- High-profile panelists at this week’s American Bakers Convention noted consumer food preferences, led by millennials, are rapidly evolving and presenting a host opportunities as well as challenges to manufacturers, according to Food Business News.
- Consumers are sharing their experiences through social media and blogs, noted Cyrille Filott, global strategist for consumer food at Rabobank. In the U.K., millennial consumers photograph 20% of the food they eat and 1.6 million moms blog about food.
- Danielle Gould, founder and CEO of Food+Tech Connect, noted smaller companies are stealing market share from larger CPGs. The past five years have seen the top twenty-five manufacturers lose $18 billion in market share.
Just about every company in the food industry is eager to please millennial shoppers. But in many instances, the harder retailers and manufacturers try to appeal to this coveted demographic, the more elusive these shoppers become.
Large CPG companies have struggled to reach younger shoppers. As one presenter at the American Bakers Convention noted, America’s top 25 food companies have lost $18 billion in market share during the past five years while small and mid-sized manufacturers accounted for 46% of industry growth in that time, according to IRI data.
This certainly isn’t for lack of trying. Companies such as Kellogg, Campbell, Nestle and Unilever have reformulated many of their legacy products and introduced line extensions that incorporate trendy ingredients. They’ve also been busy buying up smaller brands that hit on all the attributes millennials value, like health, freshness and transparency. Executives with General Mills and J.M. Smucker told Food Dive last month it's challenging for their businesses to address rapidly changing consumer tastes and preferences, but when they get it right it can be a lucrative opportunity for sales growth.
But oftentimes, as with Campbell’s recent struggles involving its Bolthouse Farms and Garden Fresh Gourmet brands, these moves can fail to gain traction. Distrust of big food companies plays a big role, but so do execution problems like inefficient sourcing and distribution. Fresh, flavor-forward products present added variables that can challenge companies using a one-size-fits-all sourcing strategy.
Execution issues are inevitable, but they can be hammered out over time. Deciding what products to make, or acquire, and how to market them requires creative new approaches and better research.
According to experts interviewed by Food Dive, one trap many companies fall into is assuming millennials are one monolithic group that shares the same habits and preferences. The truth is millennials cover an age range of more than fifteen years. On the younger end are young twenty-somethings who are just starting out in the professional world, are typically single and looking for new, experimental shopping experiences. On the older end are thirty-somethings who are more established in their professional lives, are starting families and looking for convenience and reliability in their shopping choices.
Large companies also tend to be reactive versus proactive in reaching younger shoppers. They develop products that seem to hit on key values, then splash key words like “fresh” and “natural” all over their packaging without thinking about why consumers prize these attributes. Millennials don’t just buy fresh for the sake of buying fresh — they do so for a heady brew of reasons that incorporate taste, health, nostalgia, and simply being able to recognize and understand the food they’re eating.
Investigating millennial preferences is difficult, particularly for very large, very deliberate companies. As The Hartman Group, a market research firm focused on food culture, has noted: “[Millennials] are complex and full of contradictions — contradictions they are fully aware of and embrace.”
To that end, companies might consider reverse mentoring. Rather than pour over studies, sales numbers and other results-driven data, food executives should join millennial shoppers on their trips to the supermarket. What do they buy? How do they shop the store? Be an observer, and prepare to be surprised. Ask them why they purchase what they do, and then listen.