How Longevity Is Influencing Consumer Spending

Our analyst explains what parts of the consumer staples sector could benefit from an aging global population.

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Welcome to Thoughts on the Market. I’m Sarah Simon, Head of the European consumer staples team at Morgan Stanley, and today I’ll be talking the increasingly important longevity theme and its impact on consumers. It’s Thursday, the first of February, at 3 PM in London.

It's no secret that global life expectancy is increasing. The rise of modern medicine, improved working conditions, urbanization, and greater access to food and water have all contributed to a greater life expectancy. According to the United Nations, global life expectancy has risen more than 54% since 1950, reaching about 71 years in 2021, with Asia improving the most.

At the same time people are living longer, birth rates for most developed economies have dropped. Higher levels of education, the increasing proportion of women in the workforce, and modern medicine have all contributed to lower birth rates. In fact, over the last several decades, the global population has aged significantly, with the median global age increasing 8 years since 1950, hitting 30 years in 2021. Looking ahead, the United Nations expects the percentage of population aged 65+ will continue to increase at a faster rate than younger populations.

An ageing population has far-reaching implications, but let’s consider the spending power of older adults. Real disposable income among older adults has increased throughout the years. In 2022, an older adult had about 50% more than in 2000. As a result, older adults today have more money to spend on consumer goods and services than in the last decades. Here are three categories within the Consumer Staples sector that could benefit from the rise in longevity.

First, Consumer Health. As consumers skew older and their disposable income increases it bodes well for a wide range of consumer health products – think Vitamins, Minerals and Supplements (VMS), denture care, cold and flu remedies and more.

Second, Active Nutrition, including protein supplements and probiotic-rich foods such as kimchi, kombucha, or yogurt, is a likely beneficiary of the longevity theme. This sub-category is currently growing mid- to high single digits on average (over 10% for protein-related categories), and we see room for further long-term growth.

Finally, Medical Nutrition. With age comes increasing prevalence of chronic diseases, including cancers, and with malnutrition. Addressing malnutrition improves the cost, and effectiveness, of medical treatment and also allows for shorter hospital stays. To that end, healthcare providers are increasing turning to medical nutritional solutions--driving demand for these products.

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