Demographic shifts

In a 1960s anti-war song the lyrics stated, “Where have all the flowers gone?” Today we sing “Where have all the Twinkies gone?”

Who would ever think the Hostess cupcake and Twinkie would suddenly be missing from the shelves of gas stations, vending machines and your local supermarket. These creamy delights and icons of our youth were basics of our childhood nutrition.

Who is responsible for this tragedy? The culprit is us, the American people. There has been a shift in population demographics and consumer behavior, which has impacted this company and even a recent national election. When looking at these changes from the prospective of marketing you see shifts in the customer base both demographic and psychographic.

Demographics examine the population’s age, marital status, and the number of people in a household and the family or individual income. Psychographics looks at their behavior. How often do they eat out, what they eat, how often they go to the movies, buy a car, shop at a mall or take a vacation.

By assembling the data from both of these perspectives a company can begin to profile their typical customer and predict their behavior

So why has Hostess, a national baker of cream filled delights, closed its doors and offered up for sale their famous recipes for those sweet treats we all enjoyed in our childhood? What happened?

Some sources say the cost of production became too high. Others say the core Twinkie customer became older and no longer saw these delights as something they wanted to include in their daily caloric intake. In reality, we as a society are more weight conscious, and want to eat healthier.

Some loyal customers actually began to hoard Twinkies when it was announced that production would be halted. This behavior reminds me of the rush to the supermarkets when Coke announced they were changing their recipe. Recently the bankruptcy court approved the purchase of the recipes for the creamy delights and other products by two investments firms.

To paraphrase General Douglas McArthur, “The Twinkies shall return.”

In January it was announced that the Third Ward Café was closing. This is another example of how a change in demographics and psychographics can negatively impact your business. The stated reason they were closing, after more than 25 years, was they were not attracting the younger clientele and that their core customer was getting older, and were not dinning out as often.

I have spoken to a number of restaurant owners in the area and the response has been the same. Their base of loyal customers is eroding. The younger clientele are not as loyal and frequent diners as their parents. In addition, there has been an explosion of new restaurants and bars in the Third Ward, Walker’s Point and on Milwaukee and Water Streets providing new choices for casual dining. Where we once dined on green lipped mussels and drank fine Italian wines, the new clientele will be dinking espresso, lattes and feasting on scones and biscotti. As a population, we have become more sensitive to calories, variety of offerings and price.

As a loyal customer of Third Ward Cafe and having retired, I no longer hosted dinner parties, or business luncheons at this restaurant. My behavior changed and so has the behavior of my peers.

These examples should beg the question, when was the last time you surveyed your customer to see what they like, do not like or desired from you as a supplier, manufacturer or strategic partner. We as business professionals react to the larger shifts in the economy, lending rates and raw material costs. But, do we see the changes that will affect us when they are not so obvious. These subtle changes, if identified early, can provide you with an edge over your competitors.

As an example, if you want to reach Generation X or their peers, you better be using social networking channels such as Twitter, Facebook or LinkedIn. Open Table and Yelp is where that generation looks for restaurants and reviews, not the local food critic’s column. On Open Table your visit to the restaurant is followed within a week with a short questionnaire asking you to evaluate the food, the service and the ambiance of the restaurant. You are even asked if you desire to send a private comment to the owner of the establishment. In one case, I received a return email thanking me for the feedback and advising me upon my next visit, I would be treated to a complimentary dessert. These types of interactions lead to a higher level of loyalty and repeat business.

While in Phoenix this winter, we happened upon a new restaurant chain that is expanding nationally. It is called Seasons 52. Their concept is to provide fine dining, an energetic atmosphere and a healthy meal to its diners. How do they do this? What makes them different? No entrée is more than 470 calories. Every item on their menu has a calorie count, including desserts, which range from 40 to 315 calories. No need to look up My Fitness Pal or consult your calorie counter, it is all there in front of you.

Needless to say, this restaurant is packed with business people, casual diners and young couples. It is now fashionable to be healthy. This trend has expanded to fast food restaurants and even local family bistros.

They are responding to the shifts in consumer behavior. Are you?

Cary Silverstein, MBA is the President and CEO of SMA, LLC & The Negotiating Edge. He heads a group of consultants that provide services in the areas of strategic planning, negotiations, and conflict resolution with offices in Fox Point. He can be reached at (414) 352-5140 or at

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