Supermarkets are raising the bar on their foodservice offerings and, by doing so, are attracting the attention of the coveted Millennials, according to a new report from The NPD Group. Restaurant-quality and fresh food, chef-driven menus and in-store experiences have given rise to the hybrid “grocerant”—and inspiration to Millennials to visit and spend, according to the report, “A Generational Study: The Evolution of Eating.”
In-store dining and take-out of prepared foods from grocers has grown nearly 30 percent since 2008 and accounted for 2.4 billion foodservice visits and $10 billion of consumer spending in 2015, based on NPD’s ongoing foodservice market research.
More than 40 percent of the U.S. population purchases prepared foods from grocery stores, and while Millennials use grocery stores less than other generational groups, retail foodservice is gaining traction with them, according to the NPD study, which examines how eating behaviors of key generations are set to change as they move through life stages that examines the influence of age, generation, life stage and values on current and future eating behaviors.
Consumers rate visits to grocerants higher than traditional quick-service restaurants (QSRs) on variety and healthy options. These attributes are among the most important motivators of purchase and customer satisfaction to prepared foods consumers. Grocery prepared foods are also rated higher on freshness and quality, which are attributes particularly important to Millennials, and NPD finds that freshness will remain an important factor in Millennials’ eating behaviors as they go through their life stages.
Another way in which grocerants are appealing to Millennials is by offering them an “experience.” Many grocers now offer restaurant-quality food at a lower cost than full-service or some fast-casual restaurants, and specialty categories like Asian, seafood, Italian, Mexican and barbecue. Grocery stores are aiming to cater to all dining needs, including hot, custom-prepared grilled meat, food bars, soups and sushi. A growing number of grocery stores provide comfortable, casual seating for in-store dining and some a full-service restaurant.
“Millennials’ interest in the benefits and experience supermarket foodservice offers will continue to be strong over the next several years,” according to David Portalatin, VP and industry analysis at NPD Group. “This forecast bodes well for food manufacturers and retailers who have their fingers on the pulse of what drives this generational group. Give the Millennials what they want—fresh, healthier fare and a decent price—and they will come.”
Editor’s note: The Shelby Report and The Griffin Report report on the “grocerant” business in their [email protected] sections in every issue.