Leapfrogging 50 years of poor choices and conventional wisdom

Leapfrogging 50 years of poor choices and conventional wisdom

  Q&A with Mark Penn, CEO twice over, advisor to many, author of Microtrends.


Mark Penn is the author of Microtrends, a seminal book for business leaders and strategists in analyzing the small communities of consumers—a mere 1% of the U.S. population will suffice—that increasingly drive major changes in the ways we approach life. Penn is the worldwide CEO of Burson-Marsteller, a public relations firm, and CEO of Penn Schoen Berland, an influential polling firm.

Penn was also advisor to President Bill Clinton and chief strategist for Hillary Clinton’s presidential campaign, and his global list of clients includes such heavyweights as Tony Blair, Bill Gates, Ford, Merck, Verizon and McDonald’s. Penn’s insights have helped to elect more than 25 leaders in the United States, Asia, Latin America and Europe. Penn spoke with NBJ from his offices in Washington, DC.

NBJ: In Microtrends, you cover two areas of particular interest to our audience: health & wellness and food, diet & lifestyle. Any new news on those fronts?

Mark Penn:
We recently updated the book for a paperback edition, and the updates deal mostly with trends that surfaced as a result of the financial crisis. A lot of people speculated that microtrends would be fads, but to me, very few look outdated. In health & wellness, two points come to mind: do-it-yourself doctors (DIYDs) and surgery lovers. Both underscore that once people get involved in the healthcare system, the amount of time they spend online getting information is really quite large. Fewer people go to the doctor without having first learned from the Internet what a likely diagnosis could be, what potential courses of treatment could be, what the likely pharmaceutical prescriptions could be—and I think the desire for this kind of information is only going to grow.

NBJ: Does passage of the Affordable Care Act change the game?

I think that speaks directly to the idea that people are looking for alternative choices. At the bedrock of Microtrends is this idea: Whether it’s religion, coffee or healthcare, we’re seeing these intense, small movements that can create incredibly strong businesses. Are people on the lookout for more alternatives? I think they are. We observe in the book that a new religion is being founded every day. Look at the growth in vegan lifestyles, particularly for children. There are almost two million children who are not eating meat, and that is going to have a profound impact on the rest of their lives. They might grow up to become big meat eaters, but more likely, a growing percentage of the population will never eat meat. Youth veganism will have a significant, long-term effect.

NBJ: What about the archetypes of the supplement industry—fish oil and probiotics. Any trends there?

I do think that the probiotic notion is going to become strongly appealing to consumers. The basic underlying trends are these: people seeking lower-calorie diets, less meat, more exercise, more self-care, fewer doctor visits, and less reliance on conventional medicine. In that context, more people will take probiotics because they think probiotics are good for them. It’s that simple. I’m not going to say that this rises to its own microtrend, because microtrends tend to be larger than specific products.

NBJ: Supplements are such a big world now. Will microtrends surface down the line within that world?

To really analyze the supplement marketplace for trends, you need to ask: “What is it that people are trying to achieve?” Well, people are trying to be smarter, live longer lives, find some kind of specific health benefit. I’d also note that for every trend, there’s a countertrend. So for every percent of patients going to see a doctor, there’s a room full of people trying to self-medicate and take supplements that they think will be more helpful for them in the long run. It will be an interesting space. We did a microtrend on surgery lovers, but I suppose there are also supplement lovers out there. It’s a very significant marketplace that didn’t exist before.

NBJ: Let’s talk about food. Is there anything in the organic world that strikes you as noteworthy?

The trends here are larger scale toward natural, organic and local, and there is a pretty signifi cant segment of the population now willing to pay higher prices for these products, particularly in urban areas where they’re most difficult to obtain. I don’t think we’re seeing any significant debasement of that trend. In terms of the financial crisis—whether the economy would cause people to scale back on these purchases—I don’t see that happening at all. I think the trends tend to overpower belt-tightening by virtue of the cause. We’re not seeing any kind of retrenchment in the growth of these phenomena.

NBJ: We look at Whole Foods’ recent performance and see the same thing. Many analysts suggest to us that you can call natural & organic a trend, but it’s really moved beyond that. People consider healthy food to be an invaluable part of their lifestyle now.

