Millennials are, without a doubt, one of today’s most influential demographic groups when it comes to marketing. The reason so much attention has been given to this group of 18- to 34-year-olds is because of sheer numbers: There are about 74.3 million of them, or about 30 percent of the U.S. adult population.
With numbers that high, much research has been conducted to find out the emerging trends among this group to better reach them.
Mindshare reports that the top five values of importance to Millennials are: honesty, trustworthiness, responsibility, love and loyalty. Mindshare also calls Millennials the most educated generation in history. They’ve grown up in an increasingly service-based economy, requiring brains over brawn, therefore intelligence is a key value to communicate. To them, intelligence means creativity, wit, self-awareness, curiosity, ability to see through lies, social intelligence and cultural knowledge.
So how can a company or brand parlay these values into their products, and marketing of the products, to engage this highly-sought-after demographic?
One of the key ways a company or brand can reach this target audience is by showing empathy and good intentions. Millennials like to know they are supporting brands that support their values and those of others. Friendship and relationships also are high on the Millennials’ radar. Traits Millennials exhibit—and look for in others—include: acceptance, no judgments about lifestyles or behaviors, forgiveness and being a good listener.
Concentric, a consumer branding, marketing and innovation firm in Charlotte, North Carolina, released findings from its in-depth nationwide study of more than 1,200 Millennials.
Concentric’s goal was to look past the over-generalization of this cohort to further shed light on the underlying drivers behind their unique behaviors and expectations as they relate to the food industry.
“Millennials are the topic of endless discussion and analysis because, as an industry, they make us uncomfortable—they’re far from the ‘traditional shopper,’” said Bob Shaw, president of Concentric.
“While there are many similarities that unify Millennials, it will be the savvy brands that dig deeper to uncover their true differences and find the right balance of segmentation and generalization that will be disruptive enough to truly engage with them,” he added.
Concentric identified six unique Millennial personas that can help the food industry to segment this enormous generation, and message to them in more targeted and engaging ways:
1. Hyped Up (social superstars)
2. Frugellenials (self-proclaimed savers)
3. Fauxganics (“healthy” as a lifestyle)
4. Old School Cool (old is in)
5. Carmen San Diegos (exotic adventure seekers)
6. Boomerangs (homegrown loyalists).
“Millennials have only known a world of warp-speed change and endless choice and customization—a new-age world, driven by technology and globalization that is new to previous generations, is their norm,” said Shaw. “This hyper-reality colors how they see the world. It shapes their reality to believe that anything and everything should be possible. And it forever raises their expectations for what, where and how they prefer to eat.”
Following are a few facts that illustrate the impact change, choice and customization has had, according to the Concentric study:
• Fifty-three percent are definitely more frugal now and pay a lot more attention to what products cost. Because of that, 40 percent shop once a week with a plan in mind and shopping list in hand.
• Twenty-six percent are currently or would consider buying food from Amazon.
• Only a third of Millennials believe that grocery stores have evolved to fit their lifestyle.
• Twenty-seven percent prefer to shop specialty stores like Trader Joe’s and health food stores like Whole Foods.
Social media necessary but must be done right
Social media also is a key way Millennials communicate and use such platforms to communicate with their favorite brands. But they do not want to feel they are being pandered to by any company.
Millennials also are concerned about health. While not obsessive about it—they are still young—they simply expect “healthier” food choices. Fifty-six percent cook more often and 52 percent make healthier food choices since moving out of their parents’ home.
Forty-nine percent say packaged and prepared foods must contain real ingredients vs. 17 percent organic. Seventy-five percent would buy more frozen, refrigerated and dairy foods if they provided more nutritional benefits.
Concentric also explored Millennial eating and shopping habits, attitudes and preferences toward foods, brands and retailers, as well as opportunities for new product innovations within the refrigerated and frozen food category. Here are a few interesting insights:
• Millennials spend about 30 minutes to prepare a meal at least a few days a week.
• Fifty-six percent self-identify as “semi-homemade” cooks who use fresh ingredients along with meal starters (refrigerated or frozen protein) to save time.
