Generation Y has a huge amount of buying power and are forming their opinions about brands and products now. They are well-informed, be it from their parents or through the media, and learn about nutrition and food ingredients more than their predecessors.

As the National Association of College & University Food Services (NACUFS) notes, the Echo Boomers (also known as Generation Y) comprise 24% of the U.S. population. This 70 million strong group of individuals between the ages of 10 and 28 represents $625 billion in annual buying power; it is the country’s most diverse generation in terms of preferences, culture and ethnic backgrounds. They are well-informed and avoid the notion of trial: if everyone else is doing it, they go straight to adoption. The group, as a whole, is described as individualistic, distrustful and cynical of overt marketing, because they have been branded since birth.

In terms of food spending, this generation may well be the foodservice industry’s best friend. Generation Y Americans eat out an average of 24 times a month, according to a Technomic survey, spending $1,152 yearly on restaurant food purchases. They select fast food restaurants more than 80% of the time; however, that is not to say that their purchases are necessarily unhealthy: their consumption of salads is on the increase.

More than 10% of the group goes to gourmet coffee shops three times a week or more, according to the Technomic survey. Averaging 4.6 cups per day, Generation Y is the fastest-growing specialty coffee consumer segment, largely helping to propel blended coffees into a $1 billion industry.

As Janet Paul Rice, associate director of dining services at Concordia College, finds, “College students are spending money now, developing habits. They are forming opinions, if they haven’t already, about brands and companies. Their concerns and questions are more prevalent now, and they are much better informed, be it from parents or through media or their learning process. They are better informed about nutrition and food ingredients. Things like allergies are much more known.”

Taught Well

Generation Y is the fastest-growing specialty coffee consumer segment, largely helping to propel blended coffees into a $1 billion industry.

“What college students are eating today is what they were educated to eat, to what their tastes were educated to when they were younger. You get a broad range, with some wanting organic, home-grown, fresh, not modified. However, a couple of things are at play: one is the educational process and a much stronger awareness at an earlier age as to what is available regarding variety, freshness, quality, additives and what is ‘good for you’ and not. Plus, at the earlier ages, you have a much stronger parental influence,” explains Lance Thornton, director of dining/food services at The Principia. In his role, Thornton has experience dealing with a variety of school-age groups, considering The Principia has 525 students in its pre-kindergarten through 12th grade levels, as well as another 550 in its four-year liberal arts college.

“The minute we start talking about college, you get a different standpoint. The term ‘Freshman 10 or 15 or 20’ is absolutely true. (The term refers to the amount of weight freshmen students are likely to gain during their first year on campus.) I have seen students look totally different after just a few months. They are not accustomed to anyone controlling or not controlling what they eat and how they eat and their patterns and when and where. Some of it might be metabolism changing, but much of it has to do with their newfound freedom,” says Thornton.

Researchers at the University of New Hampshire (UNH) found this freedom might be leading to unhealthy students. As part of its Young Adult Health Risk Screening Initiative, UNH surveyed nearly 800 college students between 18 and 25. Nearly half of the male students were overweight or obese, as were almost 30% of the female students. According to the survey, the men ate about 2,700 calories a day, with women consuming roughly 1,800. More than half the men and 20% of the women had high blood pressure.

Students are attempting to counteract these health and weight issues in different, sometimes dangerous ways. The March issue of Nutrition Journal found 83% of college women were dieting, regardless of their weight. Making matters worse, these women are often using unhealthy methods such as skipping breakfast or suppressing appetites by smoking. As Lisa Jahns, a professor in the nutrition department at the University of Tennessee at Knoxville notes, “It’s a period of dietary transition. In many ways, students are learning to feed themselves.”

Universities are responding with a variety of approaches. Duke University offers an interactive nutrition workshop for freshmen with eating problems. Included are tips for quick and healthy meals in the dorm, as well as advice on how to make correct food choices in an all-you-care-to-eat dining hall.

