KANSAS CITY - It’s no secret that the younger generations shopping the supermarket (millennials and Gen Z, those under 35) have very different expectations from their older generation counterparts (Gen X and Baby Boomers).

Members of Gen Z—the oldest of which are 23 or 24 and just heading out on their own for the first time— and younger millennials have always known a digital society that can be easily personalized to fit each individual’s needs and desires, pointed out Jonna Parker, principal of Chicago-based IRI’s Fresh Center of Excellence.

“From their early lives, [millennials and Gen Z] could get what they wanted from the fashion industry or the tech industry,” Parker said. “They’re used to a rapid pace of change, especially from consumer goods. And yet, I think there’s a disconnect with those expectations in the grocery industry, because the entire infrastructure of that industry has not historically changed.”

The changes brought on by the coronavirus pandemic, however, have a chance to serve as the best strategy going forward for reaching younger generations:

  • Even before COVID-19 hit, younger shoppers have been more inclined to want transparency, sustainability and ethics applied to the brands they buy. The events of 2020 have brought all of those trends to the forefront, and continuing that emphasis will help attract Gen Zers and millennials.
  • Millennials and Gen Z have also been historically driven to purchase better-for-you items that appeal to health, wellness and mindfulness. COVID-19 has brought awareness to the products that fit that bill as consumers try to support their immune systems, as well as mental health.
  • Since March 2020 online grocery sales have boomed, hitting numbers that were projected for 2025, five years in advance. Before the pandemic hit, members of Gen Z and millennials were already shopping online more than older generational cohorts, a lead that has grown due to COVID, and has the potential to keep trending if retailers keep the trend viable.
  • COVID-19 has also shifted patterns for Gen Z and millennials. A year ago, younger consumers were more likely to go out to eat; now, as restaurants have limited capacity due to the virus, even the youngest shoppers are buying food to prepare and eat at home.

There are lots of opportunities for fresh departments to use the changes of 2020 to reach their younger shoppers. It’s up to retailers to keep the momentum going.

A generation cooking at home for the first time

Since the start of the pandemic, IRI has noted that 83% of all meals in the United States are prepared in the home. For young consumers — especially those belonging to Gen Z — this is the first time many have had to prepare their own meals, leaving a big opportunity for retailers to step in to help.

“This entire generation of new cooks desperately need solutions, ideas and inspiration,” said Parker. “It’s been a really exciting demographic to watch in categories like raw meat and dairy where they might not know what makes grass-fed beef different from conventional. When you go to the store you’re faced with this wall of meat and have to read all of the labels to figure out what everything is. Retailers can help products resonate by helping customers connect those dots across the store to form their plate.”

Cross-merchandising, recipes and meal ideas are also particularly helpful to this generation of shoppers. For two generations always on the go, convenience is key, noted Darren Seifer, New York-based NPD Group’s food and beverage industry analyst.

“Everyone’s been making more meals in the home,” said Seifer. “So what consumers, Gen Z and millennials, are looking for right now are meal solutions. Gen Z, especially, is very much in that life stage where they are possibly going into their first home and they don’t have that mental cookbook.”

Not only have younger people been cooking more in the home, but they have also been buying more appliances—crock pots, instant pots, indoor grills, air fryers, etc.— to make cooking at home easier and more exciting. Seifer recommended that retailers pay attention to what appliances their customer base is taking advantage of, and push product bundles that can be prepared with those appliances.

The popularity of meal kits has also shot up with younger generations. Overall, Seifer pointed out, 10% of adults have used a meal kit in the last month. An elevated 14% of consumers belonging to younger generations have used a meal kit in the last month.

Seifer noted that grocers have an opportunity to put together their own meal kits—made up of a protein, a veggie and a starch— more efficiently than meal delivery companies because there are so many options already at their disposal.

“If we think about it, if that consumer walks into the store and the first thing they see is the meal kit, right off the bat that answers the question of what’s for dinner. So, it helps transform the store and also provides a solution.”

Telling a story

The main driver behind purchase decisions for millennials and Gen Z, isn’t price, it’s transparency and personalization.

In fact, even amid the pandemic, young shoppers are more likely to visit multiple stores to find the product they want, noted Shelley Balanko, senior vice president of the Bellevue, Wash.-based Hartman Group.

