Talkin’ ‘bout our (next) generation.

I’ve been to a number of conferences over the past year and inevitably, the agenda includes at least one breakout about “Millennials”. There’s always an audible groan as attendees agree that they have “heard enough about this generation of experience-seeking, non-committal, entitled kids!”. (I should mention here that I am considered a Millennial myself…) Anyway, it’s time for Gen-Z.

A Gen-Z panel at this year’s IFMA COEX opened up about their preferences and their opinions on what steers their decisions when it comes to food. And they have a lot of them. From what I observed, this panel was articulate about the macro social issues that influence the way they think about what—and how—they eat. Simultaneously, they were practical about how their current stage of development impacts how that plays out in “real life”.

 

WHY IT’S HAPPENING

Now the single largest single population segment1, Gen-Z makes up 26% of the total media audience and with key differences in values and preferences, they pose an interesting challenge for brands. Encompassing those born between 1997 and 2015, this generation has serious spending power: Some through personal wealth and others through “pester power”.

As this generation approaches adulthood, early studies are homing in on what shapes their values and how that is being played out with purchases – whether of products or experiences. A few key things to consider when it comes to the food industry in particular:

Digital from DOB. This is the first generation that has truly grown up with cell phones—their parents are connected, and they access them at a much younger age. The panelists all voiced their use of their smartphone as a way to discover (Instagram), vet (Yelp), obtain (online ordering) and ultimately capture their unique experience. It’s worth noting that their time is spent on mobile devices rather than a PC—in fact, this generation spends an average of 8 minutes a day online via PC as compared to the 1+ hour of older generations1.

Socializing. What may seem in contrast to the above point, Gen-Z values “hanging out and socializing” as a top priority along with ordering shareable items when it comes to their preferred dining experience2. You may have heard rumblings of this generation noting higher levels of loneliness, with less human-to-human, authentic interactions. So it’s not surprising that Gen-Z seeks interaction with family and friends when it comes to dining. Keep this in mind as your brand thinks about how to facilitate relationship-building experiences and environments for Gen-Z.

 

WHAT WE THINK

This generation is different—brands and experiences in the food space are going to have to understand their expectations in a more holistic way.

We know that Gen-Z is outpacing Millennials in their occasions per week at top chains in the US3, and it’s up to us to keep a two-way conversation going with this group to truly understand them. As a more independent and entrepreneurial generation, it’s going to be more critical than ever to understand both what the data says about what matters to them and what resonates with them as individuals. Face-value of where, when and how they are dining are likely to line up with values that occasionally surprise us based on past generations.

 

WHAT’S NEXT

The largest qualitative and quantitative study to date was completed by KANTAR in 2017 and explored this generation’s attitudes and behaviors4. When it comes to media recommendations, “innovative formats” are cited as a way to win with this generation. In terms of creative recommendations, “expect a challenge”, “be interactive” and “push the aesthetic” are the headliners—which captures the pace and outside-the-box thinking that is going to be required to really understand and resonate with Gen-Z.

Full of nuances like the simple examples above, Gen-Z is discerning and likely going to be a challenge as marketers attempt to understand this ever-changing consumer.

[1] “Move over millennials, Gen-Z now the largest single population segment.” Sterling, Greg. Marketing Land. 17 June 2017.
[2] “The Gen-Z Selfie.” Technomic, courtesy of SmartSupport. June 2016.
[3] “Shifting Market Dynamics.” 2018 COEX, courtesy of Foodable Labs.
[4] “How to market effectively to Centennials.” Inskip, Mark. WARC Best Practices. July 2016.

What’s your function?

Have you had pH balanced water recently? Or added a teaspoon of collagen to your coffee? Maybe enjoyed a beverage with probiotics like kombucha? While not everyone has jumped on this trend, the functional food market is growing rapidly, with revenue projected to reach over 440 billion dollars by 20221.

Referring to food and drinks that serve a greater health benefit, functional products are making their way to a broader range of formats. Brands look to sync added value with convenience and impact to win consumers over, as many of these products aim to be part of a daily routine.

