Quick Stats

Quick Stats

    You are here

    Are Specialty CPGs Becoming the Norm?

    How digital natives are driving these purchases

    By Phil Dance, Alter Agents

    While most brands and retailers recognize the power and influence of the Millennial generation, it’s worth taking a closer look at their purchase drivers and processes. From doing their research – on every front – to buying based on social factors, this generation is changing the way consumerism works from the inside out.

    Millennials are keenly aware of the information available to them and feel pressured to make the right choice when making purchasing decisions. Today, there's a plethora of options in the specialty foods segment – from craft beer to Greek yogurt to BFY salty snacks – and vast amounts of information available via digital and mobile tools. This generation wants to feel confident about decisions. In fact, when shopping for CPGs, Millennials (ages 18-34) use, on average, 14 sources of information prior to making a purchasing decision. This is nearly twice the number of sources being used by those in the 35 and over age group, who use eight sources. Consistent across every category – from apparel purchases to electronics to shampoo and QSR restaurants – this trend holds true for CPG and this group’s grocery shopping journey.

    Across every shopper journey study we have conducted in the last six years, Millenials are looking for more information and using more diverse channels to find that information. Our assumption at the start had been this generation would gravitate to online at the expense of traditional media. That just isn’t the case. Yes, they are much more likely to find a user-generated video on YouTube, but they are also more likely to watch TV advertising. This tells us that digital is not replacing traditional media, but rather supplementing it, and being given equal weight. Whereas the older generation of shopper might dismiss a user-generated video about a product, a Millenial would give it more weight than an ad campaign. Because it's so easy to gather information, Millenials feel compelled to source all information before making a purchase. This isn’t because they are risk-adverse. Millenials yearn for new experiences and products. They are looking for validation and confirmation.

    This plays out in the amount of research Millenials will do before purchasing even in categories perceived to be low-involvement like CPG grocery (which it is definitely not). Our Shopper STAT syndicated product interviews for 1,000 people every week who have bought groceries in the past 24 hours. The survey deconstructs what they intended to purchase, what they actually purchased, and what happened in between.

    Looking at that data, we see:

    • 47% of Millenials look for product recommendations and suggestions before buying (vs. 31% of older generations)

    • 57% love to be the first to know about new products (vs. 42% of older generations)

    • 64% like to browse aisles to discover new products (vs. 55% of older generations)

    Gourmet and specialty foods are defined as products of premium quality that may be made by small or local manufacturers, and contain the best available ingredients. Millennials actively pursue information on packaging to identify product origin and other details like nutritional information. The top factor influencing specialty food purchasing decisions is taste, but the opportunity to try something new based on a referral from family and friends also are important drivers. This also plays a large part in their determining whether or not the product is worthy of the premium.

    Product trials are also extremely influential among Millennials, especially in specialty categories. They currently look to their friends and family members for these opportunities. When asked what information sources are most important, 47 percent of Millennials listed retail, recommendation from friends/family and online social sources (blog posts, online and video reviews). This contrasts sharply to their older counterparts, 26 percent of whom chose retail sources only.

    With specialty goods, purchasers are also paying a premium. Millennials are just as likely to use a coupon for their purchases as their older counterparts. The only difference is that they typically download e-coupons from the store’s app online – no paper clipping and filing done by this tech-forward demographic.  

    Ultimately, Millennials purchase specialty foods for snacks and on-the-go meals, while generations like the Baby Boomers are more likely to buy gourmet items for everyday cooking. Of those who buy specialty foods, they also consider factors such as sustainability, local sourcing, and certifications such as organic, gluten-free or kosher items.  

    Related Content

    Related Content