Food producers are being urged to take advantage of the growing number of single person households by creating more products designed for individual consumers.
A new report from market analysts Datamonitor reveals that over a third of European consumers live alone, and with a spending power of €140 billion per year, they represent a significant opportunity for companies able to cater more specifically for their needs.
The typical image of a single person household is of a lonely pensioner or a poor student, but Datamonitor's research shows that many single person households are in fact affluent professionals with a growing desire to spend their hard-earned money on themselves.
These 'singles' spend €140-150 billion each year on food, drinks and personal care products, with single person households spending 50 per cent more per person on CPG (consumer packaged goods) than two adult households with an average of €3,022 each per year, according to the report.
Some 35 per cent of people across Europe live on their own, but they also account for 10 per cent of the off-trade alcohol market, 40 per cent of the food market and 41 per cent of the personal care market. And this figure is likely to grow further, according to Datamonitor. Between now and 2007, singles' spending will have increased by 4 per cent per year across Europe to just under €190 billion, the market analysts predict.
Sweden, the Netherlands and the UK will be the fastest growing markets. Single Swedes already spend €4,483 per person each year, while their Dutch counterparts spend roughly half that at €2,403. British singles spend around €3,542 each per year. Spain has the lowest level of expenditure, according to the report, with single person households there spending around €2,067 on food, drink and personal care products each year.
While there are single person households in every age group, Datamonitor predicts that it will be the late mid-lifers, aged between 35 and 49, which will drive growth in this market. This age group already shows the highest CPG spending of all people who live alone, due to their greater income, the typical absence of dependents and greater desire to spend money on their own comfort. As they make up 20 per cent of the total singles population, they are also one of the most profitable markets for companies to target.
The majority of late mid-lifers are long-term singles who avoided marriage in their early mid-life while the rest are what Datamonitor classifies as new singles - separated, divorced or widowed, and possibly with dependent children. The long-term singles are the most lucrative sector of the single person household market, the reports shows. Their earning power has increased and they will usually have no dependents. They are independently minded, place a high priority on enjoying their life and have a higher than average disposable income, making them a good target for premium goods in all CPG arenas.
For example, they are far more likely to opt for premium food or drink products than other age groups, are the least concerned about drinking alone at home and have the most desire to spend money on high quality alcoholic drinks. The home alone occasion is an important one for long-term singles as it enables them to luxuriate in their single status, Datamonitor said.
The new singles differ quite markedly from long-term singles in terms of their behaviour, the report continues. They usually have to form new social networks, may have dependents and are not accustomed to living alone.
Although single young adults between 18 and 24 are comparatively rare, as most of them tend to live with their parents or share with others, they still offer opportunities for food and drink companies, according to the report. This category is highly sociable and single young adults tend to spend large amounts of time outside their homes. As a result they shop much more frequently, as their eating habits are too irregular to make bulk purchases of perishable goods a good idea. These top-up shopping trips are generally impulsive as well - quality of food is not a high priority, whereas convenience and speed are.
Single young adults tend to eat a lot of ready meals, rather than spend time cooking and their active social lives mean that they are a key market for on-trade alcohol - in the UK, for example, they are responsible for one-third of the on-trade alcohol consumption.
Seniors make up the largest group of people who live alone, due to bereavement as much as choice, and thus the most valuable market. For most, particularly those who have retired, money is a key concern. Seniors often become interested in experimenting with cookery after their retirement - however, their need for convenience also increases. For some retirees, this is because they live a more active life in retirement, for others it is because they do not want to waste any more of their time chopping vegetables. As a result, the demand for convenience foods increases with age.
Datamonitor analyst Andrew Russell commented: "Targeting people who live alone means understanding how their key need states affect their demand for food, drinks and personal care. Food manufacturers need to develop products and marketing which appeal to single person householders looking for quick, convenient and tasty meal solutions which they can enjoy in front of the television or while phoning friends. Personal care manufacturers need to help people living alone to feel good about themselves by creating an attractive, confident image. Drinks manufacturers need to target the desire to 'premiumise' in order to enjoy a greater quality of life - something most people living alone feel they deserve."
For details of how to order your copy of Datamonitor's report, Targeting the Needs of People who Live Alone, click here.