According to Datamonitor's report, Empty Nesters, the over 50s in the UK currently enjoy the highest annual disposable income per capita, and spent a combined £38.4 billion on CPG in 2003. More importantly, this figure is likely to increase to almost £46 billion over the next five years as the British population continues to age.
According to Datamonitor, by 2008, there will be a total of 8.5 million of Early Empty Nesters (50-64-year-olds) in the UK, and their annual disposable income per capita will have increased by 8.5 per cent to £17,872. This equates to 147 per cent of the national average; in Europe, the average is forecast to be £14,328.
According to the report, this sudden increase in wealth often sparks some highly indulgent spending, not only on big purchases such as travel, new homes and new cars, but also on everyday purchases including high quality food, fine drinks and pampering personal care.
"The rapid growth in spending comes as a result of increasing incomes coupled with people planning for an enjoyable and stress-free retirement and a strong desire to reward themselves both for raising a family and for a lifetime's work," said Andrew Russell, Datamonitor consumer markets analyst and author of the report.
Late Empty Nesters - those over 65 - are currently more numerous than Early Empty Nesters: there are 9.5 million in the UK, according to Datamonitor. Their disposable income is, however, smaller as they are generally living on their pensions and any savings they may have. The average Late Empty Nester in the UK has a disposable income of £10,800 - still higher than the European average £10,019 - which places significant constraints on their ability to indulge in self-rewarding behaviour.
As a result, the report suggests, Late Empty Nesters tend to focus on more of a 'less of the best' approach, reserving high quality food, drinks and personal care products for special occasions such as anniversaries and family birthdays.
For both categories of Empty Nesters, however, health is a matter of particular concern, and this has led to numerous opportunities for manufacturers of health-related products such as functional food and drinks.
Products such as heart-health or cholesterol-lowering foods, omega-3 and omega-6 oils, soy- or calcium-rich foods are all increasingly high on the shopping list of Empty Nesters, but Russell told FoodandDrinkEurope.com that manufacturers had "missed the opportunities" for growth in this market.
"Most manufacturers are bad at targeting these Empty Nesters, they really don't have the right mindset. The younger part of this age bracket, what we call the Early Empty Nesters, those aged between 50 and 64, are really not very old at all by today's standards, but the marketers simply don't seem to know what these consumers are interested in. How can they possibly hope to effectively target their advertising?"
The problem, according to Russell, is the age gap between the marketers and the consumers. "Most CPG marketing executives are in their early 30s, and their views of the over 50s are often limited to stereotypes - Saga holidays and cat food! This usually means that any marketing of branded goods to these consumers is at best wide of the mark and at worst patronising - which in turn means that few companies are in fact targeting this segment of society at all."
Russell suggested that the best way to reach this audience was to run campaigns which focused on the specific benefits of products rather than trying to appeal to a particular segment of society.
"Our research found that most CPG manufacturers do not want to 'pigeonhole' themselves, to be seen as catering only for 'old people'. The best marketers are those who focus on what we call 'need states' - on people, young or old, who want to treat themselves, or improve their health, or are looking for something indulgent.
"Campaigns like this can cross media channels very well, and this is important - the same ads can run in magazines such as Cosmopolitan, which has a young audience demographic, and in Good Housekeeping, whose readers are more likely to include Empty Nesters. This type of marketing does not patronise or stereotype, and can be highly effective at reaching a much wider audience."
And there is little doubt that Empty Nesters could be a positive gold mine for CPG manufacturers if they are correctly targeted. "In the US, the philosophy of these Empty Nesters is 'let's spend the kids' inheritance' and we have documented cases of people installing entire bars in their homes. The British Empty Nesters tend not to go that far, but they are quite prepared to have a completely new kitchen installed out of a desire to create more gourmet food and do more entertaining at home," Russell said.
Nor is the UK the only place where Empty Nesters are becoming increasingly important. "We are seeing this phenomenon growing throughout Europe," Russell said "although the patterns are slightly different. In the south of Europe, for example, children tend to stay much longer at home - usually until they get married - and this can have an impact on Empty Nesters' ability to enjoy their retirement to the full.
"Late Empty Nesters, meanwhile, sometimes find their ability to enjoy retirement to the full held back by boomerang babies - children returning to the family home after their initial departure - and this can be a drain on parents' income and time long after they originally expected to be independent."
Southern European Empty Nesters also have lower disposable incomes to live off, the report suggests, with the Spanish having just £8,316 per annum and the Italians £9,416.