Other institutions are attacking the problem by eliminating unhealthy aspects from their menu offerings. Recently, Texas A&M University eliminated trans fats from all 30 campus eateries, which range from cafeteria-style dining halls, restaurants and food court specialties to snacks and coffee bars. Meanwhile, campus food provider Sodexho has switched to oils and shortenings that have no trans fat.

Brand Aware

Students attending larger schools will find no lack of recognizable options. Subway, Burger King, Jamba Juice and Starbucks are all popular fixtures on college campuses. Leslie Bowman, director of contract administration for University of Minnesota’s dining services, explains, “Students in high school, part of their entertainment dollars are spent on food at the mall or going out to chain restaurants. The expectation is that they are going to see the brands they know and love on campus.”

However, some of the fastest-growing brands on campus are smaller-scale outfits throwing their hats into the $4.6 billion college foodservice industry. Chick-fil-A, well-established in the Southeast, can now be found on campuses ranging from The College of William & Mary to NYU. Even regional concepts can be found in colleges, providing a local flavor for students who are thinking local in a number of ways.

Sustainable foods—items grown locally with ecologically sensitive methods—are something of a rage on campus, as are organic products. Estimates say roughly half of the nation’s 15 million college students have access to some organic food on campus, even if it is at some expense. In the 2004-05 school year, Yale’s annual food costs were about $4.6 million. The following year, sustainable and organic foods increased the school’s costs to just under $5.6 million, according to the school’s financial and administration services. While 40% of the food served on campus is organic, the ultimate goal is to serve 100% sustainable and organic food, envisions Thomas Peterlik, director of Yale’s Culinary Resource Center. He says the school is swallowing the added costs, as the budget for student food has increased to $2.94 per meal from the $2.10 it was two years ago.

In all likelihood, the students would pay that premium. Thornton cites his experience when he first began stocking Odwalla as an example. “They are higher priced,” he explains, “but a great product. Many of my colleagues looked at me and said, ‘You’re crazy. The students will never buy that.’ I put in a whole cooler, a huge space in a fairly small area, and we couldn’t keep it full. Great product, great packaging, not a long shelflife, but I don’t have to worry about it: it’s not on the shelf long enough for that to be a concern, even at that premium price.”

The Option Play

“Gen Y customers want lots of options,” Thornton finds. “There is a very strong desire for ethnic items—and for authentic ethnic. Among younger students, it is more simplistic. The desired options increase as the grades progress.”

To offer the students the variety and options they crave, The Principia allows students a degree of customization. “We have a night where we have Asian cuisine, and the students can put together in any combination they want,” says Thornton. “We try to pick authentic and have brought Cuban and Mexican recipes in, as well as some Cajun cuisine. That is another thing that students really seem to be looking for. They are really coming in with higher expectations, even at younger ages, where they want authentic ethnic cuisine.”

How are colleges and universities responding to these demands? A recent survey by FoodService Director found 25% of campus dining services employing at least one executive chef. As Thornton notes, “That’s how a lot of colleges and universities are working through the trends we are dealing with and the requests we are getting for authentic ethnic cuisine and organic items and other menu challenges.” The Principia employs both an executive chef and a pastry chef. “It impresses the students and actually the faculty quite a bit,” he explains.

That impression can go a long way. Rice cites a situation at Concordia immediately after the school hired its executive chef: “Just after chef Jim joined us (in January of 2006), while he was still getting his bearings and learning about the college foodservice market, and before we had changed anything yet, there were already comments that the food was so much better since he joined the staff. There was a positive perception change.”

How can manufacturers assist campus dining directors and attract Generation Y? “The student wants hot, fresh and now, with lots of variety. Then, they want it quick and ready to go right now and want to be able to leave with it,” Thornton explains. “Everybody is so much on the go. While almost contradictory, it is another indication that everybody wants it their way when they want it that way. We’re actually moving toward adding more grab-and-go space in our operations and looking for packaged products to be attractive, convenient, to sell themselves with great marketing and lots of information. It’s a matter of changing perceptions. So that a packaged product can be perceived as fresh, organic, without preservatives or additives and with natural sweeteners: that’s the direction all our customers are going.” Talk about a homework assignment!