Change Your View to Understand Demographic Change

Image: Ernie Sapiro

When you hear or read the word “demographic” you likely picture statistics as they pertain to the population and the groups within it. 2017 VIBE keynote speaker and demographer Ken Gronbach wants to change your thinking. To him, demographics are the roadmap that leads to what’s next for your business. And while it may be contrary to a conventional approach, Gronbach wants part of your shift in thinking to include getting money out of your head. Instead, focus on people and information. Money has value, according to the keynote speaker, because we “pretend it does.” The value is in people. The people we have served, the people we serve currently, and the people we’re competing to serve in the future. Base your beverage decisions on people.

The industry, the country, and indeed the world are in the midst of transformation, and some of that includes population shifts and market changes. Change can seem like a four-letter word at times, but Gronbach sees opportunity. His keynote speech encouraged VIBE attendees (and readers) to look for opportunities and spend money to develop them. With the proper analysis and understanding of demographics – Gronbach’s wheelhouse – operators can more confidently identify and predict opportunity, no psychic ability needed.

"To predict the future you don't need a crystal ball, you simply need math," says Gronbach.

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You also need vision. Beverage professionals, says the demographer, must be able to see ahead in order to succeed. One of the most effective methods of looking ahead accurately is to understand your “talent pool.” That is, understand the population and your market. Once you understand the critical mass of people, you will understand your business better. Large groups are very predictable: we all basically do the same things at different ages.

For example, Gronbach once worked for Honda. His understanding of the market was simple: If people are reaching the age when they buy motorcycles, Honda will sell more motorcycles. If that pool shrinks, Honda will see less motorcycle sales. So, how do you make that work for you? You count people. Gronbach suggests that you stop studying psychology and start counting people. Why? Because you need to understand the critical mass of your market.

People tend to think that demographics are difficult to understand, but Gronbach doesn’t see it that way. As he sees it, if your market is shrinking and the generation that’s heading your way is tiny, it doesn’t matter how great your products or services may be. It won’t matter how clever your marketing campaigns are, either: your business is going to go down. If the market coming your way is huge, you’re going to sell a lot more of whatever it is you sell.

Following that line, things are looking good for America. Gronbach noted during his keynote that the US is the only industrialized nation having babies. That is, of course, significant: without them we don't have consumers. Luckily, your market is growing. You haven't yet reaped the benefit of Gen Y, the generation Gronbach identifies as being between the ages 13 to 32.

As you can doubtless understand by now, demography requires good information. That means you need to dedicate resources to research. Fortunately, Gronbach is a research and interpretation machine, and he shared some of his findings during his keynote, which I will now share with you.

 

On overpopulation:

We're not going to overpopulate the world because we're having fewer and fewer kids. We'll likely reach 10B (we’ve reached 7B so far) people and then drop.

 

On growth:

Africa should reach 4B people by 2050 once those countries develop consistent health care, improvements in technology, widespread access to food and clean water, etc.

 

On Baby Boomers, Gen X and Gen Y:

Don't count the Baby Boomer demographic out. They account for 78.2M people as opposed to Gen X which is made up of just at 69.5M. There are 86M people identified as Gen Y.

 

More on Baby Boomers:

Baby Boomers are "descending on Florida like locusts." This means the beverage industry will be influenced there, because Boomers like to go out. Healthcare and eldercare will explode.

 

More on Gen Y:

In the workplace they require purpose, transparency and integrity, fairness and empathy, technology-focused employers, and they won't work for somebody “mean.” This group will set records with the amount of weddings they will have, and they'll need reception venues and beverages for those weddings. 25M housing units are needed because of Gen Y; the economy is housing and housing is the economy.

 

On women consumers:

Look for women to lead, and expect women to outnumber men in colleges in the United States.

 

On the Latino consumer:

Latino immigration to US was 40M for Gen X, filling in exactly where we needed those people. Right now, 17% of the US population is made up of Latinos. If you’re not resonating with this demographic, you’re not succeeding.

 

On the Asian consumer:

Asian people make up 5% of our nation. Gronbach predicts that number will be 10% as more Asians move the United States.

Finally, Gronbach left 2017 VIBE Conference attendees with this: There are three types of people in the world, those who can count and those who can't.

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