Millennial 'Buyer's Guide' (Part 1)
What are the CPG habits of 18- to 34-year-olds, and just how influential is this group?
Published in CSP Daily News
[Editor's Note: This first of three installments provides an overview of new research on millennials' CPG buying habits. The second and third installments will look at beverage and food consumption, respectively.]
CHICAGO --High-income millennials are proving elusive for many of the major consumer packaged goods (CPG) categories. But high-income millennials may also be the key trendsetters. In a new report, Consumer Staples: Understanding Millennials as They Enter Their Buying Years, Vol. 1, Nik Modi, U.S. beverages, household personal care and tobacco analystfor RBC Capital Markets, Chicago, analyzes changes in purchase behavior among beverage, food, and household products categories, brands and companies.
"We believe that the changing consumer product usage of 18- to 34-year-olds provides not only a sense of the relative economic fates of young adults, but also a window into the values of the millennial generation," said Modi. "These changing values and preferences present long-term opportunities and challenges for leading consumer products companies."
It has been easy to point to economic forces as a reason for shifting consumption of the under-35-year-old crowd. And it is true that more under-35 year olds are lower income today than a decade ago; however, there are also more high-income millennials--and it is among these high-income millennials that the biggest buying pattern changes have occurred. These consumers are highly influential and arguably the most attractive consumer base.
Over the last five years, they are seemingly walking away from many CPG categories while seeking out a lucky few.
Key points from the research:
- High-income millennials are cutting back relatively more on major processed food categories.
- Convenient meals are under attack.
- Carbohydrate avoidance is at the core of different diet goals.
- Wine, whiskey and vodka are millennial favorites.
- Millennials help drive a near 1:1 tradeoff between carbonated soft drinks (CSDs) and energy drinks.
Recent Nielsen studies cited by the report have shown that millennials make fewer shopping trips per year (see bar chart), but generally spend more than other generations per trip. Millennials also use certain channels, such as the drug store channel, more than other generations. Millennials have also been found to spend a greater percentage of their dollars on deals.