 

WHY IT’S HAPPENING

The growing awareness of the direct links between diet and type 2 diabetes, coronary heart disease and cancer are clear drivers of the growing interest in functional foods. With the increasing presence of lifestyle diets that align with the same qualities, the focus on consumers’ health and well-being is creating a demand for food that does more than just satisfy hunger—essentially, consumers want more bang for their calorie.

Functional beverages were the first in this arena, from sports and energy drinks to a wide range of probiotic mixes. In fact, as many as 24% of juice and juice drink products now feature a functional claim1.

This has paved the way for functional ingredients that show up in a variety of formats to take center stage at shows like Expo West and retailers like Whole Foods. Primal Kitchen is a brand that offers a wide range of products that are Paleo, Primal, Keto-friendly, Whole-30 approved and “uncompromisingly delicious and nutrient dense”. They feature a wide range of formats of collagen—with benefit claims for bone health, joints, and skin.

 

WHAT WE THINK

Consumers are looking for ways to “strive” rather than “survive”—and while it might be difficult to anticipate which functional products stick, the mindset will continue to grow.

We understand that consumers are becoming savvier and that some of these products have much stronger benefit claims than others. It is likely that many of the products we see today may be short-lived as consumers decipher which have the greatest impact (and which fit within their lifestyle). But the mindset is indicative of where the food industry is heading. Value matters.

 

WHAT’S NEXT

Functional food and beverages are making a more direct and intentional connection between what consumers put in their body and the benefits they expect when it comes to their health and well-being. As studies begin to shed light on the mind-body connection, the proliferation of functional foods will gain momentum. While the range of available products broadens, consumers are going to have to decipher what to prioritize—if they don’t reach decision fatigue first.

Brands are going to be faced with the challenge of making their functional products easy to understand—with real, reliable links to health benefits. Perhaps the biggest battle they will face is breaking through the benefit clutter.

 

Just some Thought for Food™

 

[1] “U.S. Functional Foods Market – Statistics & Facts.” The Statistics Portal. https://www.statista.com/topics/1321/functional-foods-market/

The “New” Convenience

It’s Wednesday around lunchtime and, like many working professionals, I’ve hopped over to the local grocery store in search of a quick meal before my next meeting. Expectedly, the line for the salad bar is four or five people deep, as well as the Asian wok station, the sushi bar and the deli counter.

Yet one spot remains eerily empty, despite a plethora of convenient meal options: the frozen entree aisle. The situation seems almost counter-intuitive; an endless assortment of cuisine types ready to go in under 5 minutes and not a soul around. So why the lack of customer traffic?

A sample of several frozen meals, which are no longer considered “convenient” by the modern consumer.

As the Hartman Group explained at their 2018 Food Culture Forecast a few weeks ago, one of the main factors is that frozen meals are no longer considered “convenient” by the modern consumer.

The “New” Convenience, as CEO Laurie Demeritt states, is much more than the intersection of speed and efficiency.

WHY IT’S HAPPENING

Convenience food is nothing new for the industry. In fact, the ’50s and ’60s began a golden age of convenience-eating with food innovations focused on giving housewives easier ways to put a meal on the table. Frozen, single-serve meals. Canned soups and stews. Jars of pre-made sauces and gravies. Boxed meal solutions.

These product solutions became even more widely used in the late sixties as more women began heading to work and had less time and energy to prepare a home-cooked dinner.

But as the Hartman Group explains, the very qualities that made these products so enticing decades ago are now at odds with today’s consumers’ food values. Reliability has given way to health and wellness concerns. Experience is now prized over efficiency. Uniformity has been replaced with authenticity and predictability is now second-fiddle to distinction.

A graphic comparing cultural values between generations.

Source: “The New Convenience.” A.C.T. Food Culture Forecast 2018. The Hartman Group. April 2018.

WHAT WE THINK

It’s not that convenience is no longer relevant, it’s that many brands haven’t changed how they think about–or talk about–convenience as a product attribute.

Consumers today no longer believe that opting for convenience foods (easy, quick, and accessible) means sacrificing freshness, quality, and health and global influences. Our marketing and innovation however, haven’t fully caught up to modern expectations. To be considered a convenience brand/product we must expand our messaging to include these new consumer expectations.

WHAT’S NEXT

The Hartman Group identifies three distinct attributes consumers are looking for when it comes to modern convenience products.

