• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Millennials' Grocery Consumption Patterns to Vastly Affect Food, Beverage Industry, Study Finds

Millennials' Grocery Consumption Patterns to Vastly Affect Food, Beverage Industry, Study Finds

July 3, 2012
AlixPartners

So says Trouble in Aisle 5, a study of 2,000 consumers conducted in May by Jefferies, a global investment bank, and AlixPartners, a global business advisory firm.

The root cause of the impending transformation lies in changing demographics. Over the next decade the baton will be passed from one mega-generation to another as "millennials" (born between 1982 and 2001) come of age and "baby boomers" (born between 1946 and 1964) enter the next phase of their lives and spending patterns. As a result, established food brands and traditional grocery stores will be pressured at both ends by sets of consumers with very different value equations.

"We envision an environment that will require increased nimbleness and a relentless focus on the consumer for established food manufacturers and retailers, and the potential for rapid growth for new concepts and products," said David Garfield, managing director at AlixPartners and head of the firm's Consumer Products Practice.

"Millennials clearly present significant challenges, and food-makers and traditional grocery retailers need to start making changes now to address the emerging needs of this demographic group, as in many ways we're just in the second inning of this ball game" said Scott Mushkin, managing director and senior equity research analyst covering Food & Drug Retailing and Packaged Food at Jefferies.

Changing Demographics

Based on the most recent projections by the U.S. Census Bureau, millennials over the age of 25 (the age at which income and household formation typically start to really accelerate) will make up roughly 19 percent of the U.S. population by 2020, up from just over 5 percent in 2010. These 64 million millennials will see a significant spending-power increase in the coming years as the median income for those households is expected to jump to more than $45,000 from just over $28,000. In fact, the study finds, food-at-home spending by Millennials is set to jump by $50bn annually through 2020.

By contrast, the baby boomer generation, which has had an outsized influence on consumer trends for decades, will fall to below 20 percent of the population in the next eight years.

Baby boomers are also set to move out of their peak-earnings years into retirement and will be more reliant on fixed incomes by 2016, and their focus will undoubtedly turn further toward lifestyle preservation. Overall, says the study, at-home food spending by boomers could fall by as much as $15bn per year through 2020.

Millennials: Convenience is King, Loyalty is Fleeting

The study found that millennials have strikingly different attitudes towards consumption than their baby boomer parents and grandparents, which will put great pressure on the traditional model of homogeneous brands provided by traditional grocery retailers.

"The at-home food industry is just beginning to feel the impact of this major demographic shift as millennials rise in prominence and baby boomers adjust to meet the requirements of age and a fixed income," said Mushkin. "The bottom line for food-at-home industry stalwarts is that big changes are coming, and companies who don't fully understand those changes risk being marginalized."

"Convenience is king with Millennials - they expect to get what they want, when and where they want it, and they know they have options for both products and retailers. The emphasis on convenience represents a dramatic shift from baby boomers' priorities, and it also presents big challenges - and opportunities - for companies in the food industry," said Garfield.

Tied to the group's focus on convenience, millennials are much less loyal to both food brands and traditional grocery stores and much more willing to explore different distribution models (online shopping, smartphone shopping, delivery services, etc.) and spread their shopping across different brands and channels (mass merchants, club stores, drug stores, convenience stores, online, etc.) to fulfill their consumable needs. Of the millennials surveyed, 47 percent stated brands were "extremely" or "somewhat" important in their purchasing decision for groceries, compared to 61 percent of baby boomers (a 23-percent decrease). Similarly, only 41 percent of millennials' total food spending is at traditional grocers, compared to 50 percent of baby boomers' total food spending (an 18-percent decrease).

Source: AlixPartners

RELATED CONTENT

RELATED VIDEOS

Business Strategy Alignment Global Supply Chain Management Consumer Packaged Goods Food & Beverage
KEYWORDS Business Strategy Alignment buying patterns in food and beverage industry consumer packaged goods Food and Beverage Global Supply Chain Management retail supply chain supply chain Supply Chain Analysis & Consulting Supply Chain Management
  • Related Articles

    Four Trends in Food & Beverage Consumption Drive Retail Center Expansion, Study Says

    Food for Thought: Millennials Especially Favor Apps for Grocery Shopping

    Retail Industry in Transition to 'Wall-less' Omnichannel World, Study Finds

AlixPartners

Risk of Financial Distress in Container Shipping Industry Rises for Third Straight Year, Study Finds

More from this author

Subscribe to our Daily Newsletter!

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • A HAND TURNS A LARGE, LIGHTED DIAL WITH THE WORD RISK ON IT iStock-NicoElNino-1364371014.jpg

    Measuring KPIs and KRIs for Comprehensive Supplier Performance Management

    Technology
  • A COMPLEX SERIES OF ROADWAYS AND RAMPS, SEEN FROM HIGH ABOVE, IS PARTLY SHROUDED BY CLOUD

    Supply Chain Visibility Isn’t Just a Catchphrase; It’s an Imperative

    Logistics
  • A WOMAN IN HER LIVING ROOM GESTURES IN DISMAY ON THE PHONE OVER AN OPEN SHIPPING BOX

    Retailers – Quit Bellyaching and Differentiate Yourself on Returns

    Reverse Logistics
  • A Mid Adult Male Truck Driver Doing Exercises Before Road Trip by the side of a truck

    Podcast | Yoga for Truck Drivers? It’s a Mother Trucker!

    LTL/Truckload Services
  • A CONTAINER SHIP PLIES A SILVERY OCEAN

    CVC Nears Deal to Acquire Logistics Firm Scan Global

    Logistics

Digital Edition

Scb q1 2023 cover

2023 Supply Chain Management Resource Guide: Packing for a Difficult Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Honeywell Intelligrated IFM
Infor Inmar Keelvar
Kinaxis Korber Lean Solutions Group 2H
Liberty SBF Locus Robotics Logility
LogistiVIEW Lucas Systems MCA Connect
MPO Nvidia Old Dominion
OpenText ORTEC Overhaul
Parsyl PMMI QIMA
Redwood Logistics Ryder E-commerce by Whiplash Saddle Creek Logistics
Schneider Dedicated Setlog Holding AG Ship4WD
Shipwell Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing