Why food retailers have a millennial problem

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Why food retailers have a millennial problem

By Gina Acosta - 01/04/2018

Millennials are demanding more fresh food but shopping less at grocery stores, according to a new report from the USDA.

The December 2017 report, “Food Purchase Decisions of Millennial Households Compared to Other Generations,” by Annemarie Kuhns and Michelle Saksena shows that millennials are spending more time buying ready-to-eat meals, less time at food retailers, and are less interested in meats and starches than other generations.

The study looked at spending patterns of traditionalists (born before 1946), baby boomers (born 1946-65), gen X (born 1965-80) and millennials (born between 1981 and 1996).

The data show that millennials frequent food retailers the least of all generations. Higher income (per capita) seems to reduce the frequency of food store trips as well. Traditionalists, who spend more on food at home (FAH) per capita, frequent food stores more often.

Millennials consume food in a restaurant or bar around 30 percent more often than any other generation. 

Wealthier households tend to buy more primary/unprocessed ingredients, reducing their purchases of processed foods and starchy carbohydrates like pasta and increasing their purchases of fruit and vegetables. Millennial households with lower per capita income have a greater tendency to make more FAH purchases than do higher income millennial households.

Among all generations, millennials devote the smallest share of food expenditures to grains, white meat, and red meat, the report says. 

When partitioning by income per capita, fruit expenditure shares for millennials essentially matched those of traditionalists, who allocate the largest share to fruits. Moreover, as millennials become richer, they apportion more of their FAH budget to vegetables, suggesting that the millennial generation may have a stronger preference for fruits and vegetables compared to older generations.

The report also shows that millennials spend, on average, 12 minutes less eating and drinking than traditionalists, who devote the most time toward those activities at 77 minutes per day. However, all four generations spend essentially the same amount of time in secondary eating (i.e., eating a snack while watching a movie).

Millennials, however, spend significantly less time on food preparation, presentation, and cleanup—55 minutes less than Gen Xers, who spend the most time at 143 minutes. This time observation supports the finding that millennials purchase more ready-to-eat foods; nearly two-thirds of Millennials reported buying some form of prepared food within the prior 7 days, suggesting a preference for time savings.

“Recession millennials” purchase more FAH overall than “non-recession millennials,” even when they have similar incomes. This difference in purchasing behavior may be attributed to changes in earning trajectories due to the recession. However, when comparing higher (per capita) income recession and non-recession millennials, their food spending patterns (FAH and FAFH) are similar, suggesting that the recession may have only affected lower income and middle-income “recession millennial” food shopping behaviors. This could be because higher income millennials were less affected by the recession or were wealthy enough to maintain food purchasing patterns.

The study was conducted using various surveys and stats, including one survey drawing from 116,000 distinct households across the United States. The report also used statistics from the American Time Use Survey (ATUS) and the Healthy Eating Module, 2014, on time use associated with food consumption, preparation, and purchase. The survey includes data for nearly 25,000 individuals selected randomly from a subset of households that participated in the Current Population Survey (CPS).

 

To read the full report, click here.