Grocery Shopping Habits: Examining the Attitudes of Young Adults

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Report Code: CS0630IS

Publication Date: August 2015

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Table of Contents

Executive Summary Introduction and Summary Methodology Young adults command a larger share of the grocery market than could be expected Share of FMCG products consumed by young adults – global Share of FMCG products consumed by young adults – BRIC vs. Non-BRIC countries Analysis of consumption patterns by age group: how Young Adults compare to other consumer groups While the term “millennial” is too broad for successful targeting, millennials do share three universal characteristics that should inform how to tailor product development and marketing campaigns to them The decline of the middle ground and the rise of the niche is defining this generation Brands must cater to the need for self-expression to maintain the attention of young adults Informal meal occasions have become the normal way to dine for young adults How to appeal to young adults Young Adults and convenience Young Adults and new flavors Young Adults, brand loyalty and co-creation Young Adults and promotion offers Young Adults, health, and functional food Young Adults and treats Young Adults and craft Young Adults and ethical consumerism Young Adults and trust in brands Young Adults and nostalgia Young adults and new technology Young adults and social media Detailed methodology and Appendix

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Why buy this report

Understanding the attitudes and behaviors of young adults, a generation also called ‘millennials’, is the key to unlocking opportunities in consumer packaged goods markets both now and over the next 30 to 40 years. Canadean’s latest report on their shopping and consumption habits shows what brands need to do to target young adults’ need for convenience, quality, connection, health, and taste.

1. Your brand needs to target young adults now Young adults account for a larger share of CPG consumption than many think, and their tastes and habits are influencing those of older and younger generations. A ‘young adult’ strategy is needed now, or brands risk losing out on the best opportunities which will emerge in consumer markets both over the next few years and in the longer term.

2. Develop products which truly resonate with your target audience by understanding what unites, and what differentiates, young adults The term ‘millennials’ can lead brands astray as they seek to target a consumer group with vast differences in age, lifestyle, financial power, and life goals. However, there are three universal characteristics young adults share that should inform how to tailor product development and marketing campaigns to them. These are the rise of the niche, personalization and self-expression, and informal eating.

3. Know what steps you need to take to target this vital audience thanks to Canadean’s unique knowledge of young adults’ attitudes and behaviors, presented in a highly visual and straight-forward format Canadean analysts have studied 52,000 survey responses from adults aged 18 and older in 48 countries in order to identify the best opportunities for CPG brands. Our findings are presented in a highly visual and easy to understand format to help brands take decisive steps to develop new products and marketing campaigns that meet the needs and wants of young adults worldwide.

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Executive Summary

1. Defining Young Adults Young adults are more likely to have university degrees, high standards of living and busier schedules than previous generations. 2. Diversity of Young Adults They are the most culturally, politically, socially and economically diverse generation and shouldn’t be group together as “millennials”. 3. Convenience Young adults are more reliant on convenient grocery products than ever before 4. Innovative Flavors New, exotic and innovative flavors capture the attention of adventurous young adults. 5. Brand Loyalty Instantaneous interactions with consumers through social media and co-creation will redefine brand loyalty. 6. Better Value for Money The myth that young adults spend too much is over-stated as they are just as savvy and price-conscious as any other generation. 7. Health and Functionality Young adults are expecting products that help them lead a healthier lifestyle.

8. Indulgence Confectionery, chocolate and “junk” food occasions are less frequent but tend to be more indulgent and decadent. 9. Craft and Artisanal Craft products are becoming popular but consumers do not fully understand what craft is and are wary of claims made by brands. 10. Ethical Consumerism Young adults support ethical products but due to the price and lack of availability they do not always purchase ethical products. 11. Trust Consumers are sceptical of brands intentions and want honesty and transparency with the products they purchase. 12. Nostalgia Products that are nostalgic help consumers relive their childhood as modern pressures of adulthood make them strive for moments of calm. 13. Technology 18-34 year olds are very open to new technologies and have become dependant on it as a result. 14. Connectivity Consumers want to feel connected to products they buy by understanding the story and heritage of brands.

Food and beverage brands need to realize the importance of young adults and what trends are influencing their grocery shopping habits, thereby maintaining and improving their market position. The most important information brands need to be understand to appeal to young adults has been categorized into fourteen key points.

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Almost a third of FMCG products are consumed by young adults making it the biggest consuming demographic

Young adults are defined as consumers between the ages of 16-34 and called “millennials”. It is the most educated, connected and tech savvy generation ever. It is also larger than the Baby Boomers and Generation X. They are also an elusive demographic to target because of these reasons. Brands have to navigate current and future trends as young adults are set to only increase in size and influence in the coming years. They already account for XX% of global occasions and consumption of food, drink, personal care and alcohol products and their importance is only set to increase as their size and wealth rises naturally. Young adults are beginning to replace older consumers as the primary spenders because of their growing purchasing power – particularly from developing countries.

