Developing Foods for Millennials

Millennials value freshness, authenticity, daring flavors and atypical eating occasions (like snacking). Food & beverage developers can capitalize on the food buying behaviors, influences, nutritional concerns and vast eating potential of this age group.

By Lauren R. Hartman, Product Development Editor

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Now in their 20s and 30s, millennials are getting more attention than any other generation lately, especially when it comes to food. The latest U.S. census report found this group has surpassed baby boomers in terms of population size, with the demographic representing 83.1 million people.

Coming into their prime spending years, they’re greatly influencing the food business. Millennials represent $290 billion in spending power, according to IRI Worldwide (www.iriworldwide.com). By 2020, millennial spending in the U.S. could surge to a whopping $1.4 trillion annually, representing 30 percent of total retail sales, say figures from Accenture (www.accenture.com).

This generation is often lumped together as having the same needs, characteristics and shopping behaviors when millennials are, in fact, quite different from each other, IRI indicates. CPG marketers should move past simplistic generalities and identify with millennials as truly unique individuals, IRI says.

“Food manufacturers keep forgetting that the generation spreads across such a wide range of ages and life stages [and] has very unique needs,” says Sara Martens a research analyst for the Corn Refiners Association (www.corn.org), Washington.

Millennials are the most digitally connected generation in history, raised with internet access and mobile devices, and they use both constantly in their shopping journeys. As such, they received “unprecedented exposure” to knowledge about diet and nutrition growing up – via the internet in particular – and continue to be influenced by nutrition concerns, says research from the Hartman Group (www.hartman-group.com). They shop online regardless of the time or place.

While their spending power is growing, they’re also spending it differently. 29 percent regularly use a mobile app to pay for purchases. “As the first generation of digital natives, millennials are comfortable with technology, though not all are early adopters or constantly connected,” says Robert Tomei, president of consumer and shopper marketing at IRI. “They are loyal to brands that prove themselves worthy, but they also enjoy hunting for a good deal,” he adds.

52 percent will choose quality over price. However, two-thirds are working with limited grocery budgets, so a good number are value-conscious by necessity.

Not only do they consider themselves foodies, they value premium ingredients and higher quality food offerings. They’re inclined to splurge on locally produced foods, Mintel says, although half of them find it important to make food purchases that fit within their budget.

The draw to high quality ingredients may explain why more than half of millennials find traditional grocery store fare less appealing than that of specialty stores. Functional ingredients that attract millennials include exotic flavors like lemongrass, sriracha hot sauce, matcha green tea, galangal Thai ginger and Meyer lemon, lists Lana Woshnak, director of technical services at DSM Nutritional Products (www.dsm.com), Parsippany, N.J., in a recent white paper series called “Strategic Nutrition for Millennials.”

Qualities such as all natural, organic, vegetarian/vegan and locally sourced speak to this generation, she points out. Living a healthy lifestyle means something to them, and they look for wholesome nutrition, they exercise, eat more hormone-free foods and tend to be more adventurous and “open to trying new flavors” than other generations. Woshnak also observes that transparency in business operations is important. “Millennials have shown their power [in the food and beverage industry] in persuading large companies to change the composition of some products.”

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