How Millennial Consumers are Shaping the Food and Beverage Industries

By: Watson Team on Jan 28, 2019

The 80-million-strong millennial generation is like a perfect storm hitting the food industry. They hold huge buying power in today's market, and are expected to spend approximately $600 billion1 in 2017.  And they have strong ideas about what they want (or don’t want) in their food. Their tastes are having a quick and dramatic effect on the industry. 

What Do Millennials Want?

A Maru/Matchbox November 2016 survey2 of US consumers ages 18 and older found that millennials value features like “GMO free” and “locally sourced” far more than the Baby Boomer generation. Not only that, the study found, but nearly two-thirds of millennials said they don’t mind paying more for organic, natural, sustainable, and/or locally sourced food. And the numbers back this up: The premium food market in the US rose 8 percent from 2015 to 2016, which outpaced the growth of the food market as a whole by 3 percent.

millenial-consumers-supp-image-400x500We know that millennials are nutrition-conscious and willing to spend more for fresh fruits, organic foods, and natural products. More than 80 percent of millennials say that buying these types of products makes them feel like they are being responsible consumers and making their health a priority. 

While millennials expect more from their food than their predecessors, they are busy—establishing their careers, socializing, and, in increasing numbers, are having children of their own—so they don’t have a lot of free time for food preparation making convenience foods desirable. Fortified foods that deliver more nutritional bang for their buck are also appealing.

Another survey3, this one conducted by Elite Daily, found that 60 percent of millennials are brand loyal and that loyalty grows out of good customer service, social media engagement, and social responsibility of the brand. For instance, according to Forbes, nearly three-quarters of millennials say they prefer to purchase products in recyclable packages.

“Sixty-two percent of millennials are more likely to stay loyal to a brand that engages with them on millenial-consumers-supp-image-400x500 Copysocial media sites. A good quality product, not price, is also important in ensuring they become repeat customers,” Elite Daily concluded. Rather than chasing trends, brands would do well to change their focus to producing high quality, wholesome, nourishing foods, up their social media game, and be socially responsible.

Millennials are heavily engaged on social media and put great stock in their peers’ opinions, much more so than previous generations. When making buying decisions, they read reviews and comparison shop online. According to Forbes4,  more than half of them make buying decisions based on whether or not the brand supports the causes they find important. These trends allow some advantages to smaller companies, companies that are local, are highly engaged on social media, or sold online, but larger, more established companies are taking advantage of these forces, too. 

How Do Food Brands Attracts Millennials?

Foods that are perceived to be both high quality and super nutritious are destined for success with this market segment. A good example is full-fat yogurt—everybody is doing it these days and Millennials are eating it up. With wholesome ingredients and lauded health benefits, the yogurt market is a prime example of what millennials want from their food.

Rebranding for “Instagram appeal” is another way big brands can take advantage of millennials’ love of sharing their purchases on social media. Giving their packaging updates that are especially photogenic and appeal to millennials’ sense of style has given some brands huge sales boosts.

Leveraging millennials’ demand for convenience is another way big brands can tap into the market. Amazon is an obvious example, but other national brands are becoming more and more available, and more visible online, too.

Wholesome, “clean” foods, like plant-based milks—made from nuts, legumes, and seeds—are a category with huge upside potential and major appeal to health-conscious millennials. The fast-casual chain Chipotle built their brand by committing to using only non-genetically modified ingredients and offering “food with integrity”— “vegetables grown in healthy soil” and meat from animals raised in an environment where they were able to “freely root and roam outdoors or in deeply bedded barns.”

As the first generation of “digital natives,” millennials use the internet and mobile devices for everything they do—including food shopping and discovering information about nutrition. Short on time and committed to eating nutritious and wholesome food, convenience is key. Convenience foods like pre-cut vegetable packs, pre-sliced fruits, fruit cups, and dried fruit are especially attractive to them, as are fortified foods that deliver bonus nutritional benefits in an easy-to-consume package. In 2016, according to the International Food Information Council Foundation 2016 Food and Health Survey5, nutritional/supplement bars, meal replacements, and beverages broke into the top 10 fastest growing categories in food and beverage sales for the first time.

The oldest millennials are turning 35 this year, which means they are entering their prime spending years (35 to 44). Accenture6 puts the predicted spending power of the generation at a mind-boggling $1.4 trillion dollars by 2020. They have high standards for the food they put in their bodies, but they are willing to pay big money for the privilege.

The food industry’s challenge is to respond to millennials demands, by using wholesome, “clean” ingredients, using sustainable production and packaging solutions, packing their products with nutrients, making their products easy to find, buy, and consume, and, perhaps above all, leveraging technology to spread their message, build engagement and customer loyalty, and deliver product into millennials’ shopping carts. 

Are you interested in learning more about how you can pack your products with nutrients to appeal to millennial consumers? Click to watch our video on choosing a Custom Nutrient Premix supplier

1 Accenture, Who Are the Millennial Shoppers and What Do They Actually Want?, accessed October 11, 2017.

2 Emarketer Retail, How Millennials Are Rewriting the Food Industry Playbook, accessed October 11, 2017.

3 Elite Daily, Millennial Consumer Study, accessed October 11, 2017.

4 Forbes, The Year of the Millennial Customer: Is Your Customer Experience Ready?, accessed October 11, 2017.

5 Food Insight, 2016 Food and Health Survey, accessed October 11, 2017.

6 Accenture, Who Are the Millennial Shoppers and What Do They Actually Want?, accessed October 11, 2017.