Easy –> Empowering

Despite the news that consumers don’t want to cook, they actually do see the value of a home-cooked meal for themselves or their families.

  • Old Convenience: making it easy to assemble a meal in as few steps as possible
  • New Convenience: empowering users with a new skill or knowledge to successfully prepare a meal

Despite the news that consumers don’t want to cook, they actually do see the value of a home cooked meal for themselves or their families.

Quick –> Engaging

Time is even more of the essence. But consumers no longer want to sacrifice interesting, customizable fare for speed. Brands should think about, and package, products as components that can be “arranged” in different ways to create personalized meal solutions.

  • Old Convenience: the ability to prep and serve a meal in the least amount of time possible
  • New Convenience: the ability to customize and personalize my meals, no matter how small

Consumers no longer want to sacrifice interesting, customizable fare for speed.

Accessible –> Flexible

Functionality remains critical when it comes to convenience foods, but ensuring products can be sized, scaled, and streamlined to meet unique consumer needs are equally as important.

  • Old Convenience: pre-cut vegetables that can be combined to make a salad
  • New Convenience: a complete salad kit that can be eaten as a side OR added to grilled chicken to make a meal

Ensuring products can be sized, scaled, and streamlined to meet unique consumer needs are as important as functionality.

Trend Alert: Adaptogens

While some take their coffee with extra cream or even a dash of cinnamon, Four Sigmatic is proposing a unique alternative: mushrooms. The blend promises increased productivity, focus and mental creativity due to naturally occurring compounds found in mushroom varietals like Lion’s Mane and Chaga.

Blending coffee with mushrooms promises increased productivity, focus and mental creativity.

So in late April, those of us attending the Hartman Group’s 2018 Food Culture Forecast sat inside a hotel ballroom and sipped the fungi-infused beverage as we listened to presenter Davey McHenry talk about a growing consumer awareness of, and demand for, products that address brain health and functioning.

In fact, mental health is the second most-mentioned health priority by American consumers (#1: weight control). Which makes it a unique and highly attractive area of innovation exploration.

WHY IT’S HAPPENING

Despite advancements in technology and the ability to multi-task from anywhere, adults today are busier and more stressed out than ever before. Consider the following:

A graphic showing the increase in time spent working, commuting, and caring for children for the average American family.

Source: “The New Convenience.” A.C.T. Food Culture Forecast 2018. The Hartman Group. April 2018.

And that’s led to a sizable increase in the number of consumers who say it’s taking a toll on their mental health:

  • 55% of all households are treating or preventing anxiety and stress
  • 61% of Millennials say they’re treating or preventing anxiety and stress
  • 31% of teens say they feel overwhelmed1

So it shouldn’t be a surprise that we’re seeing an increase in products like foods, beverages and supplements that utilize adaptogens (substances that help manage stress) and nootropics (substances that increase cognitive functioning).

WHAT WE THINK

New innovations that provide mental health benefits are ripe for growth, but require approachable and educational messaging to entice consumer trial.

Many of the adaptogens and nootropics used today are completely unfamiliar–and even unpronounceable– to the vast majority of consumers. Food marketers will need to utilize branding, naming and messaging to clearly communicate sought-after mental health benefits. Manufacturers will also need to provide basic education on ingredients and their origins in marketing communications to make products approachable to the mass market.

WHAT’S NEXT

Take a cue from the following brands on how to successfully market food and beverage products that promise enhanced cognitive functioning:

Brain Alchemy Latte by Project Juice

A new offering by the San Francisco-based restaurant and juice company, Project Juice, this company also uses a clever yet descriptive name for its new adaptogen coffee drinks like “Matcha Energy” and “Golden Immunity”

  • The website describes it as a “therapeutic and deeply nourishing formula for the brain.” It also utilizes the packaging to educate the consumer on the definition of adaptogens. Key ingredients of their Brain Alchemy latte include:
    • Lion’s mane (mushroom) and guta kola (Chinese herb); both credited with increasing cognitive functioning

Project Juice utilizes the packaging of their beverages to educate the consumer on the definition of adaptogens.

Brain Dust by Moon Juice

A super-food powder blend created by the company Moon Juice. The name ‘Brain Dust” is described on its website as Edible Intelligence™, which efficiently and succinctly communicates its key benefit to the audience.

