Will Heineken reach drinkers other beers can’t reach?

In August this year, Heineken announced that it intended using crowdsourcing to generate products and marketing ideas targeted at older drinkers.2013-10-09_12-34-00

The company’s rationale was that the beer industry has historically been focused on the youth sector and so there should be opportunities for products aimed at the older drinkers. This is an especially important group since it is a large, growing and relatively wealthy.

This activity is part of Heineken’s corporate strategy to harness innovation to drive revenue growth in the face of falling beer sales.

The Ideas Brewery ‘60+ Challenge’ innovation platform was the mechanism used to generate these insights into the preferences and motivations of older people. The winning entries came from Finland, Australia and the USA. All of these are fast ageing countries.

Heineken hoped the exercise would refine its marketing strategies ensuring older drinkers order Amstel. Birra Moretti and whatever new ‘oldie products’ are launched rather than Carlsberg and Peroni.

But as we will point out, not all efforts to befriend oldies are ‘age-friendly’.

It really is a no-brainer that companies should be modifying their marketing strategies to reflect the growing importance of older people. Surprisingly, much of the FMCG industry is still stuck at the starting gate pondering what to do as the composition of their customers continues skewing older.

So what has resulted from Heineken’s look and listen exercise to its older customers?

The company has identified three ideas that it wants to investigate further.

Understandably, there are few details about these ideas. Apparently the new beer, called Fahrenheit +60° is part of new product range that would contain products fermented at different temperatures (e.g. 60,65, 70 and 75). These numbers signifying the target age group. Another age related factor is the level of iron in the product that is thought to be beneficial for older bodies.

The new bottle, called the Easy Star bottle is intended to be smaller and lighter and more distinctive on the shelf.

No doubt this is very early days in Heineken’s thinking about what it needs to do to capture more of older consumer’s spend. We have our doubts if any of these ideas are likely to be winners.

A recent Bloomberg article investigated what products had resulted from the six-year collaboration between University of Cincinnati and its corporate partners. These include P&G, Boeing Co and Mondelez International. This joint corporate and academic initiative was established to identify new products concepts for the older consumer.

The journalists were surprised (we were not) that here had been no product ideas targeted at the 60+ that had transferred from the ideas lab to the supermarket shelf. Of the 37 projects none had been commercialised.

What the journos from Bloomberg had discovered was the ageing consumer paradox:

The company that does such a great job of making products for seniors takes great pains not to make products for seniors.

So what does this mean for companies like Heineken?

Should they be focusing their attention on the older demographic – a resounding yes.

Should they be trying to invent special products for oldies – a resounding no.

Should they be evaluating their mainstream marketing – everything from product formulation, advertising through to channel design – a resounding yes.

We know it might be hard for some marketers to understand but reaching the age of 60 or 70, even 80, does not mean you want to stop consuming mainstream products. However, if everything about the product shouts that it not intended for you then don’t be surprised if the older shopper will look elsewhere.

Our definition of ‘age-friendly’ is; “a consumer experience where the unique needs of older customers are satisfied in a way that is natural and beneficial to old and young alike”. Creating unique products for oldies risks the chance of stigmatizing customers on the basis of age alone – a very risky business given the sensitivity we all have about our age.

If the team at Heineken need assistance solving the paradox we would be delighted to help.

 

Article co-written by Kim Walker and Dick Stroud, co-authors of ‘Marketing to the Ageing Consumer’.

Kim Walker is Founder and CEO of Singapore-based Silver Group – a consultancy that helps businesses to profit from the power of the 50+ market.

Dick Stroud is Founder of 20plus30, a consultancy specialising in marketing to older consumers. He is the UK’s leading expert in understanding the implications of physical ageing on the way older people behave and the products they buy.