25 ways millennials will change the grocery industry forever

Pantry loading? That's for old folks

After the 2008 recession, many Canadians began to fill the pantry to save money. With millennials beginning to dominate in the supermarket aisles, pantry loading could become a thing of the past. The top reason millennials pantry load less items is because it’s too expensive. Kathy Perrotta, vice-president with Ipsos Canada says, “this change in approach to cost savings may appear different from boomers who would plan and cook.” Thirty-five per cent of millennials admit their biggest problem with meal prep is not having the right ingredients on hand.

Millennials tend to eat five to six mini meals instead of the traditional three square meals a day. Perrotta says, “Today, more than one-third (36%) of traditional snack foods are consumed as meal replacements or accompaniments.” Not only do millennials lead busy lives, but, Perrotta points out, it’s less work to focus on small meals. Plus, millennials think it’s healthier to eat multiple times throughout the day rather than eating a lot in one sitting. Mintel data shows that when shopping, millennials look for foods that will keep them full, give them energy and are convenient to eat.

Millennials No. 1 snack of choice is chocolate (65%), as opposed to boomers, who reach for healthier options. Nielsen found 70% of boomers’ go-to snack is fresh fruit. Why chocolate? Millennials want to indulge. And they’re definitely not opposed to junk food—after chocolate, chips and cookies are millennials’ favourite snack foods. “With the increased importance of millennials, they’re going to fuel the growth of these types of categories,” says Isabel Morales, consumer insights manager at Nielsen. “And as boomers continue to age, they’re going to fuel healthy and natural snacks.” Morales adds that manufacturers who are privy to millennials’ indulgent snacking choices will be more likely to gain their loyalty. What a sweet idea.

What does a boomer born in 1946 and one born in 1965 have in common? Not much. One was part of the Woodstock generation, the other the punk generation. Millennials aren’t all the same either. For now, think of them as three distinct groups:

Trending millennials 20 to 26: 7% of the population
Leading millennials with no kids: 27 to 36: 8% of the population
Leading millennials with kids: 27 to 36: 9% of the population

The decision between toast or cereal is irrelevant for many millennials. Why? On average, 20% skip breakfast. They don’t feel the need to adhere to traditional eating schedules “They’d rather sleep,” says Perrotta. A report titled Millennials: Meet the Boomers’ Kids by the Alberta Agriculture and Forestry, says “this could be an opportunity to innovate and message around the value of eating foods that provide fuel and are convenient to prepare.”

Nielsen research shows that one third of items consumed by millennials are unplanned, spur of the moment purchases. So much for shopping lists. “We know millennials to be an on-demand culture who have an unprecedented number of options and outlets servicing 24-hours a day needs,” says Perrotta. “Hence, they plan less often.”

Millennials are an inquisitive bunch. Theirs, after all, is the most educated generation in history, raised with Google at their fingertips. But that curiosity doesn’t extend to the fine print on packaging. Millennials are less likely to read the nutrition facts panel than boomers and Gen-Xers. Same goes for ingredient lists and even those claims and certification logos popping up all over products.

Companies often question the brand loyalty of millennials, but there’s no question they like loyalty programs. In its recently released 2016 Loyalty Report, Bond Brand Loyalty listed three characteristics distinct to millennials when it comes to loyalty programs. First, millennials are willing to pay more for products and services if they can also earn loyalty and reward points. Secondly, 44% of millennials are comfortable receiving product recommendations based on their purchase history, compared to only 30% of boomers. Finally, substantially more millennials value programs that offer special services like concierge (46% of millennials versus 22% of boomers).

Don’t take it personally, but millennials gravitate to food items made specifically for them. When Coca-Cola Canada launched its “Share a Coke” campaign in 2014, it boosted overall brand health scores by 8% . Nutella has followed suit with a campaign allowing customers to create personalized labels for their jars.

As millennials transition through life stages, they are more likely to look for direction in meal preparation. Alberta Agriculture and Forestry suggests promoting meal ideas that require less preparation time and fewer ingredients. Although taste is important, the report notes millennials in households with kids also have interest in the nutritional value of the meal.

Brands today can weave intriguing stories on everything from how they came about to the people who work for them to how they invest in their communities. And millennials love a good brand story. But don’t be fooled—having a brand story isn’t a guaranteed win. The Hartman Group, a Bellevue, Wash.-based consumer insights rm, states in its Food-Ways of the Younger Generations report that although millennials like a brand story, it doesn’t make them loyal. “Price often trumps a good narrative or social cause,” it reads. However, it goes on to say that brand loyalty begins to surface more once millennials have children. At this time, they look for quality brands that their children ask for and will eat.

Most of us like to ip through flyers to find deals before heading out on a shopping trip. Millennials are no different. They like to do their homework before shopping so they know what stores have the best prices on particular items. According to Nielsen, 76% of millennials shop at discount stores and spend almost four out of every 10 CPG dollars in discount retailers. Why? It could be their stage in life, as some are just entering the workforce and others are starting families. “Millennials represent an option to gain market share and sales with savvy marketing and sales geared towards them,” says Morales.

