A ‘huge demographic shift’ means opportunity for fresh-cut

As they get older, become more established and enjoy increasing buying power, the millennial generation is getting a growing amount of attention from marketers.

At 80 million strong, according to the U.S. Census Bureau, the generation born between 1980 and 2000 is a major factor in what the Pew Research Center describes as “a huge demographic shift” in the U.S.

Safeway Fresh FoodsAccording to Gina Jones, the Produce Marketing Association’s director of research and value development, they represent 27 percent of the U.S. population – larger than the baby boom generation and three times the size of Gen-X.

They account for an estimated $1.3 trillion in annual consumer spending. And that’s only going up, according to a study titled, “Outlook on the Millennial Consumer 2014” recently released by the Hartman Group.

They’re independent minded. They’re ethnically diverse. And they’re less likely to be married; the Pew report says just 26 percent have spouses, as compared to 36 percent of Gen-Xers and 48 percent of Boomers when they were in that age group.

They tend to be well educated. About one-third have a four-year college degree

They’re socially aware – and social media aware. The Pew report describes them as “digital natives” – the only generation that grew up on social media and digital technology. They didn’t have to adapt. It’s second nature.

They care about food and where it comes from, though they’re not taken in by glitzy packaging but instead are attracted by compelling stories behind the products they buy.

“They want to find meaning behind the products,” said Chris Wada, director of marketing for Wada Farms in Idaho Falls, Idaho. With produce, that often means wanting to know about the growers and where foods come from, he added.

Unlike their predecessors, millennials don’t necessarily eat three meals a day. A report by The Kruse Co. says that 35 percent of the meals millennials eat aren’t really meals, but snacks.

“Instead of three meals, they’re eating six small meals,” said Amy Erianne, vice president of business development at the Safeway Group in Vineland, New Jersey, noting that her company’s snack products combining items like fresh-cut produce with cheese or dips are ideally suited for this niche.

And the Hartman Group study reports that about 12 percent of millennials are devout vegetarians, compared to 4 percent of Gen X’ers and 1 percent of baby boomers.

It all spells opportunity for marketers who are taking notice – and you can bet that those in the fresh-cut and fruit and vegetable industries are.

Reach Them Where They Live

John Eldredge is a strategy consultant for the Guiding Stars nutritional guidance program that assigns star ratings indicating the nutritional quality of foods in grocery stores and foodservice. The program is designed to make it easy for shoppers and patrons to see the nutritional values of foods at a glance before they buy.

Besides providing physical signage, Guiding Stars maintains an online database of more than 100,000 U.S. foods and 60,000-plus in Canada that can be easily accessed and searched for ingredients, nutritional facts, allergens and the like via mobile devices – just what you want if you’re trying to reach millennials, he said.

“We definitely see millennials more often getting information online before they even shop and using mobile devices when they are shopping,” Eldredge said.

Not only do they do the research, he said, but they share it with each other.

Social media is a key way that companies are reaching out to millennials.

“Social media is a big part of it,” said Erianne. “They’re very tech savvy … Snapchatting pictures of things that they like, or looking at food blogs, and using social media to be their food storytelling platform.”

As part of that, the transparency of a program like Guiding Stars is exactly the type of effort millennials are likely to gravitate toward.

“It’s the kind of program that fits well with millennial values,” Eldredge said.

Those would include placing importance on authenticity and honesty, said Eileen O’Leary, PMA research manager.

“It’s not surprising that they are skeptical of claims and don’t generally accept things at face value,” she said via email. “This mistrust and skepticism is fueled by the fact that they have more information available to them about companies, and food ingredients and the food supply.

“So transparency will continue to be a key variable to generating ‘a unique value’ for companies.”

What It Means for Produce

Fresh-cut processors who want to attract millennial buyers would do well to have short ingredient lists and transparent – and environmentally friendly – packaging, among other things.

“Fresh produce packaging should reflect the ways millennials evaluate products,” Jones said. “They are less responsive to traditional call-outs like calories and health claims and more focused on local, organic and issues pertaining to sustainability.”

They gravitate to foods and beverages that are made with “simple, real” ingredients, Jones added. And having grown up surrounded by global preparations and options, millennials like ethnic flavor profiles and regionally specific cuisines.

“The millennials are food savvy,” Erianne said. “They’re really looking for us to take something simple and clean, and asking us to be creative with flavor trends.”

For Safeway, which has a fresh-cut processing facility and does a lot of volume in snack packs, that means coming up with products that capitalize on the sensory experience.

“They were raised on more diverse ethnic foods,” Erianne said. “We have to … put that twist on it.

“We’re adding Sriracha (a hot chili sauce), or putting something salty and sweet together.”

Safeway is also introducing snacks aimed at more sophisticated palates, including one that combines a pear with Gouda cheese and roasted almonds.

Unlike their parents, millennials tend to shop for just a few days at a time.

“Typically, they’re buying meals for that night’s dinner,” Wada said.

They don’t necessarily like planning, and are more likely to purchase on the spur of the moment.

“This generation makes a lot of last-minute decisions about what they eat because planning creates stress and is not fun,” Jones said.

At the same time, O’Leary added, millennials may consider cooking to be fun, but their on-the-go lifestyles often leave them short on time to cook.

“So this interest in cooking combined with their lack of time, their strong sense of adventure and passion for global flavors, presents fresh produce companies with an opportunity to deliver products and recipes that will help them explore new cuisines in their own kitchens, while providing the convenience they need for spontaneous meal preparation,” she said.

Wada responded to exactly those factors by introducing a new Smalls Artisan Mini Potato line. The 1.25-pound package of bite-size red or gold potatoes is designed for quick cooking and to yield just the right amount for a small household. That means less waste, another factor important to millennials.

Erianne said Safeway Fresh Foods’ fully prepared microwaveable vegetable line – simply seasoned with sea salt, cracked pepper and olive oil – also aims at this market.

The millennial generation is also open to trying new products – a fact that should not be lost on marketers, said Wada, who at 34 is a millennial himself.

“There are so many food options out there,” he said. “We want and need to explore new things.

“You don’t need to sell me. Just tell me at the core, what this product is and what makes it different.”

—  By Kathy Gibbons, contributing writer



Be sure to check out our other specialty agriculture brands

Organic Grower