Goldman Sachs believes population aging and population decline will reshape product and company demand patterns

Overview

This report is part of Goldman Sachs' sustainability research series, and its core discussion is how population aging, low fertility, and shrinking younger populations are changing demand prospects across products, industries, and companies. The report notes that the global population under age 19 has already peaked and begun to decline, and that the core consumer population aged 35-55 in developed markets may also have already peaked. At the same time, the global population aged 65+ is expected to rise from about 800 million to 1.6 billion by 2050. These demographic shifts will affect companies' product mix, geographic footprint, revenue growth, and strategic adjustments through age-segment consumption tendencies and regional demographic differences.

Core views

The report's core view is that demographic change is not just a macro backdrop; it will become a structural, investable influence on company revenue beginning toward the end of this decade. Healthcare, pharma and biotech, utilities, MedTech, staple retail, multiline retail, senior living, and home improvement benefit from aging-related consumption patterns; autos, education, electronics, apparel and footwear, dining out, airports, and public transit face demand pressure from shrinking younger and core consumer populations. The report also argues that demographic headwinds do not necessarily imply company decline; product reinvention, servitization, regional expansion, and M&A consolidation may be key strategies for companies to offset demographic pressure.

Analysis framework

Goldman Sachs breaks down consumer spending and participation data in the United States, Europe, and Japan by age cohort to estimate age-based spending multiples for different product categories relative to the median consumer. It then combines these spending multiples with United Nations population forecasts by country under different scenarios and maps them to company-level product revenue and regional revenue exposure to calculate each company's Demographic-Driven Demand (DDD) impact in 2030, 2040, and 2050 versus 2023.

Methodology notes

• Demographic demand modelDemographic-Driven Demand (DDD)

  Estimate the impact of demographic shifts on company demand by using age-based consumption tendencies, country population forecasts, company product revenue, and regional revenue exposure.

  The model first builds consumption multipliers for age bands such as 0-24, 25-34, 35-44, 55-65, and 65+, then maps the population changes under UN baseline, low-fertility, and zero-migration scenarios to the product and geographic revenue exposure of roughly 3,000 companies.

• Scenario analysisUN base case / low fertility / zero migration

  Assess demand outcomes' sensitivity to fertility and migration assumptions under different population forecast scenarios.

  The report stresses that persistently lower-than-expected fertility and migration assumptions materially affect the timing of population peaks in developed economies, so it also examines low-fertility and zero-migration scenarios in addition to the UN baseline.

• Relative quintile screeningGICS 1 & Region relative DDD quintile

  Compare companies' demographic demand outlooks within industry and regional groupings.

  The report screens companies that rank in the top 20% of DDD and also carry Goldman Sachs Buy ratings to avoid comparability distortions driven solely by industry or regional exposure.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Healthcare / Pharma & Biotech / MedTech

  Aging-demand tailwind

  Strengths

  People aged 65+ have a higher propensity to spend on healthcare, and population aging supports demand for healthcare services, pharmaceuticals, and medical technology.

  Weaknesses

  The report also notes that healthcare and MedTech are not fully insulated, and the growth rate of the elderly population may slow relative to past decades.

  Comparison

  Compared with industries such as autos, education, and electronics that depend on younger or core consumers, healthcare has a more direct demographic tailwind.

  Risks

  Health insurance reimbursement, regulation, pricing pressure, and a slowdown in elderly population growth could weaken demand conversion.

• Utilities

  Aging-demand tailwind

  Strengths

  Older people spend more time at home; people aged 55+ consume about 55% more electricity per capita than those under 45, and the 65+ utilities spending multiple is 1.34x.

  Weaknesses

  Demand growth may be constrained by energy prices, regulatory returns, and declining total population in some regions.

  Comparison

  Compared with cyclical consumer goods, utilities have a more defensive demand profile.

  Risks

  Electricity price regulation, capital spending, energy transition costs, and weather volatility.

• Home Improvement & Senior Living

  Aging-demand tailwind

  Strengths

  The 65+ home improvement spending multiple reaches 1.92x, and spending tied to senior housing and aging-in-place rises with population aging.

  Weaknesses

  Some demand is affected by the housing cycle, interest rates, and household wealth effects.

  Comparison

  Compared with education and apparel and footwear, home improvement is more supported by the spending structure of older consumers.

  Risks

  Weak housing turnover, rising labor costs, elevated interest rates, and policy changes.

