The 77-million-strong Millennial generation and their $200 billion in buying power will outspend the boomer generation by 2018.
The changing retail landscape and shifting customer demographics within the food industry provide both challenges and opportunities for the in-store dairy, deli, and bakery industries, as evidenced by findings in What’s in Store 2015, the 29th edition of the annual trends publication of the International Dairy-Deli-Bakery Association (IDDBA).
It’s composed of six comprehensive chapters: State of the Industry, Consumer Lifestyles, Bakery, Cheese, Dairy, and Deli.
Among the consumer and retail trends reported in What’s in Store 2015 are:
- New and expanding retail formats are convenience stores, small box, discounters/dollar stores, online shopping and delivery, and “drive” concepts where customers order online and pick up their product right from their cars at a designated spot. These non-traditional channels will continue to chip away at the market share of traditional grocery channels, according to Willard Bishop. It projects a decrease in market share of 1.2 percentage points by 2018 in the traditional channels, which will equate to 44.8% of the market. Non-traditional grocery and convenience store channels will command 40.1% and 15.1% of the market, respectively. Supercenters will also experience dramatic growth, an estimated 19.4% share by 2018.
- Hispanic and Asian American consumers are a growing demographic in the fresh departments. Nielsen reports that Hispanics will have $1.5 trillion in buying power by 2015, a 50% increase from 2010, while the average Asian American household expenditure in 2012 was $61,400, 19% more than non-Asian households.
- Boomers and Millennials wield tremendous present and future buying power. One-half of the U.S. population will be over 50 by 2019, with a projected growth rate of 34% by 2030. According to Nielsen, 80-million free-spending boomers will control 70% of disposable income in the U.S. by 2019. This generation will also inherit $15 trillion within the next 20 years. The 77-million-strong Millennial generation and their $200 billion in buying power will outspend the boomer generation by 2018 as over $65 billion in grocery spending will shift from one group to the other, predicted Acosta Sales & Marketing.
- Men are taking a more active role in grocery shopping and making brand choices at the supermarket. Defy Media reported that more than 65% of men now hold primary shopping responsibilities for several product categories, with 67% stating that they enjoy shopping for the household.
“The manner in which consumers shop for and purchase food—as well as the demographics of the shoppers themselves—continues to evolve in the food retail industry,” said Mary Kay O’Connor, vice president education, IDDBA. “Identifying, researching, and responding to these trends can help retailers successfully engage with the consumers of today and tomorrow.”
The growing importance of Millennials within the in-store bakery and deli departments is further supported by IDDBA’s newest original research, “Engaging the Evolving Shopper: Serving the New American Appetite.” It shows that Millennials are more likely to use fresh perimeter departments for everyday needs, rather than just for special occasions. Additionally, this generation engages with fresh perimeter foods differently than older generations in two ways. Their engagement with fresh perimeter categories is shaped by their orientation to health and wellness and an approach to shopping that is more proximate to eating. They also see higher-quality food experiences as part of an implicit wellness practice that includes food discovery, enjoyment, sociability, and indulgences.
“Millennials value ‘fresh’, which makes in-store bakery, deli, and dairy departments prime destinations for this generation,” O’Connor added. “Stores can capitalize by offering products that meet Millennials’ unique food preferences.”
What’s in Store 2015, the 29th edition, is a 224-page trends report that details consumer and industry trends affecting the in-store dairy case, cheese case, bakery, deli, and foodservice departments. For more information and to order, visit iddba.org/wis.aspx.