Marketing to Millennials

Understanding this lucrative demographic helps retailers and produce suppliers better target marketing messages.

California Avocado Commission worked with university and college culinary groups for menuing ideas and grove tours for education. (photo courtesy of California Avocado Commission)

If it is true that nearly 50 percent of supermarket sales is attributed to the group of consumers who “came of age” around the turn of the century, then opportunities abound for retailers and suppliers who understand the proclivities of these shoppers.

Price, taste, local, health and corporate transparency are among the key drivers Millennials (also referred to as Generation Y) gravitate toward, but there is also an element of spontaneity and experimentation that produce marketers can capitalize on if they want to boost sales and increase consumption.

Due to this demographic’s healthful focus, produce is a strong category with Millennials. These consumers are eating less processed food and more natural items, such as produce.

“Millennials are more attached to the health and wellness wave that continues to be strong as a megatrend,” says Rick Stein, vice president of fresh foods at the Food Marketing Institute (FMI), based in Arlington, VA. “They align themselves in the fresh department.”

A number of sources report four out of five retailers attribute 50 percent of their sales to Millennials, which total about 75 million in the U.S., according to the U.S. Census Bureau.

“Messaging to these consumers has to be very authentic, as this generation is about sharing and inclusiveness,” says Steven Muro, founder and president of Fusion Marketing, a marketing firm based in Chatsworth, CA. “Millennials want content, not advertising, and this [content] needs to have value and be usable, fun, engaging and sharable.”

According to CarrieAnn Arias, vice president of marketing at Monterey, CA-based Dole Fresh Vegetables, “The specific attributes Millennials want in their food are freshness; transparency; convenience; an emphasis on healthy, simple ingredients; a growing preference for ethnic cuisines; and a desire for spices and seasoning, which dictates the stores they choose and how they shop.

“Much has been written about Millennials only shopping the perimeter of the store, and while this may be a bit of an exaggeration, we know the produce, meat and bakery departments are destinations, because they deliver on many of these needs.”

Research has also revealed that, more than any other generation, Millennials respond best to a well-maintained produce department stocked with fresh, pristine fruit.

Reaching This Demographic

To understand the Millennial consumer, it helps to have a consistent lens or a framework that can compare these consumers against the entire market, to other generations and to one another with their behavior and media usage, according to New York City-based market research firm Nielsen’s Millennials: Marketing to Generation ‘Me’ report.

Millennials are more likely than Gen-Xers or Boomers to hear of what’s going on with companies through social media outlets (such as Facebook, Twitter or blogs) according to the Nielsen report. They’re also more likely to trust the information they learn about a company through social media than information offered elsewhere.

“Social media engagement seems to be outpacing traditional methods of advertising, like television and print,” says Jacob Shafer, marketing and communication specialist at Mann Packing Co., Inc., headquartered in Salinas, CA. “Retailers can still drive sales by creating an easy-to-use value-added loyalty program, and for Millennial consumers, transparency within the program is key.”

“It’s not about print or being online, but doing all these things right — such as texting, using social media and getting involved with all the ways to deliver a message,” says Muro.

Where the target Millennials spend their day in terms of social media communication will determine what platforms to use (such as Facebook, Twitter, Snapchat and Tumblr).

“Millennials spend about an hour a day on Facebook, seven hours a month on Instagram, and six hours a month on Snapchat,” says Muro of Fusion Marketing. “And those [figures] are just the online presence, and it doesn’t include Twitter, Tumblr, Vine, Spotify and BuzzFeed. Plus, they’re not all the same with these platforms.”

By zeroing in on Millennial’s lifestyles, communication mediums, wants and needs, retailers and brands can effectively catch the attention of this lucrative demographic.

GenerationWhy is a custom research study commissioned by the Washington, D.C.-based Corn Refiners Association and conducted by the Omaha, NE-based research firm MSR Group. The study’s data segmented the consumer demographic into four different types of Millennials: Traditionalists (37 percent) represent the largest segment and are less connected and the least health-conscious; Bon Vivants (28 percent) are more likely to dine out and least likely to avoid certain ingredients; Purists (19 percent) avoid certain ingredients and use social media to find deals; and Balance-Seekers (16 percent) most interested in moderation and engaged as well as influential on social media.

