One of my favorite foods in the world is cereal. I love it—can’t get enough. I’ve had at least three varieties stashed in a cupboard ever since I went to college and managed my own grocery shopping. Despite having a reputation for being a cheap meal, cereal is actually a little expensive. Some of my favorite brands are more than four dollars a box, so when analyzing millennial spending habits, I can understand how they spend $797 on average per month on their grocery bills, according to a 2017 Bankrate Spending Index. That’s more money than any other age group.
A HEALTHYWAY article outlines the “why” of this really well, stating that growing families, a focus on healthy and sustainable foods, a desire for authentic, exotic dishes, a love of cooking, and social dining all play major roles in millennial spending habits. These findings enforce what we’ve already known about millennials: we are cheap, but will pay more for what we value, regardless of the product (even if it’s just cereal).
Grocery Retailers and Brands Must Understand What Millennials Value…
So what do millennials value when it comes to food? Research shows it’s a weird cross between ethical, healthy, cheap, and convenient—and if you could throw in some adventure, that’d be great.
… And What They Don’t
Before we delve too deeply into what millennials are looking for, it’s important to know what they’re not looking for, which is your brand. Millennials are much less likely to be loyal to a brand, often seeking cheaper prices with off-name brands or willing to try a new product based on a friend’s review. More than half of millennials say they are willing to share their brand preferences on social media compared to a little over 30% of baby boomers.
A Jefferies and AlixPartners industry update on the state of the food marketplace, “Trouble in Aisle 5,” summarizes their findings with the following description of the millennial generation:
“It is perhaps not surprising that this more culturally diverse group that came of age in a rapidly changing world where a plethora of information was available almost instantaneously, is much less brand loyal and much more willing to engage in different distribution models to fulfill its consumable needs. This generation appears to want what they want, when/where they want it; consumption will be on their terms.”
In other words, it’s time to start paying attention.
Millennials are Searching for Ethical Companies Who Focus on Health
With the internet, knowing about a company’s practices or a brand’s values is easy, as is learning about nutrition and its importance to quality of life. It has also made connecting with other cultures much more feasible. This has led to an increased interest in ethnic foods among millennials and a greater sensitivity to how food is sourced and produced, spurring a much more health-conscious and socially responsible generation.
As a Bankrate article on millennial credit card spending states, “Their generation [millennials] has a greater awareness of the impact their purchases have around the world and are more likely to spend more to honor those convictions.”
Cost Remains a Huge Factor in Millennial Buying Decisions
At the same time, this is still the generation who entered adulthood around the same time the economy crashed and burned. A Merrill Edge Report states that that 80% of millennials foresee another economic recession, with 30% predicting it will happen within the next five years—not to mention those who are suffocating under student loan debt. Keeping that in mind, you can start to understand why many millennials are clinging to life on the nutritional value of cheap instant ramen and SpaghettiOs® (what I eat when I’m not munching on cereal).
Millennials are social creatures jonesing for adventure and activities, but without the pocketbooks to support either. So instead of a trip to Taiwan, it’s a traditional Taiwanese meal. It’s adventurous, exotic, cheaper than a roundtrip flight, and comes with the fun bonus of cooking, which 60% of millennials say they enjoy. This draw to authentic ethnic foods has also extended to choosing grocers who stock specialty items and increased spending on restaurant dining and take-out food. Brace yourself: Bankrate data shows that millennials report spending about $50 more per month than other adults on restaurants foods, and 54% eat out at least three times or more each week. It’s still less than a round-trip to Taipei, but it does start to add up.
Convenience is Key
A willingness to pay for convenience is another noteworthy attribute of millennials, who have turned to subscription meal boxes like Sun Basket and Blue Apron for prepackaged ingredients for home-made meals, along with online grocery shopping and delivery systems like Amazon Pantry. Millennials have a long shopping list, especially the ones who are trying to travel via their stomachs. While many are willing to visit two or more stores to get the ingredients they want, more still are looking for a one-stop shop.
So far, the answer has been the internet, but specialty grocers are starting to wise up and carry staple ingredients from a variety of regions for those with an adventurous palate. Yes, they tend to have some steeper price points, but when you factor in an exhausting work day, long lines at the grocery store, evening activities, and the gas it takes to drive the car around the city looking for garam masala, a few extra bucks is well worth it.
Millennials Reward Effort
Maybe it’s all the participation ribbons we got growing up, or maybe it’s our increased exposure to all the problems in the world, but millennials really do reward effort. Ethical companies—the ones who are watching out for the planet and their consumers’ health—are the ones who are going to prevail. Those who aren’t slapping consumers with huge prices while expanding their offerings to include many cultures and ethnicities, especially those who make doing business with them easy, are the ones that are going to be rewarded with millennial dollars.
Millennials want the good guys to win in the grocery wars. We’re willing to put our money where our mouths are.
Subscribe via email to our Stevie® and Feedspot award-winning blog and get a fresh post delivered weekly to your inbox. We promise to keep it interesting, but you can easily unsubscribe if we don’t.