The Gen Y Factor: Bye Bye Gen X!
The millennial generation is one of the fastest-growing consumer groups in North America
At this time of the year, when a good part of 2014 new products have been rolled out, one would be wise to remember General Mills CEO Kendall J. Powell’s words on the influence this powerhouse would have on innovation this year: “We continue to focus on product ideas that appeal to the fastest-growing consumer groups. In the U.S., these are older adults, the millennial generation and multicultural families.” If we take this statement word for word, it means: bye bye cash-strapped Generation Xers, welcome to the market Generation Yers!
The reasons for this shift are more than convincing: Gen Yers account for 1.8 billion of the population; they will outpace boomers earnings by 2018; they will represent 75 per cent of the workforce by 2025; and 75 per cent say they influence purchase decisions of others, according to Edelman’s 8095 Exchange, a global benchmark study on millennials. And yes, although they are very sensitive to price, 73 per cent say they are willing to pay more for desirable attributes, such as organic.
So, in terms of lifecycle, boomers are getting older and are mostly empty nesters by now, Gen Yers are starting a family or living as a young couple or young single on the move, and Gen Xers are full nesters where older kids are teenagers. Let’s take a look at the Food Should Taste Good guacamole flavour line extension – this bag of chips would rapidly be empty if teenagers (the children of Gen Xers) got their hands on it. On the other hand, it’s perfect for singles and young couples, both Gen Y and boomers, looking for a different chip experience. How about Fiber One getting into new-age snack bars, or the Larabar – not so long ago positioned as an alternative energy bar – going crazy for nuts in a sweet and salty way. Two very similar products, two different targets.
At Kraft, there is no doubt that new trends like increased snacking, a demand for simpler ingredients, higher protein and fewer processed foods, and a heightened interest in sourcing transparency – mostly driven by the younger generation – drive innovation. As Tony Vernon of Kraft Foods Group told the Consumer Analyst Group of New York Conference (CAGNY) last month, “We’ve used these trends to inform our fewer, bigger, better new products and Big Bets for 2014.”
Gen Xers will find choices, but they may not march to the beat of their own drum.
Louis Giguère, M.Sc., is vice-president, Innovation and Commercialization, for Enzyme, the Food and Health Agency. Contact him at LGiguere@enzymefh.com