SugarCreek: Brandworthy Food Solutions

Inside the Mind of Millennials: Filling a Niche Market

Posted by SugarCreek

Jan 19, 2015, 3:11:00 PM

inside-mind-of-millenialAmerica's grocery aisles are changing— fast. You may have noticed that groceries are bigger, offering a wider variety of goods and boasting a wider variety of brands than ever before. Many have even started opening on-site cafés. Shoppers' demands for convenience, selection and fresh preparation are at the heart of this shift.

According to the Food Marketing Institute's US Grocery Shopper Trends 2014 report, five major shifts in consumer behaviors and attitudes are influencing food product development and food retail practices, predominately due to the influence of millennials on the market.

1. Diversification of the primary store

Although the supermarket still remains the destination of choice for food shopping, consumers are increasingly visiting more channels, with the average shopper now visiting 2.5 food retailers per shopping trip. In fact, one in ten consumers reported to FMI that had no primary store. Many shoppers— particularly millennials— will shop for high-end or "healthy" items at a niche retailer like Whole Foods Market, but save money on basic staples and household goods by purchasing these at standard large grocers (such as Kroger) or bulk stores (Costco, Sam's Club, etc.).

2. Fragmentation of the primary shopper

Grocery shopping isn't just mom's chore anymore. Couples are sharing household duties more than ever before— 43 percent of primary grocery shoppers are now men.

3. Shift in the deciding generation

Unlike their parents and older siblings, 18 to 35-year-olds don't build their shopping lists from the items missing from a standard pantry. They typically plan their shopping trips based on a recipe they want to try. Furthermore, they typically shop for ingredients the same day they intend to cook a given dish. That translates to more shopping encounters over time.

4. Focus on wellness

American food consumers are increasingly demanding fresh, minimally-processed foods. One in four shoppers now bases his or her purchases on whether or not a food product has a short list of recognizable ingredients, and whether or not those ingredients are locally-grown or produced.

5. Food retailers becoming trusted allies

43 percent of shoppers view their food store as an ally in supporting their health and wellness goals. More than nine in ten shoppers report trusting their grocer to provide safe, healthy foods.

As a result of these changes, US grocers and other food retailers are now offering more niche products— meatless options, organic produce, an increasingly diverse selection of exotic and culturally-derived flavors — and a wider range of price and quality tiers (from cost-cutter all the way to super high-end). And because millennials are less likely than their forebears to shop with a set list, they are marketing more toward the impulse buy.

"FMI does not expect these differences to go away as millennials age," reported the Washington Post's Sarah Halzack. "Rather, they say this more spontaneous approach to meal-planning reflects broader changes in food culture that are likely to remain endemic to this generation."

A smart approach might be for grocers and other food retailers to market complete recipes.

Given that young adults are more apt to shop to garner the ingredients necessary to make a specific dish, grocers might do well to devise displays that feature a sample of a dish, then group the required ingredients together nearby. This would be a particularly effective approach if, as consumers are demanding, the sample dish requires only a few, fresh ingredients.

"Millennials are leading the way when it comes to adopting healthier lifestyles," wrote Consumerist's Ashlee Kieler. "This generation is more likely than any other to seek out food and beverage options that are minimally processed, contain only a short list of recognizable ingredients and locally grown or produced."

It would also be an effective marketing tactic for exotic dishes, showcasing ingredients with which shoppers are not yet familiar. Not only could such a display increase volume for these otherwise underappreciated products, it could result in such ingredients beginning to command a premium price (who knows, your display might be the tipping point in identifying the next quinoa).

Effective food product development must be directed by the market. And right now, the market is directing fresh, novel, healthy and convenient.

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SugarCreek

Written by: SugarCreek

Sugar Creek prides itself on its authentic culinary expertise. With nearly 50 years in the food manufacturing business, we know what Americans want to eat.

Topics: Millennial Consumers, Retail