At least it's not according to Dr. Lowell Catlett, an economist and futurist who gave a talk this morning at Dairy-Deli-Bake. What I took from his speech is that we are all essentially spoiled. Recessions are a part of life, he said, and almost as soon as we get in one, we are working our way out of one, 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. He threw out a bunch of numbers and examples to support my simplistic take on it, but I was too busy listening to write that quickly. I did catch that gross domestic product grew 1.3 percent in 2008. Surprising, since the media has said that the recession hit sometime in late 2007. But this is where the spoiling comes in.
Most of us reading this blog (I'm guilty of generational stereotypes here) belong to the first and second generations that grew up above the maintenance level. Dr. Catlett explained the three levels of "life." (Again, this is my simplistic take on the matter. 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 was 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 us didn't grow up living at that level, Dr. Catlett said. So, that's why everything seems so bad. Our "normal" was a previous generation's "luxury." When you live in the dream space, you don't want to give anything up. People afford what they want, he said. And for food retailers, especially bakers, that cupcake is not a necessity, but the Baby Boomers and Generation Y need it to get through the day.
For us in the food industry, food isn't simply about calories anymore, as it was during the Great Depression for the World War II generation. It has become so much more for the 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.