One Generation is Revamping the Food Industry
Millennials, the demographic generation following Generation X, have begun to make an impact across a wide segment of industries. As the growing consumer, millennials are actively engaged in changing the strategy in which businesses operate. To date, millennials make up half of the U.S. workforce making them a key demographic for retailers looking to capture a growing market.
Millennials take a seat at the (dinner) table
Now, they’re hitting closer to home as they seek foods that are local, organic and unprocessed. This new call-to-action has left larger food distributors to re-evaluate their distribution strategy to market to today’s growing buyer.
The stakes are high for food distributors
Why are grocers beginning to take notice? The staggering figures have required businesses to examine the potential hit on their bottom-line if they don’t adjust their strategy.
A study conducted in November 2016 by Maru/Matchbox found that millennials are more likely to value features such as “GMO free” and “locally sourced” as compared to older generations. More than three-fifths surveyed also stated they are willing to pay more for organic, natural, sustainably and locally sourced food.
By 2020, millennials over age 25 will make up nearly 20 percent of the U.S. population. The spending power of these 64 million consumers will rise, with the average household income expected to reach $45,000. Overall, millennials’ spending on at-home food will increase by $50 billion per year through 2020. On the flip side, baby boomers will fall to less than 20 percent of the national population during this time. Additionally, there at-home food spending is projected to drop by as much as $15 billion annually through 2020 as they become more reliant on fixed incomes after retirement.
Distributors who can’t adapt will be roasted by competitors
Millennials desire for GMO free, locally sourced and organic food is creating a profitable opportunity for smaller businesses but will inevitably grip larger brands who are engrained in providing customers with pre-packaged selections. While some distributors are seizing the opportunity to cater to their new buyers, others are finding challenges along the way that obstruct their efforts.
So, what can you do to move towards a more enticing brand that attracts the key demographic? Start with the supply chain by asking yourself the following questions:
1. Is our product line evolving to meet the millennial shift?
2. Are we incorporating new suppliers who can help us meet this new requirement of locally sourced and organic options?
3. Can our transportation network accommodate the increase in refrigerated and frozen shipments?
The change today and in the future is one that will continue to wreak havoc on a transportation network that cannot adapt to change. Talk to us about how can help you get there with more efficiency and transparency. Our Transportation Management System (TMS) will help you better manage your transportation network to meet the needs of today’s consumer through real-time data, automation and stronger visibility.