People between the ages of 21 and 38 are suspicious of marketing efforts directed at them. Younger consumers have no brand loyalty and have the average attention span of a tweet.
Mythology seems to surround millennials and Generation Z, but the numbers don’t lie: According to the U.S. Census Bureau, there are 70 million people between the ages of 21 and 38, and this group makes up 24.5 percent of the U.S. population. And they have buying power that grows quickly with age—those aged 25 and below have income of $34,300, but that nearly doubles to nearly $65,000 for the 35-to-44 age bracket.
With numbers like these, it’s no wonder operators make every effort to cut through the fog and figure out real decision-drivers among this sometimes fickle consumer group. But recent research shows one clear set of preferences emerging: Millennials and Generation Z are more concerned with clean food sourcing, menu transparency and processed food than most other age groups, making these key areas of focus for non-commercial operators.
On the fast-casual track
The trend toward fresh, free-from ingredients and customizable options, both of which have coincided with the rise of the fast-casual segment, explains in part younger consumers’ penchant for less-processed options. “This is the Chipotle and Panera generation,” says Sara Monette, vice president, consumer insights and innovation at Chicago researcher Technomic, which recently published a consumer report about college and university students.
And because this group is so closely tied with the rise of fast casual, Julia Gallo-Torres, senior analyst of foodservice at international research firm Mintel, also looks to millennial restaurant usage to understand this group, which also could be called the “customize me” generation.
“They’ve grown up with fast-casual, and they expect that service style wherever they go. They are used to wanting what they want, when they want, wherever they want. It’s a pattern that carries through and is reinforced in college,” Gallo-Torres notes.
The additive-free zone
Not only do campus and other on-premise dining services need to compete with popular fast-casual chains, but they also need to follow their sourcing practices. “They see these brands as the gold standard,” Monnette says. “They trust that if these brands are moving away from additives and from highly processed foods, than it’s important. We found that students want clean labeling and greater ingredient transparency because they are used to seeing it.”
Younger consumers look for these natural, fresh ingredients, but according to Monette, they’re also quick to believe what they read. “If they hear negative buzz about an ingredient, brand or a term like GMO, they are easily influenced and often take what they read at face value,” she says.
As a rule, Monnette explains, college students and post-college young adults have shallow, “Twitter-based” knowledge. They read labels and use smart phones to fact-check ingredients, which explain why more than half (52 percent) of college students want nutritional information available, according to Technomic.
For operators, then, it’s not enough to offer food and beverage options with all-natural ingredients. Operators should call this out on menus and signage to provide customers with this type of information.
Recent research from Mintel sheds more light on the ingredients younger consumers want to avoid, especially in beverages. “We break out the millennials into two groups: The younger half are 21 to 28 years-old, and the older are 29 to 38, which means more of their decisions are driven by their higher earning and because they more likely to be parents,” Gallo-Torres says. “We find that 13 percent of the younger group avoids diet drinks and artificial sweeteners; 40 percent drink less soda to be healthy; 14 percent want to see lower calorie drinks on menu. By comparison, 18 percent of the older group avoids traditional diet soda, and 34 percent avoid artificial sweeteners.”
Mintel also finds that 22 percent of older millennials want lower calorie drinks on menus, which means that naturally sweetened, real fruit juices and sparkling beverages will hit the mark. Technomic also sees freshly squeezed juices, vegetable-fruit blends, kombucha and custom mixed beverages trending among younger consumers.
A recent report on non-alcoholic beverages from Datassential, a Chicago-based menu research firm, points to greens, coconut water and organic/natural sweeteners trending upward in beverages. While these beverage ingredients are still just 1 percent of all the ingredients cited on beverage menus, Datassential tracks triple digit growth in usage since 2010.
“Millennials were generally more inclined to indicate better-for-you attributes as being important when compared to consumers overall,” Datassential researcher Jennifer Aranas says. “All natural ingredients, no artificial colors, real sugar, natural sweeteners, organic, and fair trade are terms that will strike a chord with this group.”
This post is sponsored by Campbell's Foodservice