-By Doug Anderson

It all begins with aging. U.S. fertility rates have fallen by 44 percent since the peaks of the baby boom and are projected to continue to fall by another 12 percent over the next several decades. Falling fertility, combined with rising life expectancy and the large baby boom generation just nearing retirement age, equates to an aging population. By 2037, nearly one in three households in the U.S. will be headed by someone over the age of 65. Aging, however, is only the most obvious impact. There are five other key trends fostered by aging that will completely alter the marketplace for consumer products.

Growth Found in the Less-Developed World

Worldwide, there is still substantial, though slowing, population growth. By 2030, world population will have grown by around 20 percent. Only 3.2 percent of this growth will come from the more developed world. The less-developed regions will grow 31 times faster than the more developed ones. Some of the older countries in Europe, as well as Japan, will lose population. Marketers in the developed world will be locked into share wars, while those able to compete in the less-developed world could see substantial growth.

The Share of Households With Children Decline

The other side of the coin of an aging U.S. population is that the share of households that have children will continue to decline, as it has since the peaks of the baby boom in the late 1950s. Because fertility rates continue to fall, average family size will also fall, further impacting sales volume. By the middle 2020s, the share of U.S. households with children under 18 will fall below 30 percent. In western Europe and Japan, the share will be much lower, making large families with children a niche market.

Immigration and Ethnic Familes Fuel Growth

The majority of population growth in the United States will come from new immigrants and the children they have in this country. Since most immigrants are young, families with children will become more ethnic, more quickly, than the total population. By 2025, the majority of families with children in the United States will be multicultural (Hispanic, Black, Asian, etc.). Less than half of families with children will be native born non-Hispanic White. Multicultural marketing will be essential when selling to families with children.

Older Consumers Have New Needs

The baby boom will seek to rewrite what it means to be old, exactly as they have rewritten what it means to be children and adults. Marketers willing to reach out to baby boomers as they age can tap into a large marketplace. Those who aren’t willing to market to people over the age of 65 will miss out on the first generation to grow up in a full-blown consumer marketplace. Baby boomers won’t spend on the same categories as their parents did. For example, consumption of alcoholic beverages is much higher for baby boomers than for the current cohort of 65-plus people. Marketers who assume that the baby boom will start to behave like current older Americans, just because they’ve reached the age of 65, do so at their peril.

CPG Spending Declines

As population growth slows in the United States, so will spending on consumer products. Household size will decline across the board, the largest families will be smaller, and a large share of the population will live in one- or two-person households. Nielsen projections demonstrate that households closest to the poverty line will gain in share at the expense of all other households, but especially those in the middle and upper-middle classes, who will shrink the share the most. The impacts of these two trends mean that after 2020, Nielsen projections show per-household spending on packaged goods will begin to fall. The current recession is already impacting spending in the short term. Growth will be very hard to come by, both now and in the coming decades.

- Nielsen Business Media