  • The product description, “an adaptogenic blend of super-herbs and super-mushrooms that help combat the effects of stress” gives the consumer a high-level understanding of the key cognitive benefit. Key ingredients include:
    • Rhodiola root extract, which is credited with increasing resistance to stress, and ashwagandha leaf extract, which is said to treat anxiety and stress

‘Brain Dust” is described as Edible Intelligence™, which efficiently and succinctly communicates its key benefit to the audience.

Tulsi Clarity Herbal Tonic by Goldthread

One of a variety of herbal tonics from Santa Monica-based Goldthread Herbs, I like how the company has named its concoctions by what mental state consumers can achieve upon consumption.

  • The description–Sweet and fragrant, with just a touch of spice, tulsi…has rejuvenating effects upon the body, mind and spirit”–also provides both education and approachability to the consumer. Key ingredients of Tulsi Clarity include:
    • Tulsi, an herb credited with reducing stress and increasing energy, and lavender extract which promotes calmness

Goldthread Herbs has named its concoctions by what mental state consumers can achieve upon consumption.

Just some Thought for Food™

 

1 “The New Convenience.” A.C.T. Food Culture Forecast 2018. The Hartman Group. April 2018.

The Dawn of Flexitarians

Last month, casual dining chain TGI Fridays announced it was adding a buzz-worthy option to its 465 nationwide locations: The Impossible Burger. Made from all natural ingredients like wheat, coconut oil and potatoes, this plant-based burger is unique in that it bleeds, smells and sizzles like a regular beef patty thanks to a naturally-occurring iron compound called heme.

The Impossible Burger is made from all natural ingredients like wheat, coconut oil and potatoes, but it has very unique characteristics.

With less than 2% of the U.S. population identifying as vegan, many industry skeptics wonder why TGI Fridays believes a plant-based burger will thrive on a traditionally carnivorous menu.

The answer: Flexitarians.

WHY IT’S HAPPENING

A 2017 consumer survey by the Nielsen Group found that 40% of U.S. consumers were incorporating more plant-based foods into their diets. Not fully vegetarian or vegan, but consciously limiting their consumption of meat and meat byproducts, these new eaters are called flexible vegetarians, or simply, Flexitarians.

In a separate 2017 survey by Mattson, nearly 30% of U.S. adults said they followed one of two Flexitarian eating styles: Somewhat Vegetarian and Mostly Vegetarian.

Source: “What You Need to Know About the Meteoric Rise in Flexitarian Eating.” Mattson. August 2017.

What’s driving the shift towards plant-based cuisine? Based on Mattson’s research, consumers are drawn to plant-centric cuisine for health & wellness benefits and environmental concerns.

The top reasons why consumers are shifting towards plant-centric cuisine center around health & wellness and environmental concerns.

Source: “What You Need to Know About the Meteoric Rise in Flexitarian Eating.” Mattson. August 2017.

WHAT WE THINK

Investing in plant-based innovations is important, but widespread consumer adoption is still a ways off.

There is a significant movement with consumers experimenting and adopting more plant-centric diets. But 85% of the U.S. population is still eating meat and meat byproducts. Food and beverage companies should continue to look for relevant plant-based innovation opportunities, but set realistic volume and sales goals based on current consumer adoption trends.

WHAT’S NEXT

It’s important to keep the following in mind when vetting potential plant-based innovations:

# 1: Consider at-home vs. away-from-home consumption

According to Mattson’s research, 67% of consumers are most likely to try plant-based cuisine in a home environment. Meaning trial is more likely to happen in the grocery aisle than at a restaurant.

  • 54% say they are most likely to try plant-based dishes at home
  • 13% say they are most likely to try plant-based dishes at a friend or family’s home
  • 33% say they are most likely to try plant based dishes away-from-home

# 2: Identify the need you intend to fulfill

For any plant-based product, the consumer needs must go beyond “I want a plant-based dish.” Is it intended to satisfy a craving for vegetable fare OR a craving for a traditional meat-based item made from plants? Is it meant to provide satiety and protein fulfillment OR the feeling of wellness associated with lighter, fresh ingredients? These answers will help craft your product narrative, and also help identify your target customer.