• Forty percent would reconsider brands they grew up with but no longer buy if they offered more healthy ingredients and 31 percent would if they offered new, more interesting flavors or preparations.
• When evaluating nutritional labels, protein (53 percent) is most important to both genders, followed by vitamins (46 percent), calories (41 percent), sodium (37 percent) and trans fats (35 percent).
• The top three healthy/trendy ingredients are whole grains (50 percent), yogurt (41 percent) and oats (31 percent).
• Thirty-five percent believe that Millennials, in general, prefer quick meal solutions (frozen and refrigerated meals), more so than their parents. Forty-four percent regularly use frozen and canned foods to make preparation easier.
• Fifty percent read grocery store ads and use store loyalty cards for deals.
What motivates Millennials to become a customer or guest of a brand or company? Relationships, intelligence and authenticity play a large role in marketing to Millennials.
According to newly issued research from Mindshare North America, the global media agency network that is part of WPP, badge brands—any brand that consumers use primarily for expressing their identity—that focus on the Millennial values of friendship and intelligence—will be best positioned to capture the estimated $200 billion of direct purchasing power and $1.3 trillion in indirect consumer spending attributed to them.
The research, “Brand Badges and the New Millennial Identity,” explores the changing ways Millennials are building their identities and what the implications are for how brands succeed over the coming years.
The new Millennial values are influenced by major social drivers that include Boomer parenting, digitized lives, delayed adulthood, increased education and the Great Recession.
Friendship: 60 percent of Millennials felt they were best represented by “things they do for other people.” Boomer parenting, an education focused on teamwork, social media and settling down later in their 20s and 30s have all increased the importance of “friendship values” among Millennials. This means communicating good intentions, such as kindness, generosity, honesty, humility and social commitment.
Intelligence: 72 percent of Millennials believe that being smart “is one of their greatest assets.” Millennials are the most educated generation in history. Intelligence is therefore a key value to communicate, and means showing: Creativity, wit, self-awareness, curiosity, ability to see through BS, social intelligence and cultural knowledge.
The result is that Millennials’ desire to communicate that they have good intentions and are empathetic, fun, intelligent and pragmatic. As the research showed:
• They expect good intentions from brands—62 percent of Millennials say supporting their employees show a brand has good intentions.
• Empathy is a strong driver—74 percent of Millennials “understand people’s flaws and accept them.”
• The desire for fun, meaning and happiness distinguishes Millennials from Gen X—79 percent “want their lives to have as much meaning as possible.”
• Experiencing the Great Recession heightened Millennials’ value of pragmatism—76 percent believe “drive is just as importance as intelligence.”
“There are two categories of what brands can do. One involves bringing people in—co-creation. The other is around social responsibility and creating social meaning. A lot of companies strive for both, though the really hard thing with this generation is making sure these things are not seen as an add-on. Any effort to put on an identity that seems forced will seem less authentic. If there’s anything that this generation has a really good radar for it is sensing when someone is trying to market to them. It’s a tough line for brands to walk,” said David Burstein, author of “Fast Future: How the Millennial Generation Is Shaping Our World” and contributor to the study.
Badge brands that want to succeed with Millennials must take three critical steps:
• Communicate Friendship Values. What are your principles, and do consumers understand them? If you support your employees, shout about it.
• Show Your Smarts. Be curious (and show your curiosity) as a brand; crossover your products and communications in unique ways; assume your consumers are smart.
• Set Up Friendship Values/Intelligence As Brand Key Performance Indicators (KPIs). Build KPI and measurement plans around the key Millennial values. [/su_box]
IDDBA Millennials Webinar, Part 1
Now Is The Time To Become A ‘Go-To’ For The Millennial Shopper
The International-Dairy-Deli Bakery Association (IDDBA) hosted a webinar Dec. 9 built around results from a study conducted by The Hartman Group called “Engaging the Evolving Shopper: Serving the New American Appetite.” The study covered several generational cohorts—shoppers 18 to 74 years of age—but the research dove a little bit deeper into the Millennial generation, which is expected to make up about a third of the U.S. population by next year.
