Putting millennials in perspective
Oct. 7, 2014
As the chief executives of publicly-traded food and beverage companies took the stage in Boston at the Barclays Back-To-School Consumer Conference last month to discuss growth prospects, many had one target group in mind — millennials. Not since baby boomers has one market segment received so much attention.
Steve Hughes, chief executive officer of Boulder Brands, said his company is trying to develop product lines that are “millennial magnets.” Deanie Elsner, chief marketing officer of Kraft Foods Group, said her company is tracking three key consumer segments: low income, Hispanics and millennials, and she defined millennial consumers as tech savvy and in search of minimally processed foods.
There is little doubt millennials may be perceived as an attractive target audience, but marketers must heed the lessons learned when baby boomers were the target demographic to be courted. This group is not homogeneous; they are a demographic with age ranges that cover numerous stages of life, all of which have a direct impact on the types of food and beverages they may purchase.
This past March, for example, the Pew Research Center published a report about millennials and pegged the demographic as ranging in age from 18 to 33. In the report’s footnotes, it was noted that the report focused solely on millennial adults and that “the youngest millennials are in their teens and no chronological end point has been set for this group yet.”
It is critical for any marketer looking at this market to further define what life stage they are targeting — teen, single adult, married adult, married adult with children, etc. Each of these life stages, not to mention income levels and ethnicity, is unique, and how consumers within each segment respond to marketing messages will directly relate back to their current experiences.
There are some commonalities among millennials as the demographic is loosely defined, most notably the greater prevalence of technology in their daily lives as compared to previous generations. But this is a trait that will fade as technology becomes more prevalent in the lives of all consumers.
The economic downturn that began in 2008 also may be a defining period for millennials. Yet even in this instance, the breadth of the age range that defines a millennial muddies the water a bit.
For example, a study by The NPD Group shows millennials are a key customer base of the dollar store channel and played a role in the category’s 14% store visit increase during the second quarter of 2014 while the rest of the brick-and-mortar retail market experienced a 4% decline in store visits. The NPD Group attributed the attraction of millennials to dollar stores to the low prices offered throughout the channel. On the other hand, according to the Specialty Food Association, millennials are driving the specialty food segment, because they are willing to spend more money than older consumers on such products as high end chocolate, olive oil and cheese.
Other market research shows millennials are more prone to snacking throughout the day, prefer products that are portable and convenient, prefer private label products, and are more willing to buy food and beverages labeled as natural or organic. Taken together, the behavior of millennials is similar to other demographics.
There are numerous opportunities to be found in marketing to consumers who fall within the millennial demographic, but trying to engage them as a homogenous group may prove disappointing. This is a very diverse swath of the population and their needs and wants will have more to do with their life stage than what age range they fall within.