# 3: Know who your target customer is 

Not all plant-based innovations will appeal to plant-seeking consumers in the same way. Here we see a consumer test of two plant-based burger concepts with two different “likely customer” outcomes:

Black Bean Burger 

  • Satisfies a craving for a plant-forward burger experience
  • Most likely customers are Somewhat Vegetarians, Mostly Vegetarians, Vegetarians and Vegans

The Impossible Burger

  • Satisfies a craving for a beef-burger experience but made with plant-based ingredients
  • Most likely customers are Mostly Vegetarians, Vegetarians and Vegans

Source: “What You Need to Know About the Meteoric Rise in Flexitarian Eating.” Mattson. August 2017.

While True Omnivores may experiment with plant-based cuisine because of curiosity or a periodic craving, they shouldn’t be counted on to drive sales of plant-based innovations either at home or on the menu.

What does this all mean for TGI Fridays? Because their core menu is centered around traditional meat and meat byproducts, it could be a challenge to get vegetarian-leaning consumers in the door for just one item. After the initial excitement wears off, time will tell if their traditional (True Omnivore) customer-base can sustain the item long term.

New Year. New Options.

This week, millions of Americans renewed their gym memberships and promised 2018 will be the year they start eating healthier. Yet a committed subset of this group took their resolutions to the next level by enlisting the scientists at Habit to create personalized wellness and nutrition plans. 

A high-profile disruptor in the food-tech sector with the backing of Campbell’s Soup Co., Habit uses biological samples to identify genetic variants and biomarkers within a customer’s DNA to create a personalized nutrition profile and, in some areas, even deliver personalized meals based on their biological profile.

Example of a Habit personalized nutrition profile

The process isn’t for the faint of heart, as author and contributing writer at the Washington Post, Sophie Egan, found out the hard way. The $299 (plus shipping and handling) investment requires a DNA cheek swab, core measurements and the ingestion of a proprietary Habit Challenge™ Shake. But perhaps Egan’s most astute observation came toward the conclusion of her essay when she wrote:

“On the face of it, personalized nutrition makes sense. Many people feel that the existing national dietary guidance of one-size-fits-all has failed them.”

Unlike other diet/nutrition companies that promote the ability of users to customize their programs, Habit is unique in its promotion of nutrition personalization. And the latter is quickly becoming the new consumer expectation.

WHY IT’S HAPPENING

Personalization is the direct result of the consumer shift from Affluence to Influence. As Generation Z witnesses the true death of a majority at a conceptual level, mass fragmentation will make the idea of ‘majority’ irrelevant for both brands and marketers. As A.T. Kearney explains:

“Affluence Model consumers bought the fiction that ‘one size fits all.’ Alternatively, Influence Model shoppers believe ‘one size fits nobody–except possibly by accident.’ Societal fragmentation will be celebrated as personalization in the Influence Model.”

WHAT WE THINK

The desired result of personalization vs. customization is identical: a better customer experience. But the paths to get there are dramatically different.

  • Customization: Brands provide a single set of choices that consumers can adjust based on their preferences
  • Personalization: Brands curate choices already tailored to a consumer’s preferences based on previous behaviors/interactions

WHAT’S NEXT

To achieve true customer personalization, brands and marketers must leverage the power of customer data. Below are a few ways personalization will likely come to life in food and beverage marketing:

Loyalty Programs Get Personal

In a November 2017 consumer study, Restaurant Hospitality found that 59% of consumers said they would be more likely to participate in a loyalty program if rewards were customized to their prior purchases. For example, instead of offering a generic “Free Drink” reward, Starbucks could utilize consumer transaction data to instead offer this customer her most frequently ordered beverage: a grande salted caramel mocha with extra whip. 

Loyalty Program Email Evolution Sample

Consumer-Designed Food

Back in 2014, Barilla introduced the world to their 3D pasta printer, which could print unique shapes in under two minutes. Contests are held each year to come up with new designs and, as Saveur Magazine explains, the 3D software can sculpt forms that could never be made by hand or machine. As technology becomes more accessible, consumers could theoretically craft and print their designs for a truly personalized pasta experience at home.