I agree. I think you saw a lot of backtracking in the fashion space. The Saks Fifth Avenues of the world struggled while Walmart benefited. We saw this same phenomenon of greater selectiveness, which could have had Whole Foods on the ropes during the financial crisis. People have decided that natural & organic food is an indispensible part of life. You see the trend toward selectiveness even in fast food now, as companies have had to significantly upgrade the ingredients they use and how they describe those ingredients in terms of flavor and taste. The competition for food has never been more intense.

NBJ: What about the American consumer extending the organic food proposition to other aisles of the grocery store, like personal care and cleaners?

We look at the American consumer as maybe not on the vanguard of organic adoption, but they have certainly come a long way. We also look at consumers in developing markets who have the opportunity to just skip over 50 years of bad stuff and bad decisions. They can skip right over 50 years of conventional choices and lifestyles. Those consumers traditionally did not have the money to make healthy and sustainable choices. As they enter the middle class, we’ll see that these elements of natural, organic, fresh and sustainable are going to become endemic. This is most germane to the BRIC countries, because that’s where economic development is happening. So a lot of the trends that took a long time to develop here in the United States will develop much more quickly in these countries.

The education of these new middle classes tends to be pro-environmental and tends to favor these healthier elements. That’s not an education that was commonplace 50 years ago. Fifty years ago in the United States, we needed advertising to tell us to stop throwing garbage out of moving cars. As these BRIC countries go through their transformation, I think they’re going to leap into these trends much faster, which means that the companies involved have a burgeoning international market that could really become astronomical.

Mark Penn Q&A Part II



NBJ: How about China?

MP: They invented supplements and herbal medicine! One of the biggest growth industries in these countries is going to be generic drugs, so will supplements show the same kind of growth next to that? I think they will. These trends are clear in the United States—the desire for information, concerns over personal health, the desire for greater education—and therefore you will see them in China and the BRIC countries as well.

NBJ: How do you view the world of functional foods?

MP: Functional food is such a broad category. What I tried to do with Microtrends was to identify very specific marketplaces and interests, which revealed certain trends and countertrends. For example, water was showing enormous growth a few years ago, and at the same time, caffeine-laden energy drinks showed growth. Simultaneously, there was this other trend toward people getting less sleep. When people get less sleep, it’s no surprise that they turn to caffeine.

I do think functional foods and beverages have a credibility problem. So many claims have been disputed or questioned. Getting across the validity of those claims—especially in a market where people are more skeptical and looking for more transparency and validation—is likely to be a harder and harder task.

NBJ: Speaking of trends and countertrends, we’ve noticed more sales and interest in relaxation supplements. Stress is a hot category.

MP: A lot of this is also driven by how work has changed. Physically demanding work called for hardier meals and more fuel for our muscles. Mentally demanding work is going to create greater anxiety and a greater desire to chill out and relax.

We’re not creating more manufacturing jobs. The majority of people in this country classify themselves as professionals now. Consequently, that has an enormous impact on their non-work lifestyle and even on their workday—less physical activity, more stress, more tension, as well as greater ease in analyzing and understanding information. All this comes from a rather basic change in whether or not we work in a physical or mental way.

NBJ: Is this new approach to work sustainable?

MP: I think it’s definitely sustainable, and all the evidence shows that it’s just going to accelerate. Look again at the BRIC countries. What are they doing? They’re producing larger numbers of educated citizens and larger numbers of workers in professions like software and engineering. Those high-stress professions generate lots of new trends in terms of people’s consumption habits. That’s my point about Microtrends. The trend isn’t that people are taking relaxation drinks. The trend is what lies behind that, what’s changing in their lifestyles and habits to truly create an opportunity.

I talked to a man who read the sun-haters chapter in the book and completely revamped his clothing line around it. We now realize the sun can hurt us, and this knowledge can generate 180-degree changes in behavior. That’s what we look for, these underlying changes that affect the development of new trends. The financial crisis is a big one. The drive from manual to mental labor has changed habits immensely. The increase in education is another driver. And, if you’re sleeping two hours less every night, there are two more hours in your day to fill up with something new. That creates plenty of business opportunity.

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