This demographic represents a growing opportunity for grocers.
By Richard J. George, Ph.D.
Age, lifestyle and life stage all influence food retail attitudes and behaviors. Age demographics are most easily understood in the context of generations, which combine collective traits or behaviors that exist among people of each age group.
Generation Y can be roughly defined as the group of individuals born between the years 1977 and 1994 (16 to 33 years of age). Called by several different names—Millennials, the Digital Generation and Echo Boomers—this generation is one that is quickly establishing a strong identity as a consumer in today’s ever-changing marketplace. This is the largest generation (80 million) with an estimated spending power of $625 billion.
Generation Y represents the largest population bulge since the baby boomers. It is also the most ethnically diverse generation in the U.S., with 38% identifying themselves as non-white.
Recently, I conducted a national research project focusing on the older members of Generation Y (hereafter referred to as the Mature Millennials; 23 to 33 years of age).
Mature Millennials represent a number of significant opportunities as well as potential threats to food retailers. While better than nine out ten of the Mature Millennials regularly eat lunch or dinner, one-quarter of all Mature Millennials don’t regularly eat breakfast. Even fewer eat breakfast on weekends. However, the group strongly believes that they should eat a healthy breakfast each day. Since more than 85% of this generation source breakfast from grocery stores or supermarkets, stimulating primary demand for breakfast could translate into real breakfast sales growth.
Given that more than four out of five of the Mature Millennials in this survey work outside the home (full- or part-time), the efforts by food retailers to attract additional lunch business particularly during the workweek may not be cost-effective. However, dinner is another story. Monday through Thursday represent an opportunity to take share from food service. Almost 30% of this group sources dinner from food service. A featured and promoted, fully or easily prepared meal from a grocery store or supermarket would not only increase basket size and margin, it could also increase food retailing visits.
A potential opportunity or threat for traditional food retailers comes from Internet/online food shopping. While only 4% of older shoppers purchase groceries online (U.S. Grocery Shopper Trends, FMI 2009), almost 15% of Mature Millennials have shopped for groceries online in the past 30 days. If these younger consumers are shopping on Amazon.com, this represents real lost business for the traditional food retailer. Even if the online food shopping is conducted via a supermarket website, this takes visits out of the store. This issue needs to be addressed regardless of shopper age, but especially so for the Mature Millennials.
Although this generation primarily uses social networks for their intended purpose—to stay connected with family and friends—their professional uses represent a real opportunity for food retailers. Food retailers can use these websites to recruit the best and brightest. Mature Millennials are using these sites to find information about various products and services and the companies behind them.
When it comes to lifestyles, Mature Millennials represent a potential gold mine for food retailers. Over half of this group visits a supermarket at least twice a week and almost one-quarter visit three or more times per week. In addition, this group highly values lifestyles that are conducive to behaviors that support grocery shopping. They strongly agree that cooking meals at home is a good way to live, that it is important to eat healthy these days and pay attention to nutrition, that they should eat a healthy breakfast each day, that they enjoy cooking and plan dinners that will be prepared at home ahead of time.
In summary, Mature Millennials may eventually behave like their parents and older consumers. However, at this stage of their life, their attitudes and lifestyles are sufficiently unique to suggest that the development of specific marketing strategies and tactics by food retailers that will capture a greater share of their total food needs. Their sheer numbers represent untapped potential if we can get them to perceive “your supermarket as their supermarket.”
Richard J. George, Ph.D., is professor of food marketing, Gerald E. Peck fellow at the Haub School of Business at Philadelphia-based Saint Joseph’s University.