Understanding the millennial mindset

Feb. 12, 2018 – by Charlotte Atchley, Nico Roesler and Anna Wiber

While millennial consumers are looking for fresher and healthier foods, these shoppers aren’t all the same.

KANSAS CITY — Millennials as a generation are a force to be reckoned with. With 83.1 million people in the United States classified as millennials by the U.S. Census Bureau, this generation makes up a fourth of the country’s population. By 2018, the projected income of millennials will be about $3.39 trillion annually, blowing past baby boomers.

“They’re not all broke, unemployed and living in their parent’s basement collecting participation trophies,” said Jeff Fromm, co-author of Marketing to Millennials and partner at Kansas City, Mo.-based advertising agency Barkley. “They’re starting families. Many of the trends we see start from more affluent millennials.”

Despite this power, millennials can be picky about how they spend their money. Saddled with student debt and coming of age during a recession, millennials want their purchases to reflect their values. They have equated dollars with democracy … and vote with the almighty dollar.

Millennials want something for their money — not just calories to fill bellies. Cost and ingredients are the top factors cited for purchasing bakery products, according to Innova Market Research’s survey of younger millennial (18 to 25) buying habits.

“We know millennials are looking for a healthier brand, but we also know from our research that they tend to be the most price-conscious consumers out there, so the key to the millennial shopping behavior is value,” said Jacque Taylor, director of marketing for Lehi Valley Trading Co., at NACS Show 2017. “They want a healthier snack brand, but they also want it at a value price.”

Millennials also want to support companies that reflect their own values: companies that are giving back to the environment and/or communities and those supporting an ethical supply chain. After analyzing 8.6 million online posts and comments by millennials over the course of a year, CBD Marketing found that millennials want to buy from manufacturers that are environmentally conscious and transparent about their ingredients, process and business. This is how companies gain brand loyalty from a generation marked by skepticism and motivated by price.

Know Allergies produces non-G.M.O., natural bars that are free from the top allergens including peanuts, tree nuts, milk and eggs.

Millennials are looking for healthy food, which they often equate to simple ingredients they recognize, non-G.M.O. and organic.

“Millennials don’t want all the bad stuff added,” said Amos Bartlett, 27-year-old founder and president of Know Allergies, producer of non-G.M.O., natural bars that are free from the top allergens including peanuts, tree nuts, milk and eggs. “We want it all taken away. We’re sick of preservatives; we’re sick of fake things. We want real food.”

Sixty-four per cent of millennials prefer snacks with fewer ingredients, according to a study by the Center for Generational Kinetics, and 79% said being able to understand everything on the ingredient list boosted their trust in packaged snacks. Millennials are more likely than baby boomers to say they worry about potentially harmful ingredients in the food they buy, according to Mintel.

The packaging for Nature’s Own Life communicates each variety’s attributes at a glance.

Revamping the bread aisle

The rise of healthier and on-the-go food options has not fared well for bread makers, especially when it comes to millennials. They live in a time when their busy lives are romanticized on Snapchat and where their diet can be a core part of their identity. In millennials’ minds, purchasing bread doesn’t align with their lifestyle unless they are dining out. For them, it has become an inconvenient product with few health benefits compared to other available items.

Packaged bread sales have increased only 6% between 2011 and 2016 to $25 billion — sales declined by 1% when adjusted for inflation, according to the report “Packaged Bread — US — July 2016” by Mintel. Sales of loaf bread, the category’s largest segment, have been weak as well. This may signify that some consumers are cutting back on bread and gravitating toward options they perceive to be healthier.

“Millennials are more health-focused than previous generations have been and are looking for more health-functional ingredients in their food,” said Craig Slatvcheff, vice-president of global R.&D. for global biscuits and snacks at the Campbell Soup Co.. “For example, Pepperidge Farm recently introduced sprouted grains into one of its breads, which is on-trend with millennials right now.”

Pepperidge Farm recently added sprouted grains into one of its breads.

Educating millennials on the health benefits will also continue to play a crucial role. However, companies should use channels associated with authenticity such as social media influencers rather than more traditional routes.

The convenience factor is also playing a part in declining bread sales among millennials. The toppings and fillings that accompany bread and the limited availability of single-portion or individually wrapped options make it problematic, according to Mintel’s “Companies & Markets March 2017” report. Offering more ­individually wrapped items with on-trend inclusions or smaller loaves of bread could bring more appeal to this item.

Innovation and education will play a large part in resurrecting millennials’ love of bread products. From ­protein-packed slices to smaller portions, plenty of opportunities are available for bakers to capitalize on. Nature’s Own, a business unit of Flowers Foods, Inc., developed its Life line of breads to address consumer health needs. The range includes breads such as Wheat+Protein, Sprouted Grains, Double Fiber Wheat, 40 Calories Honey Wheat, 40 Calories Wheat and 100% Whole Grain Sugar Free.

Nature’s Own Life breads were created to address consumer health needs.

Many bakeries outside the U.S. offer smaller loaves that may appeal to the casual bread eater. Kingsmill Bakery produces multiple varieties of its Half Loaf, which contains 12 slices, while Productos Ramos S.A.’s Pan Blanco is available in four-slice packages.

Bakers should look outside of the category and research larger societal trends to tap into, Mr. Fromm said. Observe trends in industries such as technology or fitness and see how they can be applied to bakery products. For example, an array of customizable and hyper-convenient products are available within the tech industry that bakers may utilize. By looking outside the baking sector, manufacturers may be able to find ways to overcome stigmas attached to bread and reinterpret it for eating occasions that appeal to a millennial’s lifestyle.

Lehi Valley Trading Co. conducted extensive research on millennial purchasing behaviors prior to developing its Snackworthy line of healthy value snacking options.

Snack back to reality

There may not be a clearer influence of millennials in food than in snacking. This generation is rewriting the rules on mealtimes and snacking.

The global savory snacks market is expected to reach $175.85 billion by 2021, with a CAGR of more than 5%, according to Technomic’s most recent “Snacking Occasion Consumer Trend Report.”  Snacking has been on the rise for several years, but the past two years have marked a particularly notable growth, with 83% of consumers saying they snack daily compared with 76% in 2014.

Consumers are demanding flexibility in eating options, according to Euromonitor International’s report, “How We Eat: The Changing Face of Global Mealtimes,” and they increasingly demand enhanced food quality that delivers on excitement, experience, ethics, indulgence, value and health.

As lifestyles evolve, snacks are no longer confined to confectionery or potato-based products but are more likely to include yogurt, meat snacks and vegetables. Replacing meals with more well-rounded snacks means people can skip meals and, in theory, save time. The nutritional benefits of staple foods like protein and fiber are now widely found in snacks. Sixty per cent of consumers want additional health benefits beyond the food’s inherent nutrition, according to 2017 I.R.I. data.

Lehi Valley Trading Co. conducted extensive research on millennial purchasing behaviors prior to developing Snackworthy, a new line of healthy value snacking options. The company found that 87% of millennials seek and expect healthier options when purchasing value snacks, 30% of millennials are more likely to trade down to cheaper brands and 81% liked the concept of a value brand offering only better-for-you items.

As snacks fill the void between meals, manufacturers must consider more than just nutritional needs when developing products. And taste remains king in snacking.

“Millennials care a lot more about what they’re putting in their bodies,” Mr. Bartlett said. “The problem is they don’t want to sacrifice taste. There are so many innovations happening in food that are allowing us to come up with less processed ways of doing things that still taste good. That’s the key — it has to taste good.”