According to Sara Martens, vice president of MSR Group and GenerationWhy research analyst, “We know that 93 percent of [the Food Purist] segment checks a brand or product’s page on social media for discounts or specials. So, if you’re trying to reach her, then coupons or deals would be the way to draw her to the produce section.”

“This demographic spends more online than any other age group,” says Muro. “On average, they spend about $2,000 annually on e-commerce.”

Spending Habits

Though social media and the use of technology are child’s play to the Millennial shoppers, this group also enjoys the experience of grocery shopping, as long as certain criteria are met. The “I want it, when I want it” generation also likes quality for a good price. Various research during the past couple years — including one by MediaPost (a New York City-based integrated publishing and content company providing resources for media, marketing and advertising professionals) — shows the top brand for food shopping is the store brand (or private label). With “store brand” or “generic brand” being the primary response, it’s no wonder Whole Foods Market conceptualized and opened an entire banner catering to Millennials with 365 by Whole Foods Market. Walmart/Great Value, Trader Joe’s, and Kroger also made the Top 10 list in the MediaPost survey. For most of the respondents, their reason for going with store brands was simple: less cost for what they feel is the same quality.

According to the Spring 2016 study, The Why Behind the Buy Shopper Survey, by Jacksonville, FL-based sales and marketing consultants, Acosta, Inc., 72 percent of Millennials enjoy grocery shopping. This number is significant when compared to the desire to visit grocery stores from other shopping groups, especially the Baby Boomers (54 percent favorability) and older (45 percent favorability) segment.

When it comes to brands they support, Millennials are likely to spend more for goods and services from companies with programs that give back. According to a report from the New York City-based consultancy firm the Good Scout Group, of all generations “Gen Y likes being asked to give to charity at the register the most.”

More than 50 percent said they will spend more on products from socially responsible companies, and 60 percent are willing to pay more for a product if it’s good for the environment, according to Nielsen research. When these consumers buy, they care about a brand’s social impact, making cause-marketing appealing to this generation.

“It’s not enough to have a strong brand in and of itself,” says Maeve Webster, president of Menu Matters, an Arlington, VT-based company that assists foodservice operators in identifying, understanding and leveraging trends. “That works for Gen-Xers and Baby Boomers, but is not effective with the Millennials.”

This younger demographic wants to know why they should care about the brand, its heritage, and more about the company producing the product. These are consumers whose buying decisions are emotionally and ethically driven, so the connection is key.

Although Millennials collectively have more wealth than Baby Boomers, individually they don’t, says Stein of FMI, which gained insight on Millennials through its ongoing research — particularly its “Power of Produce” study (now in its second year).

Consequently, these consumers are in tune with organic product, but there’s a limit to what they will pay for it. “Millennials perceive organics to be more nutritional and less harmful to them, so they try to stay with these products if possible, assuming price doesn’t take them out of the category,” says Stein.

“This demographic spends more online than any other age group,” says Muro. “On average, they spend about $2,000 annually on e-commerce.”

“Organic in and of itself, as it relates to health and wellness, is more important — or perhaps I should say more de rigeur — to Millennials than to previous generations,” says Samantha Cabaluna, marketing director for San Juan Bautista, CA-based Earthbound Farm. “With that understanding as a starting point, we strive to introduce new flavors for more adventurous palates and for those looking to do more with greens than make a salad. Millennials are more adventurous with their food; they are more apt to want to travel with their taste buds, so to speak.”

Convenience Is Key

In terms of food, the ability to get dinner on the table in 20 to 30 minutes is ideal for these consumers, who are also seeking cleaner production with no pesticides and organic produce whenever possible.

“These consumers do not want to spend time prepping food, so looking at the value-add for convenience, such as cut fruit, and positioning properly is key,” says Patty Johnson, global food analyst at Mintel International, a market research firm based in London. “For those with children, it’s about avoiding the dinner crisis by balancing the desire to go out with the desire to cook from scratch and control the ingredients.”

