Findings from a joint study announced recently by Jeffries, a global investment bank, and AlixPartners, a global business advisory firm, suggest that demographic shifts between now and 2020 will drive significant changes in the food industry.
The study, called Trouble in Aisle 5, tracks the buying habits of Millennials, defined as those born between 1982 and 2001. By the start of the next decade, the authors believe the contrasts between this group and elderly Baby Boomers will require food producers and retailers to be to be more nimble, with more innovative product development, leaner supply chains and more effective use of marketing initiatives.
Key findings in the study are:
- While Millennials are more price sensitive than Baby Boomers, a majority of them are willing to pay more for natural/organic products.
- Millennials expect convenience, have less brand loyalty than Baby Boomers, and are more receptive to shopping for food at locations other than the traditional grocery store.
By 2020, it’s expected that Baby Boomers will be less than 20 percent of the U.S. population, while Millennials older than 25 will comprise 19 percent. As a result, the study asserts that food companies will be under greater pressure to deliver more for less – a fresher, higher-quality product, with more choices and more convenience in a shopping environment where consumers are becoming less brand-loyal and more inclined to shop across channels.