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FOOD MATTERS Millennial nutritional concerns & care-abouts July 2013


FOOD MATTERS TO MILLENNIALS  58% of Millennials want their food/bev choices to be from companies that are good corporate citizens.*  52% of Millennials seek out exotic, new, interesting flavor and form choices.  Millennials are looking for a “wow factor” in their foods. They want impressive experiences, cleverly delivered.

Millennials care deeply about food – what they eat, where it comes from, how it’s grown and processed and where they buy and consume. They want to understand nutritional benefit, ingredient value and claim payoff, the brands and companies they choose and the communal experience of cooking/prep and eating. To them, food goes well beyond sustenance and has the potential to satisfy a hunger for entertainment, novelty, travel and conscientious consumption. Based on what we hear from our Millennial community as well as collected through trend watching reports and recent surveys, we offer our perspective on “5 Nutritional Guidelines” for CPG food and beverage brands to take into account in order to effectively engage with Millennials. Our perspective, combined with illustrative examples, is a guide for creation of meaningful brand experiences that Millennials will want to sink their teeth into. *AdAge, NYT, WSJ studies,2013


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MILLENIAL NUTRITIONAL GUIDELINES

MILLENNIAL TASTES ARE SHIFTING INGREDIENT SCRUTINY

TOUCHY AND REAL PROCESS TRANSPARENCY TEMPERED INTENSITY


1

TASTES ARE CHANGING

It is well-known that Millennials are a very diverse group generation. However, they have internalized their diversity as a key value and point of differentiation for their generation.

Their love of diversity extends to food. This is a group with nearly limitless information accessible anytime without boundaries. Global inspiration in travel, culture, fashion, sports and music is the norm for them. As a result, they crave diverse, global, regional and communal food experiences, flavors, fusions, brands and products. The rise of food trucks, food as story, the farm to table movement and the DIY foodie culture are all trends that have been led and first adopted by Millennials. Although Millennials are an economically-challenged group, they have demonstrated willingness to spend on food and food-related experiences. However, they are very discriminating about how and where they spend . While they’ll try anything once, they are hard to keep coming back. To them, food is an entertainment experience. It represents community and self-expression. The brand choices they make are those that

speak to their values.


SIGNS OF SHIFTS Restaurant visits by Millennials have fallen 16% over the past four years

Fast food still gets 28% of Millennial share of eat-out wallet but the destination is changing

33% of Millennials consume rice, almond or soy milk at least occasionally

21% of Millennials have attended a food festival. 42% go to farmers markets.

“I don’t really eat at chains. I get local advice on chefs, preparation and dishes so that I know exactly what I’m eating.” - R. US Millennial


2

INGREDIENT SCRUTINY

Millennials are the first generation to grow up with allergy and dietary sensitivities and are used to accommodations for complex dietary requirements. As a result, they have been trained to be hyper-vigilant about what they are consuming and choiceful in their product selections. They scan labels and will Google what they don’t recognize. Not only do they want to know what’s inside, but they want to understand how that mix of ingredients contributes to nutritional benefit or performance. They want to know that every ingredient contributes something meaningful.


Millennials want to remix and reimagine everything and this extends to packaging and nutrition labels. Several organizations have run contests to rethink nutritional labels. Although the designs are different in the specifics, infographic and gamification influences are a common thread. Millennials’ perceived shortcomings of the current nutritional label: - Not visual enough - Doesn’t reveal enough about contribution of each ingredient and why it’s there (“I want a health impact score to know if it’s really performing as it claims.” - Doesn’t give a sense of the quantity of ingredients to tie back to claims (“It may say made with real fruit, but is it 1% or 90% fruit?”) - Doesn’t tell you the degree to which ingredients are processed - No consistency of organic-ness - Doesn’t provide a measure of healthfulness - Doesn’t tell you if it exceeds strict vegan / vegetarian / kosher or other dietary restrictions Millennials gravitated to and designed their own nutritional label redesigns that addressed these shortcomings as well as augmented nutritional information with social and environmental impact metrics.


3

TOUCHY & REAL

Postings against Monsanto have become a common sight in social media. Millennials are outing companies and organizations that they feel are not coming clean about the foods they touch. Genetically-engineered foods, the use of chemicals and processing have become currency of discussion among the Millennial foodie crowd. This suspiciousness of “big food� has led to a rise in following of those organizations and brands that seem more real, transparent and open about what’s inside their products, where they come from and how they made.


