Financial Reports & Markets
Plan for the inevitable
By Cindy Macdonald
By Cindy Macdonald
Mar. 1, 2017 – Predicting product trends can be tricky, especially now when social media can so quickly influence buying decisions. But demographics tell us that the “greying population” is inevitable, and companies must plan for this sweeping change.
In a presentation to meeting of the Paper and Paperboard Packaging Environmental Council (PPEC), public opinion specialist John Wright, had these comments about Canada’s population:
• In 2016, there were more seniors than children aged 14 and under.
• By 2026, seniors will represent 21 per cent of the population, approximately the current population of Quebec.
• In 2036, just 20 years away, we will reach the highest demand level for care, with baby boomers approaching an average age of 75.
• In Toronto, by 2036, 50 per cent of the population will be over 65.
The result is that “if a product is marketed to a 50+ audience now and maintains its market share, it should increase in sales by 35 to 50 per cent in the next 20 years,” he said. There is also a significant increase coming in the number of very old people in Canada. Wright said there are currently 7,900 Canadians aged over 100. By 2061, this will climb to 78,300. So the question is: is your company developing products or doing research into this greying population?
Clearly some paper companies have considered demographic trends in their business plan. Domtar, for example, has been carving a spot in the personal care and adult incontinence segments.
But not all companies are reacting to the obvious and inevitable population shift. Wright noted that there’s not a mass market automobile designed for chauffeuring older people, even though 21 per cent of Canadians are already looking after an aging parent or grandparent.
Some analysts have argued that the extinction of newsprint is inevitable as well. Matt Elhardt of Fisher International, speaking at Specialty Papers US last fall, said demand for newsprint is still declining. “We could hit a zero number for traditional uses,” he stated. By the early 2020s, we could see the last U.S. newsprint mill, he suggested.
While not inevitable, sustainability as a consumer concept certainly seems here to stay. John Coyne, vice-president, legal and external affairs for Unilever Canada, told the audience at the aforementioned PPEC meeting that the “sustainable” brands in the Unilever business were growing faster than other Unilever brands. Ethical consumerism, he said, is gathering momentum.
For strategic planning purposes, pulp and paper companies need to accept the inevitable: the opportunities presented by an aging population, the continued decline of certain paper grades, and the need to appear sustainable.
This column was originally published in the Winter 2017 issue of Pulp & Paper Canada.