In fact, Hartman had the Millennial study participants do “homework” for the study, having them provide photos of what was in their refrigerators and pantries as well as photos from their grocery shopping trips.
This month, Millennial consumer thought patterns and behaviors uncovered by the research will be outlined; next month’s story will focus on how these behaviors impact their shopping in the supermarket’s perimeter departments—dairy, deli, bakery, prepared food, specialty cheese and specialty meat.
Laurie Demeritt, CEO of The Hartman Group, presented the webinar.
“What makes them particularly interesting and compelling right now is they’re starting to really form their habits that we believe are going to be significant over the long term—where they shop, how they shop, what they shop for, what they care about,” Demeritt said. “So now is the time to start to be a resource for them, be a go-to retailer for them, a go-to department for them, as they shape and form those preferences.”
Millennials are beginning to transition into adult life, she says, and are in one of three life stages: living with their parents; living without their parents, on their own; or living with their own children.
“It’s become quite clear that if you’re a Millennial who has a child, you’re much more likely to look like a Gen-Xer with a child than you are to look like a fellow Millennial. Life stage is extremely important in terms of preferences.”
In this early-adult life stage, “Many of them start to talk about the importance of their career, in most cases saying career is not just about the money, although that’s a good part of it,” according to Demeritt. “But it’s also doing something they feel like they can look back on and feel good about, so there is a lot of meaning attached to what they want to do in their work lives.
“In terms of priorities, when we ask them what they care about, it’s things like living a long and healthy life; time for friends and family; and providing for those dependent on them.”
Also at this stage, she said, “They’re reconsidering some of their habits and starting to make what they see as healthier choices,” noting that Millennials also are generally more optimistic about the quality of their life getting better over time than other generations, she said. “We might attribute part of that to youth, but hopefully this indicates how this generation will age and how they view the future.”
In terms of their food habits, Millennials are still in the developmental phase, Demeritt says.
One of the initial phases is a time of food “rebellion” after they leave their parents’ home. They are experimenting with what they buy, how they cook and how they experience food; “they want to explore,” she said.
After that phase, they usually do return to some of the habits and preferences from their childhood home—hamburgers and macaroni and cheese, perhaps—supplemented by their own.
“When it comes to food itself, most Millennials, whether they have kids or not, think about food much as an adventure, as a way to discover new taste preferences and profiles,” Demeritt said.
She points out that the sense of adventure when it comes to food is not limited to Millennials, though; among all generations there is now more openness than in the past to adapting new and/or different foods into one’s meals and snacks. It may be less sweet, more tangy foods or even “tastes they weren’t exposed to at all growing up.
“With globalization and technology, it’s much easier for us to explore these new foods than ever before,” she added. “And most U.S. consumers think global foods are healthier. Why is that? They tell us everyone in the world is healthier than Americans—they must be eating something right. So there is this halo of health that is put around many global flavors as well.”
Millennials are starting to “dig in and sample regional specialties,” she added. “Instead of just Indian food, they’re talking about Tamil; they’re talking about food from the Basque region rather than just Spanish food. So they are starting to want to learn more about the cultural habits and norms that go along with food as well.”
It’s not that Millennials aren’t going through the drive-thru anymore; “it’s this combination of new and old, of nostalgia and adventure, that really fascinates them,” she said.
And they are not relying on restaurants to provide these adventurous flavors for them; they are interested in cooking them for themselves, Demeritt said.
“Twenty-seven percent of Gen-Xers and almost half of Millennials claim they would like to be cooking more. In many cases, they might experience a global food at a food service or restaurant environment and then decide they want to recreate it at home. So they simply go on their tablets, open up a YouTube video, watch how something is cooked and then try it at home.”
(Only 12 percent of Baby Boomers claim they would like to do more cooking or love to cook.)
And Millennials like to put their own stamp on their food. They might follow a recipe 90 percent and then throw in an ingredient they like to customize it, Demeritt adds.
The Millennials’ sense of adventure extends to all of their behaviors, Demeritt indicates, which is perhaps why they have been labeled as very disloyal in terms of stores and brands. But that’s not really the case, she says.
