Fruit Loops or Cocoa Pops? Nuts and granola seeds good for your gut or (if I’m feeling less virtuous) all my sugar for the day in a small breakfast bar. Mmmm, I think I won’t read the labels too closely before choosing.
I am in the cereal aisle at the supermarket but I am not looking for the porridge. I’m here because of what it tells me about the development of Australia.
Let’s start with the basics. The standard middle-class breakfast in Australia is a handful of Weet-Bixes. Centered in the grain aisle, the 1.2kg pack of Sanitarium Weet-Bix will set you back 42 cents per 100g. This will be our benchmark. The cost of this product (in relative terms) has not changed much since its introduction to the Australian market a hundred years ago.
The left and right sides of the grain aisle reflect the past five or six decades of economic development in Australia. This period saw the eviction of the workforce, the erosion of the middle class. We did not get poorer collectively, but the gap between rich and poor has widened.
The economy has shifted from agriculture and manufacturing, the quintessential sectors of the middle class, to highly skilled knowledge industries and low-skilled casual jobs (now often referred to as the “odd-job economy”) . Salaries in Australia are largely determined by your level of education. Educated workers get a living wage, unlike those with little education. Our workforce doesn’t look like a Bell Curve where almost everyone has middle-class jobs, and a few rich and poor complete the picture. On the contrary, our workforce looks like the letter U. An ever-growing number of highly skilled workers and more and more low-educated workers are flanking a declining middle class.
How has my supermarket’s grain aisle reacted to a consumer market where more and more customers need to carefully watch every dollar spent?
A whole new category of products has emerged. The private label end of the spectrum – the Aldi end of the spectrum, in other words – brings a clear premise to the market. These products give us the same utility as Weet-Bix (a wheat breakfast) at a much lower price (about 50% cheaper). In a U-shaped consumer market rather than a bell curve, the emergence of this lower price segment is inevitable. For low-income people, middle-class products are increasingly out of reach.
Let’s leave the cheap end of my grain aisle behind and visit the end of Paris. This is where all the Weet-Bix fancy strains come together. Weet-Bix protein makes us stronger; Weet-Bix Organic is good for the planet; Weet-Bix Kids is probably also good at something …
The premise of this emerging product category is also pretty clear: I’m offered slightly higher utility (a slightly healthier or tastier version of Weet-Bix) at a much higher price (three times the benchmark). at $ 1.20 per 100 g.). The high end of the market, the highly skilled and well paid knowledge workers have money to spare and are willing to pay for luxuries and conveniences big and small. Hell, they might even afford the multi-grain Weet-Bix.
At the end of the Parisian cereal aisle, everyone must take a break for a moment of career coaching. Our employer, like all other Australian businesses, is faced with the reality of a deep customer base. The same is true for all departments, as they serve an increasingly divided clientele. Businesses large and small, as well as governments, from municipal to national level, need to strategize to determine where on the Weet-Bix scale they want to position their services.
Does your company still imagine a market where everyone falls into the Weet-Bix center or has the offer been adapted to new market realities?
The end of the house brand wheat cookie and the gluten free and chia seed free end of the spectrum are shifting more and more, making it increasingly unnecessary to aim for the center of the market. Yet many companies still think of Australia they remember from the 1970s and offer a Weet-Bix type product for the shrinkage center.
Standing here in the grain aisle, I can’t help but think about the broader social implications of the growing Weet-Bix product line. An empty workforce is undesirable because it makes maintaining social cohesion extremely difficult. Just look at the United States, South Africa or Brazil. Therefore, one of the biggest social challenges for Australia is to strengthen the middle class.
Instead of just grabbing a few boxes of cereal, I’m starting to think about how desperately we need unprecedented investment in infrastructure. This would create essential medium-skilled jobs. Putting our collective focus on infrastructure, construction and local manufacturing helps us to counter the hollowing out of the work.
The shopping trip got rather stressful at this point.
Before leaving the supermarket, I have to choose wisely what to put in my basket. Buying Weet-Bix on a regular basis is like the equivalent of a campaign politician in RM Williams boots drinking a beer to show he’s a common man. My fellow buyers can easily guess my social status based on my Weet-Bix choice.
That said, pretending to be in the 1% has never been cheaper. I think I’ll just pack some protein-fortified Weet-Bix, a random non-dairy milk with a funky label, and some fresh berries. That should be enough to convince everyone of my superior social standing, right?
Demographer Simon Kuestenmacher is co-founder of The Demographics Group. His columns, media commentary and public speaking focus on current socio-demographic trends and their impact on Australia. Follow Simon on Twitter or LinkedIn for daily data information.