The food-at-home industry is likely to see major changes as a new generation emerges. Millennials (born between 1982 and 2001) are entering a part of their lives where they are experiencing steady incomes, leading to an increase in spending. As they begin funding every aspect of their own lives, they are forced to do their own grocery shopping, many for the first time.
Millennials have different values from the similarly-sized Baby Boomer generation (born between 1946 and 1964). When the Baby Boomers were young, there was not as much of a difference between the shopping habits of their demographic and that of their parents’ generation. Now food makers and grocery retailers are faced with the challenge of marketing to two completely different targets: the young Millennials and the aging Baby Boomers.
This shift in demographics will affect where and when people buy groceries, as well as which products they choose. With Millennials, everything is about convenience. Online shopping, smartphone shopping and delivery services can all be more convenient than a trip to the grocery store. While Millennials are willing to try these new shopping experiences, Baby Boomers are less likely to be on board with the latest digital grocery shopping trends.
Millennials are also less loyal to food brands than their older counterparts. They are willing to try something new if it’s to their advantage. The “Trouble on Aisle 5” study by global investment bank Jefferies and global advisory firm AlixPartners showed that Millennials’ income has a dramatic effect on which brands they purchase. They are not committed to buying any specific brand, unless it’s the more valuable choice. However, sometimes Millennials are willing to pay more if the product offers convenience, freshness, health or anything else that they particularly value.
While the Millennials set about changing the market, the Baby Boomers are expected to remain the same. They will stay loyal to their brands and grocery stores and will continue to shop the old-fashioned way. Little adjustment need be made by grocery retailers to keep the smiles on their Baby Boomer customers’ faces. However, as Boomers continue to age, healthier food options become more appealing to them. Fresh and healthy foods are a priority for both Millennials and Baby Boomers.
That may be the one thing these two very different groups can agree on.
Photo credit: Andrew Hitchcock