general population). At the same time, they also prefer gourmet coffee outlets, casual Italian and Asian restaurants and independent delis. Hot dogs and pizza also score high with this group. They are fickle indeed, but their eclectic tastes reflect their life experiences. They have traveled and thus been exposed to more types of cuisine. And many if not most grew up at a time when the restaurant industry was made up primarily of independents; McDonald’s was just getting started in the middle of the baby boom, and Howard Johnson’s was about the only chain most could name, at least in the East.
“The baby boom is a big, broad spectrum,” says Tom Spencer, vice president and senior practice leader for Claritas. “And they go to a broad range of restaurants because they tend to eat out more.”
Before you break out the beef Wellington, which many boomers may remember fondly from their youth, bear in mind that this group is also quite health conscious. Spencer parsed the Claritas data on this subject and found that affluent empty nesters are more likely than the general population to avoid fried foods. They also look for restaurants with low-carbohydrate items, order differently when given nutritional information, avoid high- fat foods and are slightly more likely to be following a low-carb diet. They do want restaurants to divulge more nutritional information, including calorie content.
The bottom line appears to be that an offering of a varied, somewhat exotic menu coupled with fresh, healthy ingredients and an entertaining environment will go a long way toward attracting and keeping this consumer group as customers. But first, says Spencer of Claritas, restaurants must decide who the target customer is. “The question is which restaurants of mine serve this market, and if there is a high concentration of these affluent empty nesters in my area, what is the best way to tap into that potential.”
Sheehan of Roper points to two chains that she thinks have found a good recipe for attracting these boomers: P.F. Chang’s and Cheesecake Factory. “They are chains, but they also have some exotic cuisines,” she says.
ther specialized chains, to her mind, have a significant opportunity to grow with this market. The trend, she believes, will last for at least the next 10 years.
Perhaps the best news in the research from Claritas and Roper is for independents and small chains, however. The combination of unique cuisine, particularly if it’s Italian or Asian, and the fine-dining experience will attract empty nesters. Operators would be well advised to heed the wisdom of the immortal Willie Sutton and go where the money is.