Millennials have quickly taken on an influential role in our consumer market. The Millennial Mindset® has expanded beyond just the generation born between 1977 and 2000 and has now been adopted by consumers of all ages. Millennial behaviors such as hyper connectivity, content consumption, creation and curation, the belief in inclusivity and fairness and a thirst for affordable adventures are impacting the way not just millennials, but also consumers who may not be a millennial as defined by their age, interact with the world and with the brands that engage them most. Not to be looked over, however, is how these millennial behaviors are influencing the way consumers think about food.
As a generation that is quickly guiding the trends seen in the general market, brands in the food space must prepare for millennial behaviors and attitudes regarding the way they eat, research and shop for their food. The traditional food value equation is rapidly changing in order to keep up with the modern consumer. Millennials will only interact with brands that are open and transparent, stand for more than their bottom line and address environmental and socioeconomic issues in the community. Those that don’t align with these values will be quickly replaced.
Because of these unique preferences, millennials are shifting the value equation for food. An equation that once allowed consumers to perceive food value based on taste, convenience and price is now more complex; flavor adventures, uniqueness, authenticity, innovation, convenience, portion size, nutrition, packaging, transparency, price, conscious capitalism practices that translate into purpose and supply chain management are among the many factors millennials are considered in the new value equation for food. Ultimately, greater access to brands has expanded the factors that contribute to the food value equation exponentially.
Innovation IS Part of the Equation
In order for a brand in the food space to maintain momentum, innovation is key. However, innovation is difficult. According to Nielsen, only 10 percent of new products succeed. This explains why the stakes are so high for CPG and food brands to invest in true innovation. Let’s face it, if innovation is not the primary goal, either another CPG will create a better product, or a retailer will take this on and deliver it directly to consumers in their stores.
Here are four steps to consider when developing your innovation strategy for private brands:
Step 1: Better understand your consumers need states
Need-states are not simply eating occasions. Rather, they identify a more emotional and participative need that your category satisfies. Need-states could include: connections, fuel up, recovery, self-reward and self-expression. Ask yourself; do you really understand the emotional reasons consumers are buying? If not, consider a need-state study. A need-state study not only identifies the larger emotional territories for consumption in the category, but you can then determine which product segments best fulfill each need- state. Consumers tend to migrate to different product segments in a category depending on their needs.
Step 2: Identify what type of innovation your brand is striving for
Look at your category sales and see what is happening when a name brand is on sale vs. when a private brand is on sale. If sales are just being traded out, there is no value being added to the category. Brands should start striving for more breakthrough innovation. This requires looking at consumer and cultural trends that your category could capitalize on. Think about where the category could be in three years based upon trends happening today. These up-and-coming trends should fuel your new product development strategy.
Step 3: Crowd sourcing innovation
Inspiration for new products may be right at your fingertips. Many brands fail to realize the power that online conversation has on Millennial Mindset® consumers. When looking to innovate, spend time abstracting insights from social media platforms. Some of the best ideas can be found from actively monitoring conversations online related to your product category and brand. This is not only the most effective way to engage current and potential consumers, but it is also a cost effective way to bring new insights into the creation phase of a new product.
Step 4: Test all products with all potential users
Consumers in the kitchen are becoming tired of acting like short order chefs creating multiple dishes that must appeal to a variety of different taste preferences at the dinner table. Three factors come into play:
- Time and effort – it takes too long and too much extra work to prepare foods just for the picky eater in the household.
- Money – having to buy extra food to appeal to a variety of different preferences costs more and Millennials are already cutting back on other needs to pay for groceries.
- Waste – as previously mentioned, waste is the enemy of any homemade chef. Millennials are unhappy when food goes to waste because the dish was disliked or not eaten as leftovers.
Families will come to appreciate products that are loved and enjoyed by THE ENTIRE dinner table. Many times we short change the product experience, only doing taste tests with the primary shopper, not the end users within a household. If you are making a product consumed by the entire family or by spouses and friends, test the concepts and taste profiles with the larger audience. You may win over the purchasers, but repeat will be impossible if the end consumers don’t love it too.