Millennials are choosing cooked-to-order foods, semi-customized ‘kits’ and DIY assembly or cooking over pre-made and pre-packaged. Perceived-healthy, resealable convenience foods requiring little preparation remain popular grocery choices as do foods and beverageswith-benefits such as the calcium-fortified Greek yogurt or premade antioxidant smoothie.

“I may be on a budget. But I’d rather spend a little more and know exactly what I’m eating.” - P., US Millennial

A similar pattern also shows up in restaurant sales data, Millennials are still spending on fast food, but shifting their dollars. Dollars are moving away from McDonalds, Burger King and Taco Bell. Taking those dollars are chains that enable visible semi-cook/assemble to order from fresh ingredients – Chipotle, Subway, Five Guys and the like.


4

PROCESS TRANSPARENCY Millennials are socially conscientious and want to know where their food comes from. They like origin stories whether it’s farm or chef, having an ingredient backstory and a sense of being brought into the process. Organic, vegan, minimally-processed, clean/green, socially-conscious production are all claims that appeal to them and they seek out. However,

Millennials are impatient with talk and demand demonstration of claims and values in action. They value brands that live what they profess and provide transparency.

Millennials will listen to claims as long as you back them up by letting them into the process. While there is an economic cap on the premium Millennials are able to pay, claims can be differentiator and shift buying preferences IF they are demonstrated in action, reported on and brought to life in a meaningful way. Millennials like tracking their food from farm to table and having a window into the entire process. Millennials are extremely price-conscious and conscientious about how they spend their food dollars. They are willing to trust, provided brands “show me where my food really comes from.�


While Millennials may love the idea of Trader Joe’s and Whole Foods, the reality is that many of them remain a Walmart-primary shopper. However, there is evidence that they’re willing to put their wallet where there heart lies—Millennials are conscious purchasers willing to spend a little more for honesty, quality and production integrity. Sales of organic/hormone-free milk, yogurt, fruits and vegetables are increasing – as is shelf space and facings dedicated to them. A 2012 MIT study found that ‘fair labor’ labelling of apparel had a positive effect on sales for Gap. Transparency and adherence to communicated code of conduct is important for CPG too.

82% of consumers say ingredient and process transparency is an important or very important factor in product choice.* Millennials have access to more unfiltered information and opinions than any preceding generation. As a result, they are more educated about their options and are looking to understand the origin of ingredients, manufacturing and process conditions throughout the production journey, labor and animal treatment practices. To Millennials, honesty is the single most important factor to consumers in brand reputation. * 2012 NY Times business.


5

TEMPERED INTENSITY

Millennials know they’re picky foodies on a budget. For that, they make no apologies and take no prisoners. However, they do have a sense of humor about it. Even more traditional and highbrow gastro-pubs such as Saveur Magazine recognize fresh Millennial voices in food blogs as influential and meaningful. Thug Kitchen which is a profane call to more healthy, flavorful and mindful eating habits was recognized as best new food blog of 2013. The popularity of Thug Kitchen’s Tumblr and other distinctively Millennial foodie views have exploded in popularlity and views online. Even Rachael Ray and Gwyneth Paltrow are fans because while the blogs aim to entertain (and shock), they provide a point of view that a passion for cooking and good eating isn’t just a privilege or pursuit for those with disposable incomes.


A sample of Thug Kitchen’s “vegan-gansta” call to arms.

Fan-created ‘World Nutella Day’ was all fun and games until Fererro sent a cease-and-desist letter generating a social media storm of outrage.

Millennials want to play with brands. They’re looking to have a conversation with you, not be considered your audience.


6 THOUGHTSTARTERS FOR FOOD/BEV BRANDS 1

Put a unique spin on the package. Differentiate the brand from a sea of sameness by providing clear product information in the way Millennials want to see it.

2

Take a DIY or partial customization perspective. Food and beverage brands that enable Millennials to play will trump pre-packaged options.

3

Tell an ingredient story. Stand out by providing clear value-add benefits by showing what each part contributes to the whole’s nutritional performance.

4

Build trust by opening your doors. Give Millennials access to the backroom, the factory floor or the farm to show the process. Provide meaningful metrics for claims and statements. Prioritize show over tell.

5 6

If you mess up, own it. Millennials accept imperfections and mistakes as long as you’re accountable in communication and actions. Recognize that Millennials are seriously passionate about the economics of eating well without compromise. Don’t take yourself too seriously—they appreciate passion delivered with personality and punchiness.


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