“Some might say the pandemic actually accelerated their interest in buying with purpose,” said Balanko. “The pandemic showed us the very tenuous nature of the global supply chain. And then of course, with the eye toward social injustices and biases in our society, it’s the younger generational cohorts who are paying attention to this and feeling mobilized to purchase in a way that makes a difference.”

Balanko noted that the fresh departments have the biggest opportunity to engage with young customers and tell the stories they’re looking for. The easier it is for young shoppers to find out more information about specific products, the better.

Parker suggested using signage—or for online shopping, web page callouts — to highlight specific product attributes. She noted that some retailers have even started separating items into sections based on diet trends like paleo and keto. But instead, Parker recommended calling out diet attributes, so shoppers are not tied down to one eating style at a time.

While fresh products can help millennials and Gen Z meet their eating goals, Parker pointed out that the frozen department has done a better job of playing up to younger generations’ needs and desires and fresh departments should take note.

While changes don’t come often in the fresh department, frozen foods are constantly evolving with various assortments to cater more to the individual than the masses, which resonates with young shoppers. In the frozen section there is more of a variety of serving sizes and flavors, and the packaging is often far more descriptive than most fresh item packaging.

Retailers can help close this gap by making information about fresh products more easily available, whether through signage or even QR codes, which this technologically fit generation can quickly pull up on their phones. And fresh foods already have the advantage of being much easier products to be transparent with.

“Gen Z, especially, is incredibly well educated, incredibly open and interested about finding out information for themselves,” Parker said. “I’m already seeing it with Gen Z, transparency, storytelling – behind the farmer or the reason for the product to be on that shelf, the creation and the feel-good aspect—the fresh food industry naturally has those stories that would be fantastic for retailers and fresh suppliers to tap into.”

Health and wellness

The fresh perimeter is particularly poised to engage with younger consumers and cater toward the benefits they want from their foods: health and wellness. Seventy-one percent of millennial and Gen Z shoppers look for foods with healthful benefits whether that be foods that help with eating in moderation (70%), are high quality (66%), have specific benefits for the body (63%) or are holistic (61%).

“One thing the pandemic has really done for all consumers is highlighted the importance of eating for wellness,” Balanko said. “And when I say eating for wellness, for younger consumers in particular, they define wellness most holistically. For them issues around stress and anxiety are more salient than say chronic conditions.”

Balanko noted that telling a holistic wellness story goes back to being transparent. Products that are sourced more intentionally, sustainably and ethically seem inherently healthier, whether they actually are or not.

According to Balanko’s research, younger generations consistently index higher on searching for foods that are organic, free-from, sustainably produced, locally made and ethically sourced.

When it comes to deciding which product attributes to highlight, Balanko suggested using blanket terms to help items appeal to different generations for different reasons. For example, let the organic product attribute tell the Boomer that the product will be better for helping them avoid various cancers, while the millennial interprets the attribute as buying that product is doing something for the greater good in terms of environmental sustainability.

“We often say the days of groceries being all things to people are gone, right?” said Balanko. “But we do believe that you can still speak to a broader swath of folks if you really just focus on the product attributes and let them infer the benefits that are relevant to them..”

Moving past COVID

Over the last year, coronavirus has quickly accelerated the trends most relevant to young shoppers, but will those changes in consumer habits stick around? It all depends on what the industry does next, Parker predicted.

By May 2020, 40% of Americans reported buying groceries online within the last three months, almost double the amount that reported doing so in 2019. According to FMI’s Grocery Shopper Trends 2020 report, 54% of Gen Z reported shopping for groceries online in 2020 while 65% of millennials did, and 76% of millennials with kids did. The generations that grew up online are expected to continue online shopping patterns, but they need the same variety and access to products as they would get in the brick-and-mortar store.

“There is such an opportunity,” Parker said, “Five years from now will Gen Z and millennials potentially go back to their old food buying and cooking habits? Only if we don’t make it easy for them to continue the current habits they have developed.”

To do that, Parker said, “We have to embrace the digital shopping experience and the digital inspiration experience. We have to connect with them where they are and with what they want. This is an incredibly curious set of consumers and we need to stoke the curiosity using digital media and personalized connection.”

This story was included in the January 2021 issue of Supermarket Perimeter. Read the rest of the magazine here.