Older Millennials, especially those with children, are all about convenience, kits, preassembled meals and making meal preparation easy as possible, says Muro. “So at retail, anything we can find that emphasizes convenience, presliced, premixed and packaged salads is good inspiration, with loyalty as the goal.”

Companies are responding to this need for convenience and fresh options. For example, Dole’s innovation teams are creating products,

D’Arrigo Brothers partnered with celebrity nutritionist Keri Glassman to create broccoli rabe recipes, like these “lemon chips.” (photo courtesy of D’Arrigo)

such as its new Chef’s Choice Salad Kits, with the Millennials in mind, positioning its products against the 18- to 34-year-old consumer when it makes sense.

“Chef’s Choice’s emphasis on freshness, flavor-forward ingredients, easy instructions and the opportunity for hands-on preparation appeals to Millennials, so we are leveraging’s Dole’s extensive social media platforms with user-generated content (UGC) contests and other relevant tactics to reach this group,” says Arias of Dole.

“For convenience, we’re excited to have just launched our new organic Chopped Salad Kits, and we share our sustainability story on an on-going basis — it’s part of our DNA,” says Earthbound’s Cabaluna. “That starts with organic farming practices and extends to our clamshell packaging, which is made from post-consumer recycled PET.”

D’Arrigo Brothers of California, located in Salinas, focused on Millennials with its broccoli rabe.

“We noticed the majority of our sales were on the East Coast and eastern Canada due to the big Italian population, but then we saw an opportunity with Millennials,” says Claudia Pizarro-Villalobos, marketing and culinary manager.

The company launched a Millennial-focused broccoli rabe marketing campaign featuring the product’s health benefits, which include anti-cancer compounds.

“We are fortunate; as a vertically integrated grower/packer/shipper, we have scientists on staff to do testing on this product,” says Pizarro-Villalobos.

The company partnered with celebrity nutritionist Keri Glassman and enlisted foodie and chef bloggers. D’Arrigo Brothers is also working with celebrity chef Candice Kumai to create broccoli rabe recipes. The promotion is rolling out on social media.

The company recently expanded its broccoli rabe bunch to include an 11-ounce triple washed premium chopped value-added bag geared for the Millennial demographic. “We’re also working with other partners to create blends that include broccoli rabe, which we expect to launch in 2017,” says Pizarro-Villalobos.

“Millennials overall are looking for quick meal and snack options that are priced right and convenient,” says Mann’s Shafer. As a result, Mann’s recently launched Nourish Bowls for consumers on the go, which is a warm single-serve meal containing fresh vegetables and grains that can be prepared in about 4 minutes. The company partnered with three San Francisco Bay area chefs to develop the line’s flavor profiles, which include Monterey Risotto, Sesame Sriracha, Smokehouse Brussels and Southwest Chipotle.

“Older Millennials are expert online customers, but that doesn’t mean they stopped shopping at traditional venues, especially when it comes to grocery,” says Shafer. “When it comes to fresh veggies, older Millennials are not unlike generations past; they want to touch the product, smell it, and pick out what looks best.”

To target these consumers, Mann’s added to its Culinary Cuts line of fresh-cut vegetables, which are offered in a variety of shapes, including Sweet Potato Ribbons, Butternut Squash Zigzags, Finely Chopped Cauliflower, Shaved Brussels Sprouts and Sliced Broccoli Clovers.

When it comes to time spent in a grocery store, according to the July 2016 The Revolution of Grocery Shopping Hot Topic Report from Acosta, the convenience of online shopping is having an impact on grocery store purchases. Nearly half of Millennials surveyed said they would use an app allowing them to pay for their groceries.

Millenials Want Transparency

One of the important things retailers and companies need to do when targeting Millennials is focus on the story behind the brands and products.

It’s important to note that Millennial consumers expect more from food brands, and their preferences changed because the access to real food and information about food is changing.

“Millennials are experimenting and connecting with smaller, more transparent and local brands that they can trust,” says Suzanne Ginestro, chief marketing officer and general manager of long term innovation for Campbell Fresh (or C-Fresh) of Campbell Soup Co. (Camden, NJ) — a fresh-food division that combined the assets of Garden Fresh Gourmet business with carrot and juice supplier Bolthouse Farms and Campbell’s portfolio of refrigerated soups.

