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Millennials transforming the food industry: ReportFriday, March 03, 2017 > 09:07:40
Younger consumers are increasingly supporting smaller brands and willing to pay more for premium features
Millennials are “rewriting the script” for the food industry, according to a new report from Chicago-based market insights firm Maru/Matchbox, with big food companies increasingly playing a smaller role.
The report, The Future of Food: Are You Ready for the Millennials?, finds 18-34 year-olds are more likely than older consumers to value food features that are traditionally regarded as premium, such as “GMO free” and “locally sourced.”
Millennials are willing to pay more for these premium products, with more than two-thirds of respondents (68%) saying they will pay more for organic foods and 66% saying they will pay more for sustainable foods.
Matt Kleinschmit, managing director of consumer and shopper insights at Maru/Matchbox, says millennials are increasingly willing to support brands and products that address their preferences for authenticity, transparency and responsible ingredient sourcing.
The report says such thinking and behaviour is spurring the growth of premium food and beverages costing at least 20% more than the average category price. The study cites a Nielsen report that finds the premium end of the U.S. food market rose 8% in the year ending April 2, 2016, compared with 3% for the category as a whole.
It says smaller food companies are the beneficiaries of the shift in consumer perception, with the 25 largest food and drink companies driving just 3% of the category growth from 2011 to 2015, while companies below the top 100 drove nearly half the growth.
More than one-third of millennials say their trust in smaller brands has increased, compared with 18% of people 55+.
Elsewhere, a report by eMarketer says so-called “food giants” are buying smaller, startup labels in order to earn credibility and authenticity among younger people.
Nearly half of millennials (43%) say they will buy all their food online if possible, compared to 14% of people 50 and over. The report says ecommerce is opening the door to increased choice, smaller brands and manufacturers, as well as local suppliers.
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