By Mark Dempsey
It has often been said that if there is one constant in life, it is change. The typical Canadian consumer and the households in which they live look noticeably different today than they did 20 years ago – and eating patterns do too. Demographic changes are one of the biggest factors shaping the future of hospitality and foodservice. Here are five key trends to watch:
1. Smaller households
Single-person households in Canada are six million strong and growing—the highest in history — and, according to Statistics Canada, 61 per cent of Canadian households are adult only. The typical size of a Canadian family is three persons per household and more than 15 per cent of Canadian households are headed by lone parents.
Smaller households, in many cases, are a long-term choice — adults choosing not to marry or having fewer children. This has wide-ranging implications for food and beverage marketers and foodservice operators in terms of new product development, packaging and positioning, restaurant seating design and menu development.
2. A multicultural mosaic
Canada’s population is increasingly diverse, with almost one-third forecast to identify as a “visible minority” by 2031. Half of that growth is expected to be driven by South Asian and Chinese immigrants. This provides an opportunity for restaurant operators and foodservice suppliers to respond with innovative, Asian-inspired offerings that cater to this demographic group. Based on NPD’s report Vision 2020, Chinese, Cantonese, and Szechwan dishes are forecast to grow strongly over the next seven years at a rate of about 30 per cent.
We must also prepare for the fact that the younger generations are far more multicultural than the older generations. Asians in particular make up a growing share of the youngest generations in Canada, and as they age they will have a growing influence on food trends. The key lesson here is the food cultures of each ethnic group are influencing overall eating patterns. Understanding the impact of these sizeable population segments on food and beverage consumption and use of foodservice is critical to recognizing growth opportunities.
3. Aging Baby Boomers
The Baby Boomer generation is considering retirement, becoming empty nesters, and developing health ailments, all of which are typically associated with major changes in the way we approach food and beverage consumption. While shrinking in size, this generation is too large to ignore. Baby Boomers are less likely to be driven by the latest fad and more by what they need to sustain their health and lifestyle. Look to assist them by letting them know how what you offer will address their needs.
4. Shrinking middle class
The share of the Canadian population that is considered middle income has been shrinking over the last two decades. In the past, those in the middle income bracket typically moved up into higher income levels, but the opposite is true now. Declining or stagnant wages and a growing income gap over the past 30 years have caused many Canadian families to slip out of the middle class. Since the middle class has historically fueled spending on everything from housing to cars, a smaller middle class has wide ranging impact on the economy, including food and beverage consumption.
Statistics Canada reports that the median household income in 2013 was $76,550, not statistically different in real terms from the 2009 median of $68,410. Changes in median income reflect several trends: an aging population, changing patterns in work and schooling, and the changing makeup of the Canadian family as well as long- and short-term trends in the economy.
5. The new norm: A challenging employment environment
The Canadian unemployment rate was seven per cent in August 2015, its highest level since August 2014. A solid 12,000 jobs were added in August. In Canada, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force. The unemployment rate increased to its highest level in a year as more people searched for work. In August, employment increased among women aged 55 and older, while it edged down for men and women aged 25 to 54. There was little employment change among the other demographic groups.
The unusually low rate of labour force participation in recent years is attributable to three principal factors: long-term trends, especially the aging of the population; temporary weakness in employment prospects and wages; and some longer-term factors attributable to the unusual aspects of the slow recovery of the labour market
As a result of changing consumer economics, frugality is the new norm; the path to growth will have to come from building loyalty. Holding on to existing customers is more important than ever, and that means being aware of demographic and economic trends and how they affect the wants and needs of your target market.
About the author
Mark Dempsey is Director, Foodservice Canada for The NPD Group. The NPD Group has more than 25 years of experience providing reliable and comprehensive consumer-based market information and insights to leaders in the foodservice industry. For more information, visit www.npd.com or contact Mark at Mark.Dempsey@npd.com.