It’s not fair, but in some circles Millennials have become known as the generation that underperformed.
This group, which ranges in age approximately from late teens to mid-30s, was hit especially hard by the Great Recession and its aftermath. High unemployment rates led many Millennials to continue to live with parents and put off forming households and having families, a fact that clearly suppressed their spending. More recently, a falling Millennials unemployment rate and slightly higher wages for this group are hopeful signs despite continued conservative spending.
Increasingly, however, Millennials are becoming known for something very different than underperforming. Their influence is bursting out all across the industry, even revolutionizing food trends.
Kantar’s Retail’s latest version of its annual PoweRanking report underscored an urgency across the food business for “figuring out how to win with the approximately 80 million Millennials now aging into their prime spending years."
That urgency is being injected directly into trading partner relationships, as one retailer survey respondent told Kantar:
“It is crucial that suppliers help us better understand the Millennial shopper. We need their guidance and collaboration in adapting and preparing for their new shopper needs in assortment, value and communication."
Insights about Millennials are increasingly driving major retailer initiatives. Consider Meijer’s “Ready! For You" meal planning program launched in August across all its 213 stores. The company’s research specifically pointed to how Millennials buy differently, including last-minute list-making and shopping for a particular recipe rather than restocking the pantry. Meijer’s meal program focuses on providing meal ideas and making it possible for shoppers to save money if they buy all the ingredients together.
Millennials are probably having their biggest influence in revolutionizing food. They are willing to spend more on specialty foods, which is powering new trends such as craft ice cream. Just as important, Millennials are making their mark by embracing fresh foods and downplaying processed varieties, said Scott Mushkin, an analyst with Wolfe Research.
Mushkin has followed the Millennial evolution for a number of years and has been ahead of the curve in discussing how this group would transform the food-at-home industry.
That shift is underway, and earlier this year he pointed to the acceleration of the “pure foods trend” in a report he authored for Wolfe. It found that Millennials are leading change with a strong preference for healthier, fresh, minimally processed, natural, organic and local foods.
The food industry, including consumer packaged goods companies, has been surprised by how fast this has taken shape, he said.
Look out for this to accelerate and take on more importance, Mushkin concludes.
“It's clear these are the megatrends, what these people care about as they settle down, have families, and move into their prime food at home spending years of 35 to 54. You’re likely to see these trends become incredibly powerful.”
Mushkin is on target in my opinion. Imagine what will happen when Millennials really start spending. There’s a limited amount of time left for retailers and manufacturers to figure out how to win these younger customers.