If you’re tired of hearing about millennials, I can’t say I blame you. A new millennial-related report, study or news item seems to come out on a daily basis. (I’m sure the Greatest Generation felt the same way about all of the baby boomer coverage way back when!)
Still, it’s critical for consumer packaged goods (CPG) companies — including dairy processors — to sift through all of the millennial-related noise and grab on to some key insights. Why? Because millennials now account for one-fourth of the U.S. population and bring with them $10 trillion in lifetime buying power, noted Lori Colman, co-CEO of Chicago-based CBD Marketing.
A significant portion of dairy processors’ new product development efforts, therefore, should be targeted to this powerful demographic. But what, exactly, do millennials want?
According to “Those Maddening, Marvelous Millennials: Trends and Preferences in the Food, Beverage and Supplement Categories,” a new report from CBD Marketing, they gravitate toward natural, healthful food; cultural flavors and foods such as Scandinavian and Indian; and better-for-you drinks that promote energy, immunity and digestive help. What’s more, millennials want to prep and cook their own meals, and they support alternative food distribution via meal delivery and meal services.
What don’t they want? Fat-free foods and other foods tied to dieting; soda pop; and fruit juices such as apple, cranberry and orange. In addition, although millennials love smoothies — a big positive for dairy processors — they aren’t so keen on plain old dairy milk or plain old coffee.
Millennials are also big buyers of organic food and beverages, according to a new study from the Washington, D.C.-headquartered Organic Trade Association (OTC). And as more millennials have children — 80% of them will be parents within the next 10 to 15 years, OTC projects — the demographic’s strong affinity for organic is expected only to deepen.
Millennials’ gravitation to organic goes hand in hand with another trend taking place within the food and beverage sector across demographics. That trend is the rise of the socially conscious consumer, and it is being driven by millennials as well. (According to CBD Marketing, millennials want transparency and want to buy from environmentally conscious manufacturers and purveyors.)
In its September “2017 Top Trends in Fresh Foods” Point of View, Chicago-based market research firm Information Resources Inc. (IRI) notes that for many consumers, the definition of food and beverage quality now goes beyond the ingredient list and packaging.
“Shoppers have become familiar with food labels such as ‘organic,’ ‘non-GMO’ and ‘antibiotic-free,’ and based on the fast-growing sales over the past five years, these attributes are very important to shopping decisions,” IRI said.
But the next wave of growth, IRI predicts based on research, will center on companies going above and beyond product attributes.
“Overall business strategies will have to integrate important, emerging cultural values into business operations — and they will have to abide by intensifying expectations from both consumers and the industry overall,” IRI stated. “People want transparency from the brands and companies they choose to support; they seek information and validation of their choices; and often this leads to emotional connections in very powerful ways.”
So moving forward, how could dairy processors better meet the needs of millennials? In addition to launching more organic items and “peeling back the layers” to give millennials the transparency they desire, they might want to invest in new product development that goes beyond just the dairy category. For example, they could marry millennial-desirable ingredients such as green tea, cold brew coffee or immunity boosters with traditional dairy milk. They also might want to situate certain dairy products as components in home-prepped meals.
But above all, they should continue to pay attention to the wants and needs of this critically important mega-demographic via a number of communication avenues, including social media.
“Millennials share their opinions and buying habits online via social media platforms and on other sites,” Colman stated. “Businesses and brands that mine this treasure trove of online data will be the ones that market their products successfully.”