• Autos

  Demographic headwinds and regional divergence

  Strengths

  Markets such as India and the United States may still have relative demographic tailwinds, and autonomous driving and new mobility models could create structural opportunities.

  Weaknesses

  The core new-driver age cohort is shrinking, and older consumers have a lower car-purchase spending multiple; markets such as Germany and China face more pronounced headwinds.

  Comparison

  Compared with healthcare and utilities, autos are more sensitive to younger and core consumer population trends.

  Risks

  Population decline, fewer first-time car purchases, regional mismatch, electrification competition, and pricing pressure.

• Apparel & Footwear / Education / Food Outside the Home / Electronics

  Demographic demand headwinds

  Strengths

  Some companies can offset pressure through brand upgrading, international expansion, product reinvention, or channel efficiency.

  Weaknesses

  People aged 65+ have a significantly lower propensity to spend on education, dining out, apparel and footwear, and general electronics than the median consumer.

  Comparison

  These industries depend more on younger populations and core consumer cohorts than aging beneficiaries do.

  Risks

  Shrinking younger populations, declining purchase frequency, price competition, and local market population erosion.

Key data

• Incremental 65+ population in developed economiesAbout 4 million per yearUN data cited by the report indicate that the retiree population in developed economies continues to grow.
• Change in core 35-55 consumer population in developed economiesAbout -3 million per year starting in 2030The decline in core consumer population is viewed as a headwind for multiple categories of consumer demand.
• Global population aged 65+About 1.6 billion by 2050, roughly double the current ~800 millionAging is the main demographic basis for the report's demand re-rating.
• Annual demand growth gap between tailwind and headwind industriesAbout 0.6 percentage pointsGoldman Sachs' bottom-up analysis shows that tailwind industries enjoy a demand-growth advantage versus headwind industries.
• DDD impact for top five tailwind/headwind industries by 2030+4.2% / -0.3%Relative to the 2023 baseline, based on the UN baseline demographic demand scenario.
• DDD impact for top five tailwind/headwind industries by 2040+8.7% / -1.3%Another page in the report shows a -1.7% headwind measure, but the summary section gives -1.3%.
• 65+ home improvement spending multiple1.92xRelative to the median consumer, one of the most pronounced aging consumption tailwinds.
• 65+ healthcare spending multiple1.54xHealthcare-related demand is supported by aging, though the report also notes that the growth rate of the elderly population may slow.
• 65+ education spending multiple0.24xPeople aged 65+ have a significantly lower propensity to spend on education than the median consumer.
• Buy-rated companies in the top 20% DDD quintile121 companiesThe report cites Maruti Suzuki India, Tata Consumer Products, Argenx SE, BT Group, AB Inbev, and others.

Impact & implications

For investors, demographic shifts provide a long-term demand screen across industries and regions. Beneficiaries include companies with higher aging-related consumption tendencies, more resilient regional demographics, or international expansion capabilities; pressured names include industries that rely heavily on younger consumers, first-time car buyers, physical mobility, and education spending. For company strategy, the report emphasizes the importance of product reinvention, servitization, geographic expansion, and business consolidation, especially for firms facing deteriorating local demographics.

Risks

• UN population forecasts are highly sensitive to fertility and migration assumptions, and low-fertility or zero-migration scenarios could materially alter regional demand views.
• The DDD framework does not yet capture all the effects of company product differentiation, pricing power, strategic adjustment, and technology substitution.
• Companies can offset demographic headwinds through international expansion, M&A, product reinvention, or servitization, so demographic exposure does not equal final operating performance.
• Aging beneficiaries such as healthcare may also be affected by slower elderly population growth, reimbursement pressure, and regulatory constraints.
• The buy-rated companies screened by the report do not represent all demographic beneficiaries, and historical TSR and earnings surprises do not guarantee future performance.

What to watch

• Whether fertility rates in major economies continue to undershoot forecasts, especially in the United States, Europe, China, Japan, Korea, and emerging markets.
• Changes in immigration policy in developed economies, because a zero-migration scenario would bring the population peak forward significantly.
• The inflection point for the 35-55 core consumer population across regions, especially the differences among China, Japan, Europe, and the United States.
• Whether companies respond to demographic headwinds through regional expansion, product reinvention, servitization, and M&A consolidation.
• Whether companies in the top 20% DDD quintile continue to show higher revenue surprises and fewer EPS misses.
• Whether AI can ease labor, care, and productivity pressures associated with population aging.