“In order for the big food companies to connect with Millennials, they are either acquiring these smaller brands or are building their own authentic brands that feel very different from the mainstream brands that they currently produce and sell,” says Ginestro.

C-Fresh toggles between buying and building new product platforms and brands. For example, the company built the premium beverage brand, 1915, roughly a year ago in effort to capture a greater share of sales at the perimeter of supermarkets.

Jeff Dunn, president of C-Fresh, told Food Business News (the Kansas City, MO-based trade magazine for the food processing industry), “We’re actively building our brands and capabilities to leverage the shift in consumer demand for ‘better-for-you’ products and to sustain growth in packaged fresh categories over the long term.”

In-Store Millenial-Marketing

Since Millennials are not the same, Muro of Fusion Marketing says companies need to do research for products or commodities to ensure people interact with what’s being sold. “There is a lot of information provided by associations, but this will only reveal how Millennials interact with product or food, not with specific items being sold,” says Muro.

Since Millennials spend the majority of in-store shopping time around the perimeter, rather than the supermarket aisles, experts say retailers and brands should concentrate promotions and messages for these consumers in this part of the store.

“Certainly, due to the Millennials’ quest for fresh foods, the produce department can be considered ground zero in efforts to capture the 18 to 34 age market,” says Dole’s Arias. “Since many Millennials don’t possess the same cooking skills as other generations, an emphasis on step-by-step recipes, serving suggestions and convenient-but-healthy products will likely also reap rewards.”

According to the Acosta research, supermarkets are also finding success merchandising traditional center-store goods in conjunction with the perimeter products. Bringing wisely cross-promoted center-store items into the produce department, such as crackers for dipping guacamole, peanut butter next to apples, cereal or oatmeal for suggested breakfast tie-ins to fruit, etc., will go a long way to building the market basket among Millennial shoppers.

“This includes nutritional information, how to prepare it and cooking tips,” says FMI’s Stein. “Retailers who provide this will garner additional sales.”

Millennials also index high on local food, as they perceive it as fresher and seek to support the local economy. However, the focus has changed in the past year.

“Freshness was the top reason Millennials sought local product in 2015, but in 2016 the top reason changed to supporting the local economy,” says Stein. “Also, the circumference with local products has tightened in the last year, with consumers seeking a more defined radius.”

According to FMI research, this varies depending on the region. In states with longer growing seasons, such as Arizona, California, Florida and Texas, local is considered within 100 miles. For states above the Mason-Dixon Line, this radius expands to encompass more states.

Because the Millennial generation spans a much wider age gap than other demographics, it helps to be aware of the differences between the older and younger consumers who fall into this classification.

For example, some of these consumers closer to the Gen-Xer age are more apt to seek adventure and are attracted to sophisticated messaging and imaging, says Webster.

Maturity for younger Millennials is nonconforming, since the economic conditions are much different than in years past.

“The fact remains that there are boomerang kids and younger Millennials living at home, so their road to adulthood will be different,” says Muro. Building experiences with this group is one of the key ways to connect, since one in four are willing to pay money for an experience rather than product.”

Although there are differences, many preferences are the same for older and younger generations in this demographic.

Meeting Goals & Needs

The goal in marketing to these consumers is for brands to speak the language of Millennials.

“People ages 18 to 34 will engage when hearing or reading words that could have come from them or their peers, since these messages create comfort and trust,” says Shafer of Mann Packing. “Marketers are meeting the needs of younger and older consumers in this generation by focusing on price above all other factors — including quality, brand, store and availability.”

This is in part due to the fact that Millennials have the ability to instantly price compare and geo-locate product availability, so if something is too expensive at one store, they can locate a sale on that same product in their area with relative ease.

For grocery shopping, the majority of Millennials prefer higher-value rebate offers versus an instant discount. “In response to this tendency, retailers can offer rebates that provide more savings and a greater overall value as opposed to a simple price-match or dollar off promotion,” says Shafer. “Again, retailers must assure that any rebate program is not difficult to redeem or deceptive, which would turn off a Millennial shopper.”