“When we really dig in deep, what we tend to find is not an active disloyalty or dislike; it’s simply that Millennials say, ‘wow, there are so many choices out there; why would I want to limit myself? Why would I want to eat just this type of food or this type of brand or go to this type of store when there is such a proliferation of choice out there?’ So we believe it’s important to think about brand loyalty in a new frame, which is basically a consumer is going out during this period of exploration and rebellion, if you want to call it that, and just taking advantage of all the choices that’s out there, but then starting to settle into some preferences, especially as they start to raise their own kids.”
IDDBA Millennials Webinar, Part 2
How Millennials Shop Six Perimeter Categories And Where Opportunities Lie
Demeritt looks at six fresh perimeter departments and how Millennials are using them and may want to use them in the future.
An overarching theme in all the departments, according to Demeritt, is that “Millennials definitely are craving variety and exploration…over 40 percent are looking to try anything new and different or trying new types of ethnic cuisines.”
This goes for them as well as their children.
“It almost becomes a badge of honor for that Millennial to talk about their child really loving the taste of Indian food or eating sushi at age 4 or preferring smoked salmon over chicken nuggets,” she added. “Those things are, to Millennials, signs that they are instilling food values in their kids, that it’s a good thing to explore, that it’s a good thing to experiment.”
They also put more priority on convenience and prepared foods solutions than older generations and view the supermarket as a viable alternative to restaurants. They also shop a wide variety of stores. In a 90-day period, Millennials shopped nine different stores for grocery items—the highest among the generational cohorts, Hartman finds. Their willingness to shop around presents additional inspiration for retailers to do well in these departments.
The Hartman Group finds that wide variety and environment are key to bakery satisfaction for Millennials.
For Millennials, “wide variety” includes traditional baked goods but also specialty items. That might be unique products, items with more international or global flair, gluten-free products, customized products or “just really delicious stuff,” Demeritt said.
They also put great stock in sensory cues, she says, which create the overall bakery environment. This includes the look and feel of the bakery as well as a pleasant shopping experience—a part of which is having an informed staff.
“We know that bakery in particular can be highly beneficial to the rest of the store in terms of that sensory experience,” Demeritt said.
Bakeries need to keep in mind that Millennials are much more fluid than other generations about what constitutes a meal occasion, she adds.
“They are just as likely to have a morning snack—something before breakfast or something after breakfast—and still eat breakfast. What they’re eating on those morning occasions can be savory, sweet, something some people would only think of for dinner or lunch. Millennials don’t have as many rules or habits around food rituals in terms of when to eat something or how much you should eat or what that product even is.”
Millennials’ preferred bakeries offer indulgent snacks and special occasion items, but Demeritt says there is room for growth in the dinner space as well as healthy snacks made with whole grains, ancient grains, slower-acting carbs. Many Millennials, she said, are “returning from gluten-free and wanting to have very traditionally healthy bread products, as fresh as possible.”
Millennials’ preferred dairy departments carry “foods I enjoy eating” and offer wide variety, Hartman Group finds.
Around variety, retailers should keep in mind that Millennials have expanded definitions of some categories, like milk.
“When you use the word milk, they don’t necessarily always think about dairy or cow milk; they think about the whole host of other alternative milks out there,” Demeritt said. “They also think about different formats, whether a protein shake, smoothie or yogurt drink. And then you start to think about kefir and fermented items. There’s a lot of variety right now that they’re starting to seek. They still want some traditional products but they are starting to seek out things that are more customized to their needs, and that’s what they typically mean when they talk about wider variety.
“The preferred dairy departments are performing well on things like breakfast and healthy snacks,” she added, with yogurts and some other dairy products filling those needs. But she says lunch and dinner are potential opportunities for the dairy department “as these consumers are more flexible about when and what they eat. Dairy is well positioned right now in the mind of Millennials, particularly as it relates to protein, and we can thank the rise of Greek yogurt for that. They see protein as the ingredient that can do no wrong. It symbolizes satiety, energy, weight management. So dairy right now has a halo for many of these Millennials that is moving toward this direction of the best way to get a clean source of protein.”