Menu Recommendations

UFood Grill recently installed new ordering kiosks with facial recognition software at their Owings Mills, MD, location. Customers who opt-in for having their face scanned sync it with a credit card and the system begins tracking their orders. On the next visit, a quick scan by the kiosk can bring up past orders for quick ordering. Proponents of the technology say facial recognition, paired with data algorithms, will soon be able to serve up personalized food and beverage recommendations.

UFood Facial Recognition Kiosk

 

Don’t Just Cook. Cook Different.

In his September 2017 Harvard Business Review article, author Eddie Yoon grabbed the food industry’s attention with the headline “The Grocery Industry Confronts a New Problem: Only 10% of Americans Love Cooking.” In the opening paragraph, he asserts:

“Although many people don’t realize it yet, grocery shopping and cooking are in a long-term decline. They are shifting from a mass category, based on a daily activity to a niche activity, that a few people do only some of the time.”

Yoon contends there are three categories of consumers when it comes to cooking based on his research:

Consumer cooking attitudes

In an already challenging environment for grocery retailers and CPG companies, this new research felt like another kick in the gut.

Good thing Yoon got it (mostly) wrong.

WHY IT’S HAPPENING

In many ways, scratch cooking has transitioned from necessity to luxury. With competing demands for time and resources, a seemingly endless host of options–takeout, delivery, meal kits and retail prepared foods–allow consumers to forgo cooking on a regular basis.

But all this evidence ignores a key consumer need: the emotional connection we have when preparing and sharing a meal with loved ones. Consumer insights firm Iconoculture asserts that cooking hits on key consumer values important to all generations–particularly millennials: creativity, sharing, discovery and tradition.

What we’re seeing is not a dramatic decline in the desire to cook; but rather, the misalignment in the value of cooking versus the act of cooking.

WHAT WE THINK

As food and beverage manufacturers, we must embrace and celebrate how modern consumers really cook.

Apple was successful in revolutionizing the mobile tech world because they focused first on the customer’s need to communicate better, not the phone itself. What Yoon’s research illuminates is a truly unique business opportunity for food manufacturers and retailers–if we’re willing to think differently.  We should focus on the basic human desire to prepare and share a meal, letting go of rigid definitions of what cooking is and isn’t. Retail products, prepared foods, meal kits and foodservice aren’t competing channels; but rather, cooking tools that can be wielded in any combination to help modern consumers put a meal on the table.

WHAT’S NEXT

Traditional cooking will never completely go away; there are celebrations and occasions where scratch-cooking is expected and sought after. But for the other 360 days of the year, we can help consumers leverage both retail and foodservice solutions to prepare an easy meal without sacrificing freshness, quality or that coveted emotional connection.

Encourage Fake-It-From-Scratch

Iconoculture’s recent consumer research shows that even the youngest consumers know cooking is an important life skill. Encourage customers with even basic kitchen abilities and limited time to be a fake-it-from-scratch cook. Demonstrate how one or two prepared items and a few simple ingredients can create a delicious weeknight meal, like this 10-Minute-Taco-Tuesday recipe:

Pork Tacos with Mango Salsa and Lime-Cilantro Crema

Promote Cooking-Less Celebrations

One of the key instances where consumers want to cook is when they’re entertaining family and friends. And sharing food with people we love is what it’s all about. But hosting a dinner party is a daunting task.  I’m a huge fan of Kitchn’s 5 Rules For Hosting a Crappy Dinner Party (And Seeing Your Friends More Often), especially Rule #2:

The 5 Rules of a Crappy Dinner Party:

Ready to plan your own? Here’s how to do it:

  • No housework is to be done prior to guest’s arrival
  • The menu must be simple and doesn’t involve a special grocery trip
  • You must wear whatever you happen to have on
  • No hostess gifts allowed
  • You must act like you’re surprised when your friends or family just happen to show up at your door (optional)

This is an ideal opportunity to demonstrate how to use foodservice–especially delivery–along with ingredients already in the kitchen to craft a crowd-pleasing menu. 

And rather than focusing on traditional gatherings like housewarming or birthday parties, brands should encourage consumers to celebrate unconventional milestones like adopting a pet, paying off student loans or seasoning a newly purchased grill.

Questions, comments or want to learn more? Let's connect! weshouldtalk@jtmega.com

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