Millennials have lots of plastic cards in their wallets, and apparently they don’t want more. According to Nielsen, growing up with the internet at their fingertips, millennials are quick to embrace new technologies. They represent 83% of smartphone owners, so it’s only logical that 60% would prefer loyalty cards on their phone and 41% would prefer to use their phones to make payments. “Technology is second nature to millennials,” says Morales of Nielsen. “Retailers with electronic loyalty cards, online coupons and flyers have ample opportunity to appeal to millennials and their thirst for technology over retailers who are slower to adopt.” Mobile wallets, which combine payment with rewards, can be a great alternative to loyalty programs.

Studies show that almost one in 10 millennials follow a vegetarian or vegan diet. Why? It might have something to do with findings published by the World Health Organization last year linking processed meats such as ham and bacon to cancer. Ipsos’ Perrotta also suggests the high cost of meat, a lack of cooking skills and a focus on health as possible reasons.

Whether dropping the kids off at school or making the commute to work, millennials are more likely than boomers to grab food as they run out the door. A report from Alberta Agriculture and Forestry called Millennials: Meet the Boomers’ Kids, indicates that 10% of millennial meals are prepared in-home but eaten on the go. This is especially true for breakfast and lunch, but not so much for dinner. Mintel research indicates that millennials look for on the go breakfast options that can be eaten while commuting, or while at school or work. Mintel research also indicates that millennial search out breakfast foods that fuel their brains and bodies. This is an opportunity for grocery stores to showcase options with less prep time that can easily be packed to take on-the-go.

Healthy eating can mean different things for different generations. While some shoppers are adamant about purchasing fat-free or low-sugar products, for example, they won’t take notice of artificial ingredients in their food. Millennials prefer natural foods that are low-carb, low in sugar and high in protein, according to a report from Euromonitor. The Hartman Group agrees. Its findings show about 66% of gen-Zers look for food and beverages that contain only ingredients they recognize. In its Food-Ways of the Younger Generations report, the firm indicates that although most millennials care about health and wellness, those who are still living at home are less likely to be concerned about how their diet affects their health.

According to Acosta Sales & Marketing, a full-service sales and marketing agency in the CPG industry, millennials are doing the least amount of meal planning. Research in their report, The Revolution of Grocery Shopping, shows that 68% of millennials wait until just a few hours before dinner needs to be served to make their plans. Acosta suggests that this has increased demand for meal solutions such as meal kit subscription services that deliver right to your door. HelloFresh, Chef’s Plate and Goodfood are just a few examples of companies that have come on the scene in the past few years.

Millennials are well-educated about healthy eating, thanks to school curriculums that have taught this generation how to carefully read nutrition labels. “They can tell good food from bad food,” says the Hartman Group. “They have an amazing amount of information at their fingertips.” And they’re always learning, poised to become informed shoppers.

According to Ipsos Canada, millennials source 23% of their meals from restaurants. This rate is higher among millennials with no kids. Alberta Agriculture and Forestry research notes when selecting meals, millennials with no children are more concerned with convenience, while those with kids are concerned with the need to please the entire family. What a caring group.

32% of millennials without kids like convenience 
45% of millennials with kids are family pleasers 

Millennials are more likely than other generations to use technology while grocery shopping. According to the Brand-Spark Canada Shopper study, conducted earlier this year, 64% of millennials say they use an app because it saves them money. That’s followed by “easy to use”and “it helps me decide what to buy”.

Millennials have more in common with themselves than the boomer generation. Why? The internet. Euromonitor’s report, The Impact of Millennials on Consumer Behaviours on Global Markets, notes millennials are linked by their connection to the internet and their familiarity with social media and blogs. The internet exposes millennials across the world to the same icons and lifestyle trends.

Who are the millennial food sophisticates? They’re a subgroup of millennials who are foodie trendsetters. According to The Hartman Group, they’re educated and employed urban dwellers who live on their own. They like to post food to their social media and blogs. According to Hartman Group 66% looks for minimally-processed food, and 65% look for natural and organic options.

Millennials are consuming more organic and locally-grown or sourced items than their boomer parents.

Millennials like a good deal. Who doesn’t? This opens up opportunities for grocers to grow their private label offerings. In fact, according to Nielsen data, 70% of millennials buy more private labels than any other grocery shopping generation. Why? Millennials grew up with private labels in their households, so it’s nothing new to them. This differs from their boomer parents, who were the guinea pigs of the grocers’ private label programs. Millennials are also less brand-loyal, and open to trying new products. “Private label brands have an opportunity to add to the bottom line by increasing their product offerings and making sure the millennial generation is well aware of new products and can find them in the right stores at the right time,” says Nielsen’s Morales.

Millennials have a hankering for international dishes. They’ve been exposed to more ethnic foods than past generations, both because they’re a globetrotting bunch and because ethnic offerings are becoming more mainstream in the grocery aisles. The Hartman Group research suggests that millennials without children are the most interested in global cuisines. Millennial parents find it difficult to explore different foods because they have to satisfy the wants of different family members. In the past, food items like sushi and tacos were considered ethnic options. Today’s grocers should venture beyond standard ethnic fare, both in their packaged and prepared food options. Your customers will follow.