At this year’s IDDBA Conference in New Orleans, a recurring theme in the keynote and presenting speeches is the impact Millennials are having on the grocery and foodservice industries. What is important to Millennials has shifted from the traditional expectations of Generation X and the Baby Boomers. So how can food retailers and manufacturers plan for the needs of the new generation?
- Convenience – According to a report from the Bernstein Group, “At each income level, millennials spend the highest shares of their budgets on prepared foods, sugar and sweets, and pasta, and the least [on] grains.” Because of convenience, more Millennials are gravitating towards prepared foods, grab-and-go options, and grocery and meal delivery services. This shift bodes particularly well in the prepared salads, spreads and dips categories, where refrigerated dips and spreads are showing considerable growth, as noted in Mintel Research’s most recent Dips and Savory Spreads report. Millennials are spending significantly less time on food preparation, presentation, and cleanup—55 minutes less than Gen X’ers, who spend the most time at 143 minutes according to a USDA report on Food Purchase Decisions.
- Dietary Consideration – Millennials are overwhelmingly swayed by callouts like “Organic,” “Non-GMO,” “All Natural” and other label considerations implying less ingredients and reduced artificial flavors and colors. Additionally, according to a Mintel Purchase Intelligence report, consumers are responding to “clean eating” and “clean label” products at a much higher rate and perceive these callouts as healthy and natural – although noted in the same report that these Millennial consumers don’t fully grasp what “clean” meant regarding food labels. Also included in the Bernstein analysts, Millennials are eating 52% more vegetables, and also focus on protein packed diets (Keto, Clean30 etc.), while consuming less grains than ever. The future growth of protein salads and other ready to eat items is strong with the consideration that Millennials are looking for shorter ingredient statements.
- Focus on Custom and Premium – Millennials are looking for customization, whether that means designing meal solutions for a custom home cooking experience, or going to a build-your-own fast casual restaurant like Chipotle or Blaze Pizza. Additional to the importance of custom is the rise of premium. Tying to the previous point, Millennials see “Organic” and “Natural” as more environmentally, socially, and health conscious. 68% of millennials are willing to pay more for organic foods, and 66% are willing to pay more for sustainable foods according to research done by the Maru Group. Premium products are showing up throughout the perimeter of the grocery store, with particularly high growth in premium refrigerated options amongst Millennials.
- The Rise of the Social Eater – According to the annual Food News Study, in addition to seeking out content shared by media outlets and publishers, 20% of millennials receive their food news via Facebook posts from peers. Some research shows 69% of millennials take a photo or video of their meal before eating, essentially creating a free spotlight on the brands or restaurants they choose to feature. While these considerations are fairly unique to the Millennial generation, studies are showing the rise in the social eating experience. Research is showing increases in shareables for group eating occasions like tailgating and seasonal parties are crossing generational barriers, as social media culture has enabled preparations of aesthetically pleasing spreads that are meant to be shared by groups. This finding follows well alongside the Millennials propensity to purchase prepared foods.
So, the overall takeaway? The Millennial customer not only wants, but now expects: efficiency, personalization, a product with purpose and authenticity, and craves an experience that is tied to what they eat. The onus is now on food manufacturers and stores to deliver on these promises.