Entrepreneur spotted growth in seniors market early
Today most professional managers take Canada's aging population into account when assessing strategy. But during the late 1980s, despite obvious signs of seniors' growing clout, many executives acted as if everything was business-as-usual. That's when Eddy Savoie saw his chance.
"I got into retirement homes because I was looking for a nice place for my parents and couldn't find one," Savoie, president of Groupe Savoie said. "So I decided to open my own."
Savoie's background is in construction, a notoriously cut-throat, low-margin industry. But his decision to move into designing, building and operating senior citizens' homes set the stage for more than a decade of uninterrupted growth.
Savoie's first project, Les Résidences Soleil Manoir Boucherville, opened in 1989. And although his parents took just one of the 192 apartments, he quickly rented the rest. During the ensuing years, the company broke ground on a series of new developments.
By all indications, he chose the right line. According to Canadian Mortgage and Housing Corporation data, Canada's aging population continues to be one of the primary demographic influences on housing demand.
The number of seniors in Canada is growing at roughly twice the rate of the general population. In 2001, 4 million people were aged 65 or older, a number that will jump to 6.7 million by 2021. And Groupe Savoie is growing right along with them.
Today the company's 600 employees run nine retirement homes throughout Quebec under the Résidences Soleil banner. These homes contain about 3,000 apartments, which generate close to $45 million in annual revenues.
It's a true family business. Savoie's wife Carmelle and their five children Nataly, Nancy, Eddy Jr., Nadine and Janet all work for the company bringing the business an all-important human touch.
"Our clients spend the last years of their lives here. And we want to make it as pleasurable as possible," Nataly Savoie, vice-president (marketing) said. "When my father walks the halls people come up and talk to him all the time. He knows almost all of them."
Groupe Savoie clients generally pay a flat monthly fee, which covers the apartment rental, security, on-site nurse and an emergency service that lets residents summon staff at the push of a button.
Three-quarters of company's clients are women, often in fragile health and many can no longer cook for themselves. As a result all of the residences have cafeterias, and clients can sign up to eat one or all of their meals there.
"For many, it's a big advantage because it gives them an excuse to get out of their apartments and meet other people," Savoie said.
The average stay at Groupe Savoie residences is approximately seven years, which means the company needs to find new occupants for about 14 per cent of their 3,000 apartments each year.
Eddy Savoie's high profile in Quebec's francophone community is a big help in landing new clients, his daughter said.
Each week he appears on a television program geared toward seniors titled Y'a plein de soleil, for a five-minute segment, to talk about one aspect of challenges that seniors face. The company also devotes a good chunk of its advertising and sponsorship dollars toward the show. The balance is devoted toward local and targeted print publications.
According to Nataly Savoie, it's money well spent.
"You wouldn't believe how many calls we get from people who saw my father on TV," she said.
With Eddy Savoie's target market growing steadily he has no plans to change course any time soon.
The company is currently building a new 500-unit home on Notre-Dame East in Pointe-au-Trembles overlooking the St-Lawrence Seaway and is looking at several new potential sites.
And with seven members of his immediate family working for the company, he has had little incentive to bite at the many offers he's received from investors looking to get a cut of the action.
"I'll never sell. We are always being approached by the Caisse, the Japanese and the Arabs, but I'm not going to do it," Savoie said. "I love my work too much."
Sidebar: Step-by-step retirement services
Although Canadian businesses are rushing to serve the country's growing senior's population, they'd better watch out, because today's crop of golden-agers are much different than previous waves said one marketing expert.
"Sixty-year's old today is not the same as it was thirty years ago" Michel Laroche, a marketing professor at the John Moloson School of Business said. "Today's seniors are much healthier than they were in the past. They also have a lot more money and are going to be more demanding about their retirement services."
According to Laroche, better health means that today's seniors are prolonging their decision to move into retirement homes.
"Companies should consider offering step-by-step retirement packages, which are very popular in the states," Laroche said. "That means people pay only for the services which they need right now."
According to Laroche, younger and healthier retirement home clients typically need only basic services such as an apartment, a few common areas such as a pool, cafeteria and security. But as clients age and their health declines, add-ons should be offered such as nursing care, assisted baths and so on.
"Companies have to be flexible," Laroche said. "Because not everybody's needs are the same."
Photo caption: Eddy Savoie, president of Groupe Savoie/ Les Résidences Soleil loves his senior citizen clients so much, he attends all of their birthday parties.
|© 2004 Peter Diekmeyer Communications Inc.|