Younger millennials (born 1990+) are outspending older generations in food dollars, while older cohorts are more likely to be using a number of money-saving tactics to keep food bills manageable.
“Younger millennials have been lulled by the historically low unemployment rates, which is boosting their overall confidence and loosening their wallets,” said Joan Driggs, vice president of Content and Thought Leadership for IRI. “At the other end of the spectrum, many baby boomers, retirees and seniors are concerned about their retirement savings due the volatile stock market this year and are watching their expenses more carefully. In recent years, millennials have been less optimistic than older consumers and were spending less. We are now seeing a role reversal that is impacting spending on edibles across the board.”
Food and beverage trends
Edible sales increased in January 2019; however, the growth was slower than the industry average and cooled off in February and March. The West (4.1%) and Plains (3%) regions led the way in edible growth, and the Northeast (1.4%) and South Central (1.2%) had the slowest growth for the 13 weeks ending March 25, 2018.
Storewide department sales trends are rather mixed. Beverage and liquor were top-performing departments in Q1, while the general food and refrigerated departments, which experienced 3.7% and 3.2% growth in January, declined by 1.5% and 1.1%, respectively, in March 2019.
Produce and meat posted declines in pounds, placing downward pressure on the whole sector in Q1, while the bakery department posted strong dollar growth driven by price. Perimeter pound growth has slowed compared to a year ago across most sectors, including deli cheese, deli meat, deli prepared, bakery, meat, produce and seafood.
Emerging trends in sustainable and plant-based products
With nearly six in 10 consumers interested in eating less meat, and nearly eight in 10 millennials eating meat alternatives, it is no secret that plant-based eating is gaining momentum.
The rate of consumer acceptance of plant-centric products across the store is increasing rapidly, going from just a handful of categories in 2014 to more than 90 categories, totaling more than $13 billion in cumulative sales in 2018. Products such as dish care, facial care and cosmetics are well on the path toward reaching peak household penetration in addition to more obvious products, such as pet food, meat alternatives and cheese.
The need for cleaner and healthier products goes beyond plant-based products, with 78% of consumers saying sustainable sourcing of ingredients is an important product attribute.
“The latest generational spending habits combined with increased interest in plant-based and sustainable products, opens up an array of new opportunities for CPG marketers,” added Driggs. “To be successful marketers must consider the importance of social media reviews, create fresh, relatable content and be authentic when targeting younger consumers. This doesn’t mean marketers should lose sight of older consumers, who still have the greatest purchasing power, but marketers must be very savvy and develop personalized, targeted marketing campaigns that appeal to the various generations of shoppers.”