Category: Millennials

Talkin’ ‘bout our (next) generation.

Written By: Anna Braun

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.

Don’t Just Cook. Cook Different.

Written By: Ashley Kile

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.

Private Label is in the Public Eye

Written By: Ashley Kile

The Brandless Company Model

Calling itself the “Procter & Gamble for Millennials,” San Francisco e-commerce company Brandless™ made its U.S. debut this past July eager to disrupt the CPG industry. The startup, which has secured over $50 million in funding, sells a variety of organic food and home goods all for an everyday low price of $3.

Brandless™ says it’s able to keep its prices low by eliminating the BrandTax, a moniker the company hopes to trademark and defines as the “hidden costs you pay for a national brand.”

Aldi's Award Winning RoséAt the 33rd annual International Wine Competition in United Kingdom, The Exquisite Collection Cotes de Provence Rosé 2016 won a silver medal. Judges gave the wine top honors after two weeks of blind taste testing, describing its flavor as “ripe summer stone fruits with a generous acid palate and crisp bright finish.”

But what surprised judges–and wine spectators–the most wasn’t its $8 price point or French origin. It was that the wine belonged to Aldi’s.

WHY IT’S HAPPENING

In its August 2017 Private Label Report, IRI reports that 49% of consumers say they are making sacrifices to make ends meet, with 29% reporting difficulties in affording groceries.

Consumers in all income and generation groups report buying private label

Consumers are embracing a variety of money-saving strategies to cut down on household costs, but opting for private labels is common across all generations and income brackets.

The cause is twofold:

  1. Despite the creation of two million jobs in 2016, which brought unemployment to 4.5%, wage growth has been stuck at 2.5%[1] for the past two years. It’s hitting younger consumers the hardest. On average, full-time, year-round working millennials are earning nearly $12,000 less per year than the national average for workers age 35–65.[2]
  2. Private label has, in many instances, managed to bridge the quality gap with national brands. With a focus on premium and even super-premium tiered items (all natural, organic, non-GMO, etc.) private labels are delivering a better product experience to customers.

WHAT WE THINK

The value proposition of national brands vs. private label is being aggressively questioned by today’s savvy consumer.

As private label brands have improved their quality and consumers are finding themselves with less discretionary income, shoppers are questioning if national brands are really worth the extra cost.

WHAT’S NEXT

To stave off private label encroachment, national brands must do a better job of demonstrating why their products are worth the extra investment.

Deliver on both sides of the equation

The majority of national brands built their reputation–and consumer preference–on signature product formulations that taste great, perform reliably and consistently deliver a high-quality experience again and again. And that used to be enough. But today’s consumer also wants more transparency with shorter, cleaner ingredient statements. Private labels often struggle to successfully deliver on both sides of this value equation. If national brands can consistently deliver an exceptional product experience while making it with cleaner ingredients, consumers will pay the extra cost.

Focus on customer engagement

Younger customers, particularly millennials, want more from brands than just a high-quality, good-tasting product. It’s about what else that brand brings to the table to enrich their lives. Advertising, event activation and social media strategies can bring the value-beyond-product story to life through personal connections.

Be purposeful with price promotions

While strategic price promotions are important in driving incremental purchases, long-term discounts undermine the value of a brand. They also position your brand as competing directly with a retailer’s own brand.

Invest in strategic retailer programs

Unlike private labels, which traditionally have very low marketing funds, national brands possess highly coveted marketing and advertising dollars. As traditional retailers face ever-increasing competition from non-traditional players like Amazon and Brandless™, national brands investing in ad campaigns—that drive customer visits and higher basket rings—are incredibly valuable.

[1] “Why Wage Growth is Too Slow and What To Do About It.” Washington Post. September 1, 2017.
[2] “Here’s How Much Millennials Are Making in One Chart.” Fortune Magazine. March 29, 2017.

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

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