Millennial Purchasing Behavior, Online Shopping and Marketing to Parents
A collection of recent food and beverage industry trends and marketing reports
The river of food and beverage industry trends and marketing reports continues to flow at high volume, and without a guide, the waters can be rocky and disorienting. Here, we’ve collected a sample of recent reports and surveys that offer some degree of insight into specific industry segments, and could potentially provide direction and inspiration as you move through stages of product development.
Where Do Millennials Purchase Groceries?
Millennials are more likely to have purchased groceries from a discount super center (like Walmart or Target) in the last month than from a traditional supermarket. The overall population, on the other hand, continues to be most likely to buy food from grocery stores. Where they shop for groceries is just one of the many ways that Millennials' approach to food differs from other generations according to Datassential's new Millennial Keynote Report.
39% of Online Shoppers Make Mobile Purchases
Mobile commerce presents potential growth opportunities among internet and ecommerce shoppers
In the brand new report Digital Payments in the US: Consumer Usage, Wallets, and P2P, market research firm Packaged Facts reveals that in 2017 the percentage of American adult consumers reporting mobile internet activity in the past 30 days reached 52%, up roughly 50% in just four years. Banking-related mobile activity grew at faster rate (up an average of 16% annually), while purchase-related mobile activity grew at an even faster rate (up an average of 28% annually), which suggests that mobile access is translating quickly to mobile commerce.
While mobile shopping has a long way to catch up to online shopping generally, the gap is closing. In 2017, more than a third (39%) of online purchasers reported making a mobile purchase, up from less than 20% of online purchasers in 2013. Similarly, banking and gathering information for shopping has similarly trended upward.
The trend underscores the importance of mobile checkout schemes that make the mobile purchase experience simple and seamless and the need to smoothly integrate them into the mobile shopping experience, notes Packaged Facts.
70% of Consumers Will Shop for Groceries Online by 2024
Food Marketing Institute (FMI) and Nielsen released its second-year findings of its “Digitally Engaged Food Shopper” study at the FMI Midwinter Conference in Miami. Building on the joint research findings issued in 2017, this second set of insights examines what food and beverage manufacturers and brick-and-mortar retailers need to do to ready themselves for the rising digital grocery landscape, identifying six digital imperatives for omnichannel success. The research indicates that in as few as five-seven years, 70% of consumers will be grocery shopping online. Now, the estimated $100 billion spend, which is equivalent to every US household spending $850 online for food and beverage annually, will occur by 2022 or 2024
Key findings from this year’s study show that omnichannel shopping has passed the tipping point with online grocery shopping on an accelerated path to industry saturation. The first year of research predicted that consumer online food and beverage spend could reach $100 billion by 2025. Today, FMI and Nielsen report that the pace of change and adoption has far outrun initial predictions, where the pervasiveness of online engagement could cut the timeline by as much as half.
1. Align Organizational Structures for Omnichannel Success: Integrate digital offerings in parallel with brick-and-mortar operations.
2. Address Discrepant Datasets: Scrub master data files for discrepancies; strength in data and accuracy is a critical component to successfully support online sale efforts.
3. Integrate Forecasts to Increase Operational Efficiencies: Integrate online and offline forecasting so the right amount of inventory is available to meet orders through either channel.
4. Optimize Shopper Insights: Bring retailer and manufacturer shopper information together into a single, comprehensive view of customer insights.
5. Improve Marketing and Promotions: Optimize the management of omnichannel marketing and promotions.
6. Merge Digital and In-Store Shelf Capabilities: Manage the physical shelf and its digital counterpart to create a seamless shopping experience, where consumers see the same information both on or offline.
Marketing to Parents
46% of households with kids spend at least $150 each week on groceries, but marketing to mom and dad as well as kids has never been more important for food companies
Perhaps more than any other consumer packaged goods segment, the kids food market requires marketers to take a dual approach to satisfy the needs and interests of both parents (as the purchasers) and kids (as the consumers). The influence of kids on the household grocery habits is well documented, but parents are becoming more determined to find a happy medium with products that satisfy the kids without sacrificing nutrition. And there’s a lot of money at stake, says market research publisher Packaged Facts.
In the new report Kids Food and Beverage Market in the US, 9th Edition, Packaged Facts reveals that almost half (46%) of households with kids spend more than $150 weekly on groceries, compared to less than a quarter (22%) of household without kids. And as to be expected, weekly grocery expenditures only increase in accordance to the number of children in the household.
• Fresh food and coupons are draws: Among parents, “fresh” food and beverages are the most sought after product quality, followed closely by products on special sale/promotion and store brands with lower pricing. The availability of a coupon could help parents rationalize a purchase for kids’ food and beverages products that are new and/or may not be enjoyed by the rest of the household.
• There’s a focus on healthy food labels: Healthier/better-for-you claims and specialty brands with values are characteristics that emerge as more important to parents than those without children. Specifically, a third of parents seek out products from specialty brands with values they support—compared to barely 18% of those without kids.
• GMOs a no-no, while natural and organic are good to go: Parents are significantly more likely than average to seek out foods with specific inherent health qualities such as “all natural”, “non-GMO”, and “organic”—suggesting an overall “healthy” approach to one’s diet.
• Free-from claims favored: Increasingly, many Americans are subscribing to a dietary lifestyle that eliminates gluten, dairy, allergens, and vegetarian/vegan as a way to approach health. While products that cater to these types of dietary lifestyles are not widely sought after, parents are more likely than average to do so.
• Sugar-free is the way to be: While health trends are moving away from being diet-focused in favor of adopting a healthy lifestyle, some diet health food terms like no/low sugar continue to be sought after. Indeed, sugar has become the villainous ingredient many parents seek to avoid.
US Yogurt Market Retail Sales Approach $9 Billion, Growth Expected Through 2022
In a new report, The Yogurt Market and Yogurt Innovation, 3rd Edition, market research firm Packaged Facts estimates retail dollar sales in the US yogurt industry were just shy of $9 billion in 2017. Sales increased at a compound annual growth rate (CAGR) of 2% between 2012 and 2017.
In recent years, US consumers have embraced not only Greek yogurt, but have also taken to authentic, clean-label and organic versions, and to yogurt drinks, which are becoming more accepted with sales growing rapidly. Yogurts with new flavors and in new formats have also kept consumers interested in the category, and have helped broaden yogurt’s appeal as a breakfast item, snack, dessert, or meal replacement.
This sustained consumer interest in yogurt is forecast to spur the industry to continued sales growth looking ahead to 2022. Over the next five years Packaged Facts predicts yogurt drinks will continue to grow in popularity, with sales increasing to drive overall market gains. Meanwhile, major marketers will respond to opportunities in growth niches—particularly in plant-based, vegan non-dairy yogurt.