The economy is not that bad, according to Dr. Lowell Catlett, an economist and futurist who spoke at the recent Dairy-Deli-Bake expo. The nation's gross domestic product actually grew 1.3 percent in 2008. Recessions are a part of life, he added, and almost as soon as one starts, it begins to end; it's just a matter of how quickly. Some recessions are Vs, which as soon as the economy hits bottom, it starts right back up again. Others are Ls, where the economy sits at the bottom level for a bit longer before going back up.
It is all a matter of perspective. Generational differences are playing a large part in how the media and consumers are reacting to the current recession. Dr. Catlett divided “life” into three levels. The first or maintenance level is being able to feed, clothe and house your family, but not much more. Most of the world lived at this level until after World War II. The World War II generation grew up during the Great Depression, where the basic necessities of life were all many of them could achieve, but they dreamed of luxuries.
The Baby Boomers were the first generation to grow up in the second level, what Dr. Catlett called the love and acceptance level, part of the dream space. This generation was the first that grew up with the luxuries their parents dreamed of; therefore, the previous generation's luxuries became the next generation's necessities. And, Generation Y is growing up in the third level, even higher in the dream space than the Baby Boomers grew up in, and two steps away from the necessities of the World War II generation.
All economics are based on the maintenance level, but the majority of consumers didn't grow up living at that level, Dr. Catlett said. Luxury has become normal, which is why the current recession seems so bad to many consumers. When you have lived in the dream space for so long, you don't want to give anything up. People afford what they want, he added. A cupcake is not a necessity, but the Baby Boomers and Generation Y “need” it to get through the day.
Food isn't simply about calories anymore, as it was during the Great Depression for the World War II generation. It has become much more to Baby Boomers and Generation Y. And in this new world, Dr. Catlett said, don't sell people products and services, sell people their dreams. They will find a way to afford what they want.