For Millennials, freshness is the most important factor in the deli department.
And while their definition of freshness can include the way product looks and a high turn rate, it also can hinge on “callouts around things like minimal processing, no nitrates, to determine the overall quality of that department,” Demeritt said.
“The other piece here is environment, and that has to do with the human interaction that takes place at the deli department,” she said. “That positive interaction can cast a very healthy halo across the entire store, and it is one of the few departments where they are guaranteed in many cases to have some sort of interaction potentially. That gives them the connection or culinary dialogue they wish to have with grocery retailers.”
Millennials are visiting the deli for lunch and dinner; it has become a “go-to” place for those occasions, but for “things like breakfast or indulgent or interesting snacks or even healthy snacks, we don’t always think of deli as a place to get some of those items,” she said.
A deli opportunity could be meat jerky, however, as “sales are going through the roof right now” for packaged jerky. It’s got that protein halo around it, and more women are getting into the category now thanks to “more interesting flavor profiles and different formats and textures and packaging as well,” Demeritt said.
Fresh Prepared Foods
As in the deli, freshness is very important to Millennials in the fresh prepared foods category.
“It’s the look and smell of the food, how it’s displayed in the case, how much it looks like it’s turning in the course of the day,” Demeritt said.
Effective merchandising for Millennials include “callouts around new items, seasonal items, local items, the way ingredients have been sourced. It’s not necessarily just calling out nutritional values, which I want to be clear on.”
Millennials visit fresh prepared foods departments for items for dinner or lunch for immediate consumption and/or to eat later. So opportunities may lie in breakfast, snacking and special occasion foods, she noted.
One of the fastest-growing meal occasions, which she touched on in the bakery discussion, is the “pre-breakfast snack.”
“It’s almost this new cultural phenomenon where consumers are having a little something before whatever they have that they call breakfast. It could be half a granola bar before they go have a quick workout and then have oatmeal later or when they’re at Starbucks getting a piece of banana bread, but they’re going to have a bowl of cereal later,” Demeritt said. “This pre-breakfast snack, we’re finding increasingly as consumers potentially go to grocery in the morning to source some of their fresh prepared meals for later that day, lunch or dinner, it might an interesting occasion to think about as a new daypart for fresh prepared.”
This is the department most likely to draw Millennials out of their primary store into a different store to shop, Demeritt said. Their preferred store in this category gets high marks for “foods I enjoy eating,” products customized to their needs and, higher than in any other department, unique items, showing their “desire to be exposed to more unique cheese products,” she said. “That’s certainly high on the list and one reason they might be leaving their grocery retailer for a stand-alone specialty retailer or simply another conventional retailer that might be doing it better in their opinion.”
Millennials use specialty cheese for snacks primarily, she adds. Although calorie and fat content in specialty cheeses is often quite high, Millennials are able to view it as a healthy snack because of its high quality and protein content, she says.
“As more Millennials eat tapas-style meals, or mini meals, where they’re having bits and pieces and bites of different things, we believe that specialty cheese could do an even better job of positioning against dinner or lunch, as the focus or possibly even the center of the plate on a meal occasion,” Demeritt said. “We can see that evolving in the next couple of years for Millennials.”
This department is one of the only departments for Millennials where healthiness is a top concern.
“The majority of Millennials today are still eating meat but are looking for certain distinctions and callouts around meat, whether it’s particular ingredients in that meat, how it was sourced, humane standards,” she said.
Perhaps surprisingly, “for most Millennials humane standards have little or nothing to do with the animal itself and everything to do with the fact that if they believe those humane standards lead to a higher quality product from the care. It’s an indicator of quality to them.”
Millennials shop the specialty meat category “for dinner and lunch to eat later; bringing something home that might be the center of a meal,” Demeritt said. “But there are opportunities around breakfast and snacking, with protein being placed so well today in consumers’ minds as a healthful ingredient and protein being sought more and more at breakfast or morning snack occasions.”