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Potomac Watch: Census numbers provide plenty of thought for food
Saturday, February 24, 2001
By JENNIFER A. DLOUHY
WASHINGTON -- When students at Huntington College in Indiana choose between a burger and roast beef on baguette, they can thank the U.S. Census Bureau for menus that range from the traditional to the trendy.
Far from what the Founding Fathers envisioned when they called for a decennial population count more than 200 years ago, census data now are used for an astonishing array of products and services, including the food that college cafeterias dish out and the cars that dealers sell.
Census 2000 figures -- which will be released in detail beginning next month -- are crucial to government officials who use the population count to redraw congressional districts, as a baseline for calculating the extent of illnesses and to dole out $185 billion in federal grants.
But the census is also a gold mine for businesses and marketers, who are hungry for information that can help them cater to consumers.
"I've done this for 36 years, and I'm amazed -- I'm still surprised at the uses of census data," said Marshall Turner, chief of the Census 2000 redistricting data office.
Consider Sodexho Marriott Services Inc., which uses census figures and marketing data to plan menus for its food-service operations in more than 3,000 office buildings, hospitals, universities and schools.
"The more you understand the customers, the better off you are," said Meridith Heckman, senior director of market research for the company.
For Sodexho, understanding the customers of its college cafeterias means poring over census data and survey information compiled by the San Diego-based marketing firm Claritas Inc.
For example, when Gaithersburg, Md.-based Sodexho started planning a food program for Huntington College, a small Christian liberal arts school in northeast Indiana, "we went in with the preconceived notion that the kids were going to be looking for traditional cuisine," Heckman said.
But when Heckman plugged the students' hometown ZIP codes into a computer database from Claritas that pigeonholes residents of specific areas according to their buying habits, Heckman said she found a "fairly significant group of trendsetters on campus who were looking for ethnic and more adventurous cuisine."
Now, instead of dining on open-face turkey sandwiches and pepperoni pizza, Huntington students pick items designed for a more experimental palate, including roast beef with caramelized onions on baguettes, spinach and tomato pizza and shrimp jambalaya.
Neither the census long-form questionnaire -- which went to one in six households -- nor the short-form survey asked about food preferences. But Claritas is able to do market research on eating and spending habits, using the census as a guide.
"The census is godspell," said Mike Mancini, vice president of software product management for Claritas. Mancini said census data provides the backbone for Claritas' market research and its system of classifying groups of households into one of 62 "lifestyle clusters," or socioeconomic groups. The clusters have such catchy -- if irreverent -- nicknames as "young literati," "kids and cul-de-sacs" and "shotguns and pickups."
Mancini once worked with a developer who designed his bowling alleys based around the classifications of likely customers in the region. He has also helped grocery store managers, who decide whether to carry certain products, based on the clusters.
For example, one grocery store might decide to devote more space to imported lager over domestic beer, based on the census and marketing data, Mancini said.
Retailers also use the figures to hone in on potential customers before mailing expensive promotional materials. For example, Mancini said, a high-end car manufacturer will use the data to "decide whether to put a card in the mailbox or (mail) a marketing package with a videotape."
Companies also consult the figures before placing advertisements in newspapers and magazines. Instead of running an ad for a regional business in all editions of a newspaper, a store might target editions distributed to homes within a 10-mile radius.
AnneMarie Wills, the head of marketing resources for the Kansas City Star, helps companies place their advertisements in the newspaper that serves parts of Kansas and Missouri.
"We had an advertiser who was a meat retailer that sold upper-level steaks -- like filet mignon -- a very niche market," she recalled. "They wanted to know where the best potential for meat purchasers was."
Wills used Claritas data to map meat purchases across Kansas City "and showed them where the hot spots were for beef expenditures."
Wills also helped window installers and home-improvement companies that wanted to advertise in areas where houses had been built in a certain time span because they would likely need repairs soon.
Such consumer information allows companies to be more efficient in their marketing campaigns, and helps ensure consumers aren't bombarded with irrelevant advertising, said Tom Spencer, a senior manager with Claritas.
Companies "need to do this to survive," he said. "Knowing the customer is a key driver of success."
Although the census is a boon to marketers, the decennial survey is not without its critics. They say the federally mandated study is overly intrusive and hands over hordes of valuable personal information to marketers, for nominal labor and material fees.
The Census Bureau counters that the census is essential for government operations. Further, Turner added, every question on the questionnaires is "scrutinized very closely." Only those questions that are congressionally mandated -- such as how long people spend commuting -- are included on the form. Last year's census forms did not even ask about Internet usage and computer ownership because Congress did not require such information, even though businesses were especially hungry for it.
Census Bureau statisticians also work hard to ensure they keep information confidential. As a result, the census data provide a comprehensive picture of regions without treading on privacy, Turner said.
Mancini added that the census is not only a "tool that the government needs," but is also "a lubricant for the American economy that allows our companies to gain more efficiency in their marketing.
"It's like the interstate highway system," he said. "It allows the free flow of goods."
Nevertheless, "marketing is only the tip of the iceberg," Turner said, adding that "the biggest users of this are the 39,000 local governments" who analyze census data before making a host of local decisions -- everything from where to build new schools to the organization of emergency services.
The federal government itself distributes an estimated $185 billion in federal grants based almost entirely on population figures. The biggest of these formula grant programs is Medicaid, the medical program for the needy.
Federal grants for education, highway planning and construction, and adoption and foster care services also are doled out based on population.
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