Driven by the unique experiences of their generation, Millennials’ food choices, shopping patterns, preparation of food at home, and selection of food away from home are all different from those of earlier generations. And in coming years, Millennials will have an oversized impact on the food behavior of Americans.
According to a recent report from Jefferies Alix Partners, “the maturation of the Millennials and the aging of the baby boomers, in our opinion, appear poised to rapidly transform the food-at-home industry, long thought of as a bastion of stability.”
The impact of Millennials on the food landscape will spread and persist over time. As the blog Millennial Marketing points out, “Food trends tend to trickle up the generational ladder.”
Born between roughly 1979 and 1998 (exact definitions vary), Millennials will greatly increase their influence over the US marketplace in the coming decade. The number of US Millennials over the age of 25 will grow from 17.1 million in 2010 to 64.1 million in 2020. Though the recent recession hit Millennials hard, total spending by US Millennials rose 13% from 2009 to 2011, while discretionary spending was up 10%, to $69 billion.
In the long-term pattern of generations, the Millennial generation (a.k.a. Gen Y) is a “civic generation,” characterized by coming of age during a volatile time, which breeds faith in institutions, a sense that the world is unpredictable, and a commitment to work together to make things better. The most recent previous civic generation was the GI generation (also called the “Greatest Generation”) that fought the second World War.
What are the key values and experiences of Millennials that may drive their interaction with food?
- Diversity. Millennials have grown up in a period when US family structures are radically diversifying. Nearly a third were raised by divorced parents, and they witnessed great diversity in the families around them. According to Technomic, 41% of US Millennials are members of ethnic or racial minorities—more diversity than any previous generation.7 Millennials’ food tastes reflect the diversity of their environment. They are “adventurous eaters,” willing to try new foods, and comfortable with a wide variety of flavors. Millennials are also very interested in travel.
- Carpe diem. Millennials have experienced a world of terrorism and financial upheaval. An ingrained sense of the world as random and subject to unpredictable crises is likely feeding Millennials’ propensity to live fully for today and use their youth to sample a variety of life experiences.10 Research shows that 87% of Millennials are willing to splurge on a nice meal even when feeling pinched financially.
- Self-awareness. Millennials have been said to have a high level of self-awareness and focus (though they are not necessarily self-centered). They want to “understand their place in the world and what it means,” and are keen to customize everything.
Case in point: McDonald’s recently introduced McWrap tortilla wraps are designed to lure Millennial customers, providing a platform for the variety and customization that Millennials demand. While the hamburger category accounts for the largest share (29%) of Millennial quick-service restaurant visits, McDonald’s reports that it is not among Millennials’ top 10 restaurants.
3 FOOD PREFERENCES
When it comes to food, Millennials have been described as being driven by “cravings, cost, and convenience.” Overall, Millennials are seeking food options that are fresh, natural and organic, and convenient, and that provide choice and variety. Millennials believe that the food brands and products they choose are healthier, more expensive, less processed, and more natural and organic than those of their parents.
- Variety and diversity. According to the Center for Culinary Development, Millennials “hanker for authentic diversity” and global cuisines (but also love mashups). They enjoy intense, extreme, and unusual flavors and textures.
- Indulgence. The Center for Culinary Development also says of Millennials, “They’re health conscious, yet prone to fits of decadent eating.” In a November, 2011 survey of US and British adults, 96% of Millennials agree, “An indulgent snack/ meal every once in a while gives me a nice break from the day- to-day grind,” compared to 87% of Gen Xers and 88% of boomers.
- Organic. A third (30%) of Millennials regularly consume foods that are certified organic, compared to 15% of boomers. In one study, 52% of Millennials said buying natural or organic fruits and vegetables was “extremely” or “somewhat important” to them, compared to just 45% of boomers. Looking at the inverse, 26% of boomers said buying natural or organic fruits and vegetables was not important at all, while only 17% of Millennials said the same.
3 BUSINESS IMPLICATION
- The size and buying power of the Millennial generation make it imperative for anyone in a food-related business to understand Millennials’ unique point of view about food. According to 8095, the Millennial research group of Edelman, there are 1.8 billion Millennials around the world and they will outpace boomer earning globally by 2018.
- Millennials’ interest in a diversity of cuisines and flavors, and their predisposition to variety (40% say they order something different every time they return to a restaurant), could require food processors, distributors, and retailers to offer a larger number of products, to refresh available offerings frequently, and to provide new options for customization of offerings. This will complicate supply chains, production, and distribution.81 Menu management, employee training, and other aspects of day-to-day operations at restaurants could become more challenging as new flavors and combinations are introduced to keep pace with Millennials’ tastes.
- Millennials’ willingness to eat on the go suggests that new handheld food offerings and handheld versions of traditional offerings could provide growth opportunities.