SugarCreek: Brandworthy Food Solutions

Specialty Market: Following the Millennial Food Dollar, Pt 1

Posted by SugarCreek

Feb 20, 2015 2:30:00 PM

craft-beer-in-standMillennials are slowly taking over the CPG marketplace. Most experts predict that Millennials will outpace Boomers as top purchasers in the US by the end of the decade. And brands and businesses are feeling the pressure to find out how to cater to this demographic, which includes those born between 1980 and 2000.

Craft foods, such as craft beers, handcrafted breads and artisan cheeses, and trendy, new food products score high priority in Millennials’ shopping baskets. But it’s not just a singular food that Millennials are on the hunt for, this demographic wants a personalized food experience—an experience that’s typified by the small specialty store (the butcher’s shop, the bakery, the deli).

While supermarkets and mainstream brands aren’t automatically on the outs, unless they find a way to mesh with millennials’ expectations, they will see a slide in sales.

Solid Market for Craft and Specialty Foods

According to Food Navigator, the specialty foods market has made great strides in the past two years, thanks to millennials. Of the total food market, the specialty food sector encompasses 10.4 percent. For an industry seeing $88.3 billion in sales, the breakdown of the most popular categories of purchases is spot on for the trends of craft and specialty food items:

  • Nut and seed butters had a dollar sale increase of 51.6 percent
  • Eggs increased by 35.9 percent
  • Frozen desserts are up 28.2 percent
  • Ready-to-drink coffee and tea increased by 25.4 percent
  • Yogurt and kefir are up 20.4 percent
  • Pretzels and snacks increased by 19.1 percent

Marketplaces for Specialty Foods

Markets which focus on specialty foods, such as all-natural stores or specialty food-exclusive stores, are at the front of the pack while mainstream supermarkets, on the other hand, are lagging behind even when they sell some of the trendiest craft foods.

Millennials want and will support those stores that visibly align themselves with strong ethical standards. Thanks to digital content and social media, it is easier than ever before to verify the legitimacy of these standards.

The most successful stores in this sector are stores that boast an eco-friendly, sustainable, GMO-free and/or organic image that mirrors Millennials’ own inclinations, and this particular ethos most run throughout the entire brand, as they do at Trader Joe's and Whole Foods. As a result, these stores enjoy whole-hearted support from Millennials.

Brand Loyalty Is Dying

While Baby Boomers hold religiously to big brands that offer great value, Millennials are not so easily swayed. Food Navigator notes that Millennials look for more than the cheapest item on the nearest shelf when they make their selection:

  • Proximity to home that can accommodate their busy schedules and fast paced lifestyle
  • Competitive pricing without sacrificing in values and ethics, i.e. fair trade, organic, and non-GMO products rule the roost
  • Iconic brands with a personality on target with Millennials.
  • Ability to identify lists of ingredients and food data via apps, such as Guiding Stars

When it comes to how Millennials choose a brand, trust is a motivating factor. This is a supremely skeptical cohort who automatically doubts any health food claims promoted by a brand. Millennials do their own research online, and again in the store aisle, to determine if a brand is on the up and up.

For brands prepared to promote a personable and identifiable image through digital content, like the kitchen tips developed by Panera, Millennials will devour this information and use it to determine what specialty and craft foods to choose. No longer can a brand coast through a supermarket on the strength of packaging and traditional advertising and expect to end up in the cart of a Millennial.

Move Over for the Millennials

As Millennials begin to overtake the Baby Boom generation in total dollar volume of the CPG—an estimated 70% by 2020 and a projected $250 billion of spending annually, according to Food Navigator—there is an obvious financial incentive for businesses and brands to understand how the Millennial mind makes grocery decisions.



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.