XX% ...of occasions are consumed by the over 55’s globally

XX% ...of occasions are consumed by young adults globally

Global share of food, drink and alcohol consumption occasions, by age group, 2014

Kids & Babies

Tweens & Early Teens

Young Adults

Pre-Mid-Lifers

Mid-Lifers

Older Consumers

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The term “millennials” is unhelpful and counterproductive when dealing with modern young adults, though three universal characteristics can be targeted

“Millennials” is a generic label imposed upon a very diverse group between the ages of 16-34, and one that is increasingly unhelpful for marketers as it masks the deep divisions in the attitudes and behaviors of this large cohort of consumers. While the term “millennial” is too broad for successful targeting, millennials do share three universal characteristics that should inform how to tailor product development and marketing campaigns to them.

• Within each generation, need states are becoming increasingly fragmented, making niche brands more popular and limiting the reach of mass market brands. • Brands need to forget the “one size fits all” model, and develop a broad range of products that are closely aligned with very specific consumer groups and needs. • Niche trends rise and fall quickly, meaning brands need to refresh product lines regularly to align with what fads are rising and which are in decline.

• Self-expression through FMCG helps young adults seem unique, special and different from the crowd. This is in reaction to globalization and mass produced goods that stifle individualism. • The desire to stand out from the crowd has been present among all generations in their youth, but increased disposable income and the wide array of developed retail channels, including online, means young adults today can spend more money on more products that reflect their identity and personality.

• Informality has increased as traditional eating habits dwindle due to a lack of time, changing social attitudes and busy lives. • This means the line between snacking and meals is blurring, new consumption occasions are being created, and consumers are looking for even better quality food despite wanting to minimize the amount of time spent preparing it.

PERSONALIZATION & SELF-EXPRESSION

RISE OF THE NICHE INFORMAL EATING

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Manufacturers are launching more products targeted at niche habits

Grady’s Cold Brew Coffee is an American coffee-based drink that is very high in caffeine and can either be drunk hot or cold. It is aimed at young adults that want something new, interesting and gives them choices for preparation to keep them from getting bored.

Butterfly is a Japanese 1% alcoholic drink that is aimed at the growing trend of Japanese young adults not drinking as much as older generations. Many consumers want to avoid the after-effects of drinking too much.

SuperBlend Energy is an Australian convenient and healthy meal that requires almost no preparation. The product is aimed at time-poor health conscious consumers that don’t want to eat traditional fast-food or ready meals. It is made from super grains which is popular among some young adults.

Lenjiro Twigija (English: Fry in the Microwave) is a South Korean convenient ready meal. It is meant to be cooked in 2 minutes and with new technology that makes the chicken seem like it has been pan fried. It is aimed at very busy young adults that don’t care about too much about health.

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The media and internet has given young adults more fresh and interesting food ideas compared to older generations

The internet and social media has opened up countless opportunities among young adults to try new flavors, ingredients, recipes, cuisines and products they may never have heard of before. Young adults like to use the internet as a quick and easy tool to access a myriad of recipes and cooking ideas. The media and internet are educating young adults to try out culinary adventures using odd, novel and exotic ingredients and foods. The impact of YouTube cooking shows and social media in educating and advertising new foods have played a driving role in convincing consumers to experiment . This has given consumers the idea and courage to try new foods. Brands should take this opportunity to diversify and innovate their own products.

Epic Meal Time is a comedy cooking YouTube and TV show that specializes in extreme (or “epic”) meals, e.g. “Sushi Pizza” and “Candy Bacon Cheeseburger Rainbow Cake”. The YouTube channel has over 6.7 million subscribers.

Cooking With Dog is another YouTube cooking channel that focuses exclusively with Japanese foods. It offers a range of advice, recipes and directions for all types of cooks regardless of skill. The YouTube channel has almost 1 million subscribers.

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Summary Methodology

This report features data from two research programs

SURVEY DATA

• Over the period January 2015 - March

2015 Canadean interviewed 52,000

consumers in 48 countries, including

young adults, in regards to their attitudes

and related behaviors in the food, non-

alcoholic beverages, alcoholic beverages,

personal care, and tobacco categories.

CONSUMER DATA

• Method: extensive consumption surveys

and consumer group tracking with strict

age and gender quotas to ensure

nationally-representative results.

• Coverage:

• 10 Countries

• 20 Consumer Trends

• 26 Consumer Groups

• Integrated market sizing at the

country and category level

Details on the methodology for both of these research programs can be found in the Appendix.