Prepared Foods a Gateway to Millennials
Change continues to come hard and fast in retail.
Consider what’s ahead, for instance: Smaller store formats. A shift towards urban sites. Better use of analytics. More influential Millennials. Omni-channel shopping. Blurred lines between eating in and eating out.
A new report from Acosta examines some of these trends through the lens of industry research by others, as well as its own consumer study (2,025 respondents) - to help explain underlying drivers and to estimate the extent of potential change in the near future. Strategize to these shifts in food buying, states Acosta’s The Why Behind The Buy 9th Edition:
- By 2020, Millennials will outspend Boomers, and more than $65 billion in yearly grocery spend will move from Boomers to Millennials – “for whom technology is innate, brand loyalty is elusive, and personal choice is a mantra” as they reach their highest spending years.
- Millennials already buy prepared foods and meals at the supermarket – but crave a more “enticing, upbeat, healthier, fresher, engaging experience in-store with digital seamlessly integrated,” because they take the time to understand benefit claims and reward design. Supermarkets should satisfy the way they eat at home - busier lifestyles (less time to fuss), a broader ethnic palate, instant gratification. Within the 30 days prior to being surveyed, 78% of Millennials/Gen Yers brought home prepared foods – vs. 68% of Gen Xers, 60% of Boomers and 57% of the elderly.
- 27% of shoppers go to the supermarket with the sole intent to pick up a prepared meal – and this trend is growing, says AlixPartners. Households averaged 3.9 ‘away from home’ meals per month at the end of 2013 vs. 5.8 at the start of 2013.
- The 10 highest ‘walk rate’ categories (% of shoppers who’d delay purchase or shop elsewhere if they encounter an out-of-stock) are: skin care (45%), baby food/formula (44%), vitamins and supplements (44%), pet food (43%) carbonated soft drinks (41%), ground/whole bean coffee (38%), sports/energy drinks (37%), antiperspirant/deodorant (36%), shampoo/conditioner (36%) and laundry care (35%), the Acosta data show.
Meanwhile, retailers eye higher yields per square foot from smaller urban sites amid dense populations of residents and workers in the area, says The Lempert Report. Two differences help them shoehorn smaller formats: less need for parking spaces and footage to hold inventory, due to the rise in online shopping.