KANSAS CITY, MISSOURI, U.S. — By the year 2020, the retail landscape will undoubtedly change. But despite the myriad ways trends could shift, according to Nielsen research, one thing will become increasingly salient for retailers: They must pay attention to millennials.
Not only does this generation account for about one-quarter of the U.S. population, its buying power will grow as these consumers get older. As millennials mature into a main consumer group, retailers will need to account for their needs, buying preferences, changing geographic locations and increasing spending power.
U.S. consumer spending will reach $5.7 billion by 2020 for retail and on-premise eating and drinking locations, according to Nielsen.
Millennials will be on the move by 2020 — both with their home locations and their busy schedules. Many millennials seem poised to make a move in the near term. In fact, only 25% of millennial respondents to a 2015 Nielsen survey said they plan to live in the same area they live in now over the next five years. That means 75% of up-and-coming spenders plan to relocate, mainly to large cities and college towns.
As the generation ages, millennials likely will seek refuge in the suburbs with homes of their own. The Demand Institute’s “Tale of 2,000 Cities” study forecasts home prices in the large metropolitan areas could increase up to 33% above 2012 prices. This increase in home value likely will be driven by millennials as they seek to put down roots.
To market to these rapidly growing areas, retailers and manufacturers will also need to focus on future food consumption habits. For example, it may seem like restaurants have cornered the out-of-home food game, but grocery stores are already beginning to respond to this trend with their own offering — the “grocerant.” Offering more than just the typical hot and salad bar, grocerants span the dining gambit, featuring everything from prepared meals to eat-on-the-go to in-store dining with a particular ethnic food slant.
According to the Food Marketing Institute’s 2015 Grocery Shopper Trend Study, 34% of survey respondents find retail grab-and-go even easier than going to a restaurant.
Millennials are the shining stars of today’s marketplace, but when it comes to snacking — which is all the rage in the food industry — it’s boomers who shine, according to new research from The NPD Group. Boomers eat ready-to-eat snack food 20% more often than millennials do, according to NPD’s daily tracking of U.S. consumers snacking habits.
While millennials overtook boomers in population number in 2015, both generational groups are large, and it’s the size of the prize that appeals to food retailers. In terms of snack consumption, the size of the prize is substantial.
Based on NPD’s snacking research, annual consumptions of ready-to-eat snacks per boomer are about 1,200, or a total of 90.4 billion, and there are about 1,000 snack consumptions for each millennial, or a total of 83.1 billion.
The reasons why each of these generational groups snacks are as different as their ages.
Both groups choose snacks based on taste and craving.
Millennials are aligned when it comes to the types of ready-to-eat snack foods consumed.
Fruit, chocolate candy/candy bars, and potato chips rank as the top three snack picks for both.
Although boomers hold the top score over millennials in ready-to-eat snack food consumptions, they don’t come close to children when it comes to the amount of snack foods consumed.
Children ages 2-17 consume an average of 1,500 snack foods per year, an above average amount compared to other age groups. Healthier snack foods rank highest with children, particularly with 2 to 5-year-olds, ages where parents primarily control what they’re eating.
“Our snacking research shows us that all snackers are not alike,” said Darren Seifer, food and beverage industry analyst for The NPD Group and author of the company’s Snacking in America study. “Motivations, snack food choice and when and where to snack differ among age groups. Everyone gets it that, as a nation, we like snack foods, but the key for food manufacturers is to find the nuances in snacking behaviors in order to differentiate a brand or find a white space opportunity.”