Gen Y an untapped multi-billion dollar opportunity for CPG sector
Millennials – or Generation Y – are one of the largest demographics in the world and will soon be entering a strong growth period in both income and consumer packaged goods (CPG) spending. However, this generation is not a typical consumer group and taking advantage of the emerging multi-billion opportunity presents significant challenges.
The latest research from American-based IRI, “Winning with Millennial Women Shoppers,” highlights key Millennial-driven U.S. growth markets, and provides insights into which channels and categories are well positioned to benefit from future shifts. It discovers a US$54.3 billion opportunity in the States alone.
“Future CPG spending growth from Millenials, driven by women shoppers, will be a major source of new sales growth for retailers and manufacturers, who are continuing to compete in a volatile economic environment,” according to KK Davey, Executive Vice President of IRI Consulting & Innovation. “This consumer group is even larger and more diverse than Generation X, and they are on the brink of experiencing a broad range of lifestyle changes, such as first home purchases, marriage, parenthood, career development and larger incomes.”
Retail Channel and Category InsightsWhen compared with older shopper groups, Millennial households shop less often, spend more per trip, and do a greater share of their CPG spending at larger outlets. When under budget constraints due to the economy, Millennials pulled back spending in many indulgent and convenience food categories, including frozen poultry, chewing gum, salty snacks and frozen pizza, the researchers advise.
Millennial non-food spending is similar to Generation X households. At a category level, hair care, suntan products and household cleaner cloths are among several categories that have potential for strong growth, since consumption in many non-food categories peak for shoppers in their 40s when their household size peaks.
Today, 70 per cent of Millennials agree that store brands are typically of excellent quality. Surprisingly, Millennials attitudes and actual purchases of private label brands is roughly on par with older shoppers, which refutes the conventional wisdom that private label acceptance takes a long time to evolve for a given consumer.
IRI contends that this private label acceptance also illustrates that many branded manufacturers are falling short in their efforts to build their brands with Millennials through traditional media, such as TV, radio and print. These traditional approaches are not nearly as influential or as effective for Millennials as it was with previous generations. Manufacturers will need to explore other non-traditional methods to reach this group.
Health & Wellness Dynamics
Compared with women in their 30s and 40s, Millennial women report an even stronger need for retailers to serve as better partners to support healthier diets and lifestyles. Weight-related issues dominate their concerns, with nearly half of Millennial women thinking the may not have a healthy weight.
Millennial women are motivated to “shop for health,” but they believe that finding healthier foods at retail is a challenge. They agree that a variety of healthy food products exist in stores but think that retailers can still do more in terms of in-store merchandising and messaging designed to navigate shoppers to healthier options.
Across meals-focused categories, Millennials are looking for healthier options in bread, cereal, vegetables and cheese categories. Granola/cereal bars, yogurt and cracker options top the ‘better-for-you’ snacking category, while indulgences, such as confectionery, biscuits and ice cream, are less of a concern. Less emphasis is placed on finding healthy options in beverages.
Loyalty and Shopper Satisfaction
Compared with other segments, Millennial women spend less time and effort planning their shopping trips and make less use of ad circulars and coupons. IRI also uncovered that most women are still making impulse purchases and only a small number have a set grocery budget.
When selecting their primary grocery store, Millennials place high importance on the store’s value proposition, location, user-friendly layout and variety. Less importance is placed on checkout service and loyalty cards. They are also less concerned with perimeter departments, such as fresh produce and fresh meat, which tend to become more important factors as shoppers age, the researchers concluded.
There are some serious lessons to be learnt for businesses in the food industry when examining a uni...
A group of UK health and nutrition professionals have criticised the idea that fat should be avoided...
An investigation by the World Health Organisation (WHO) and the International Agency for Research on...
The New Zealand Heart Foundation is following in the steps of its Australian counterparts, deciding ...
A new piece of technology is allowing nursing mothers to easily monitor their baby’s feeding pattern...
There could soon be much more quinoa thanks to an Australian-led scientific breakthrough.
The world’s most admired food companies have been announced for 2017.
A pair of US professors in food science and nutrition have warned consumers may not realise the poss...