Today’s blog post was written by Annette Dunlap (Annette.firstname.lastname@example.org). Her position is the Food Business Specialist/Agribusiness Development for the North Carolina Department of Agriculture and Consumers Services.
The millennial segment of the U.S. population is of great interest to small business owners. Although she writes for the food entrepreneur, much of what she says is just a valid for any small business owner. I hope you enjoy.
Millennials. Millennials. Millennials.
Nearly every e-newsletter I’ve received this past week has had at least one article about the impact of Millennials on the food market. With that in mind, let’s take a quick look at their buying power and their impact on the food business.
First up: Let’s define what a Millennial is. Based on Pew Research, a Millennial is someone who was born between 1981 and 1997. So, the youngest Millennial turns 19 this year and the oldest turns 35.
Next: How big a group is Millennials in NC? According to the US Census Bureau’s 2014 estimate, Millennials make up 26.7% of the state’s population (for the United States it is just over 25%). This compare with 21% for Boomers, the second largest cohort. But, in terms of buying power, Millennials spend more money because they are in their household formation years, whereas Boomers are reducing their expenditures as they scale down.
These two pieces of information help understand why all retailers, including food purveyors, are responding to Millennial trends.
We’ve discussed those trends in previous Friday Food for Thought comments, but given the renewed attention in recent weeks, they are worth another look.
Trend: Millennials are trading restaurants for ‘grocerants.’ – This trend isn’t exclusive to Millennials, but we are seeing them increase their purchases of prepared foods at supermarkets and reduce their visits to restaurants. What does it mean for you as a food business?
- Shrinking footprint in the shelf stable section of the store as supermarkets increase prepared food offerings.
- Increased demand for complementary condiments.
- Greater need for complementary products to be positioned where the prepared foods are purchased, such as when mustard and pickles are near the deli counter instead of in the traditional section of the store.
More detail here.
Trend: Millennials are creating their own food culture. While the base of Millennials’ food preferences was formed at their parents’ dining table, they have grown into a cohort for whom idea sharing and information gathering are routine and instantaneous with a smart phone. The more sophisticated Millennials are the trendsetters who often blog and go to trendy restaurants. But as a larger group, there is a strong emphasis on global flavors, health and wellness, and clean labels. Many of you are already moving into this space with your use of natural ingredients and the absence of preservatives in your recipes. You are definitely “fashion forward” with Millennials. The key is to continue to remind them of the appeal of your products. More info here.
Trend: More Millennial dads in the store. A whopping 80% of Millennial dads claim to have primary or shared grocery shopping responsibilities. Having children changes their buyer behavior – somewhat. They will buy healthier foods, but they are also more likely to make the alcohol and related snack food purchases. Have you responded to the change in your consumer? At least one report says that dads aren’t motivated by couponing and are less price sensitive. But quality is a big deal to them. How do you promote your product? Would your promotional messages appeal to a male shopper? May be time to step back and take a look at your messaging. Get some ideas here.
In case you missed it – The latest edition of the Got to Be NC newsletter can be found here: http://www.gottobenc.com/sites/gottobenc.com/files/Newsletter%20June%202016_FINAL.pdf