Analyst: Millenials not eating as much sugar, grocery sales flat
August 11, 2014 | 04:33 PM
STOWE, Vt. — American “Millenials” — people born between 1977 and 1994 — are eating less sugar than older generations, while overall grocery sales are flat, a key consumer industry trade analyst said here last week at the American Sugar Alliance’s annual International Sweetener Symposium.
Todd Hale
In a statement that would probably make nutritionists cringe, Todd Hale, the senior vice president for consumer and shopper insights at the Nielsen Company said that Millenials are “underdeveloped” in sugar consumption and asked the assembled beet and cane growers, “As an industry how do you create demand among the younger generation?”
Their consumption patterns are important, Hale said, because Millenials will outnumber baby boomers by 10 million people in 2020.
Millenials spend only $18 per year on sugar and sugar substitutes, compared to Nielsen’s categories of Greatest Generation (born in 1945 or earlier) spending $23, Baby Boomers (born 1946 to 1964) spending $24, and Generation X (born 1965-1976) spending $22, he said.
In addition, he noted that Millennial consumers spend less on candy, jams, jellies, spreads, bread and baked goods, cookies, ice cream cones, juices, drinks and refrigerated beverages and ice cream than the other three generational groups.
But Millenials spend more than the other generations except Generation X on cereal, which probably reflects their preference for convenience foods. And they spend more on carbonated beverages than the Greatest Generation but less than boomers for Xers and more on juices and shelf-stable drinks than Greatest Generation, boomers but less than Xer consumers.
But the most extraordinary difference is that they spend only $27 on ice cream compared to the Greatest Generation’s $42, the Boomers’ $40, and the Xer’s $38.
To a degree, the lower spending reflects the Millenials’ lower spending on everything because they have been hurt the most by the Great Recession, Hale said.
He also noted that Millenials, more than any other generation, want “deals” when they go shopping.
Millenials “want smartphones, but then watch their pennies,” Hale noted.
But certain brands such as the Chipotle restaurants are doing well because Millenials like fresh food. The new trend, he added, is purchases of fresh food to be prepared quickly rather than buying frozen foods.
Millenials shop less frequently than older generations, but buy more at one time, he added.
Overall, grocery sales are flat due to the recession and to the lowest level of population growth since 1937. The value of sugar sales has dropped due to falling prices, he added.
“It is really hard to drive volume in this economy,” Hale said. “There are still a lot of issues facing consumers, mostly bad news than good news.”
But the stores that have done better are the ones appealing to higher income consumers. The cut in food stamp benefits that occurred in November 2013 when the higher benefit levels under the Recovery Act expired has hurt sales in stores that appeal to lower income people.
The “value orientation” works well for both higher and lower income people, he said.
“Poor people need low prices, rich people love low prices,” he said, but when the rich go to Costco, they buy premium products.
“I‘d like to see manufacturers spend a lot less on trade promotions and more on cooperation with retailers,” Hale said. “Whole Foods does better,” he noted, while “mass retailers are struggling.”
The centers of grocery stores, where staples are sold, have “not changed since cave man,” and they need to change, Hale contended. Stores have made the perimeters of their stores more interesting, he said, even adding full-service restaurants, but those sales are hurting sales in the center.
Other trends Hale noted include:
Consumers worldwide are growing more and more concerned about sustainability, Hale said. Europeans have focused more on sustainability than Americans, he concluded, but younger Americans are acting more like the European consumers.
In a statement that would probably make nutritionists cringe, Todd Hale, the senior vice president for consumer and shopper insights at the Nielsen Company said that Millenials are “underdeveloped” in sugar consumption and asked the assembled beet and cane growers, “As an industry how do you create demand among the younger generation?”
Their consumption patterns are important, Hale said, because Millenials will outnumber baby boomers by 10 million people in 2020.
Millenials spend only $18 per year on sugar and sugar substitutes, compared to Nielsen’s categories of Greatest Generation (born in 1945 or earlier) spending $23, Baby Boomers (born 1946 to 1964) spending $24, and Generation X (born 1965-1976) spending $22, he said.
In addition, he noted that Millennial consumers spend less on candy, jams, jellies, spreads, bread and baked goods, cookies, ice cream cones, juices, drinks and refrigerated beverages and ice cream than the other three generational groups.
But Millenials spend more than the other generations except Generation X on cereal, which probably reflects their preference for convenience foods. And they spend more on carbonated beverages than the Greatest Generation but less than boomers for Xers and more on juices and shelf-stable drinks than Greatest Generation, boomers but less than Xer consumers.
But the most extraordinary difference is that they spend only $27 on ice cream compared to the Greatest Generation’s $42, the Boomers’ $40, and the Xer’s $38.
To a degree, the lower spending reflects the Millenials’ lower spending on everything because they have been hurt the most by the Great Recession, Hale said.
He also noted that Millenials, more than any other generation, want “deals” when they go shopping.
Millenials “want smartphones, but then watch their pennies,” Hale noted.
But certain brands such as the Chipotle restaurants are doing well because Millenials like fresh food. The new trend, he added, is purchases of fresh food to be prepared quickly rather than buying frozen foods.
Millenials shop less frequently than older generations, but buy more at one time, he added.
Overall, grocery sales are flat due to the recession and to the lowest level of population growth since 1937. The value of sugar sales has dropped due to falling prices, he added.
“It is really hard to drive volume in this economy,” Hale said. “There are still a lot of issues facing consumers, mostly bad news than good news.”
But the stores that have done better are the ones appealing to higher income consumers. The cut in food stamp benefits that occurred in November 2013 when the higher benefit levels under the Recovery Act expired has hurt sales in stores that appeal to lower income people.
The “value orientation” works well for both higher and lower income people, he said.
“Poor people need low prices, rich people love low prices,” he said, but when the rich go to Costco, they buy premium products.
“I‘d like to see manufacturers spend a lot less on trade promotions and more on cooperation with retailers,” Hale said. “Whole Foods does better,” he noted, while “mass retailers are struggling.”
The centers of grocery stores, where staples are sold, have “not changed since cave man,” and they need to change, Hale contended. Stores have made the perimeters of their stores more interesting, he said, even adding full-service restaurants, but those sales are hurting sales in the center.
Other trends Hale noted include:
- More snacking, more eating small meals.
- More fresh produce sales driven by health and wellness concerns.
- Gum is “losing relevance and demand.”
- Cereal overall down because frozen breakfast and yogurt are nibbling away at it.
- Deli meals up 7 percent as people buy fresh foods they can consume readily.
- Fresh-baked goods doing well because consumers perceive them as fresh even if they are made from frozen dough.
- Canned goods industry fighting back with a “can do” campaign.
- Private label brand sales flat after taking off in 2008 and doing well in 2009, but brand labels fought back.
- Organic foods continuing to grow, with Walmart and Wild Oats selling cheaper items.
Consumers worldwide are growing more and more concerned about sustainability, Hale said. Europeans have focused more on sustainability than Americans, he concluded, but younger Americans are acting more like the European consumers.
