Trying to attract any single group of diners can be a study in frustration. But when the effort is applied to younger generations, the payoff can be huge. Millennials, consumers born between 1979 and 1996, make up 32 percent of the U.S. population, according to Food IQ, a consumer insights firm in Springfield, Mo. More importantly, this generation possesses a mind-boggling purchasing power of more than $170 billion. Nipping at its heels is Generation Z, artfully coined the Centennials.
Born after 1996, this group makes up 25 percent of the population, and by 2020 it will account for 40 percent. Understanding what motivates these two giant cohorts spells opportunity: What makes them choose one dining experience over another? What flavor combinations make them repeat customers? Certainly Millennials have held our collective attention for a number of years now. But as those years go by, this group gets older, morphing into a different type of diner as they march slowly into the next life stage. Restaurants need to keep up with their changing needs. When Millennials first came on the scene, this giant group was painted with a wide brush. Soon, foodservice experts course-corrected, dividing them into young, college-age consumers and older, starting-families/launching-careers consumers. Now, the oldest Millennials are approaching 40, with 6.5 million of them earning an income over $100,000, according to FutureCast Marketing Consultancy, a strategic insights company based in Kansas City, Mo., that specializes in Millennial data analytics. FutureCast also reports that 53 percent of Millennial households have children. Food IQ says that 86 percent of first-time moms are Millennials, 40 percent of whom are non-white.
And then there are the Centennials. They are still too young to apply a huge amount of influence, but they’re growing up, moving out and spending money. These young whippersnappers are the new, shiny pennies.
The challenge for menu developers is to calibrate the importance of catering to Millennials while simultaneously starting to build brand loyalty and credibility with this “new” group. Often, these two generations can be grouped together because they share more values and preferences than previous generations. They represent the present and future consumer, and they symbolize the largest sea change in our industry—from how diners interact with brands to their expectations of customizable, social menus.
The Millennial Mindset
NPD Group, a research and consultancy firm in Port Washington, N.Y., describes Millennials as “restaurant explorers.” Datassential, a Chicago-based foodservice market research firm, labels them “thrill seekers and experientalists.” The Hartman Group, a market research firm in Bellevue, Wash., points out that Millennials came of age during the dawn of the fast-casual revolution, touting them as “Generation Fast Casual.” They certainly dine out more than any other generation: 49 percent eat out at least once a week (compared to 43 percent for Gen X and 35 percent for Boomers), says to The Hartman Group.
Tying fast-casual to Millennials makes a lot of sense. This generation loves innovation, casualization and customization, and fast-casuals are at the forefront of it, says Jeff Fromm, president of FutureCast Marketing Consultancy and co-author of Marketing to Millennials (AMACOM, 2013). “Millennials look for innovation that gives them access to something they didn’t have before,” he says. “They are the ultimate consumers, willing to trade up or trade down to get what they want. So maybe a fast-casual might not offer seating, but for an incremental premium, they get more out of the overall experience.”
Fromm describes the Millennial mindset: discovery, adventure, voracious consumption of content, mobile lifestyle, fairness, inclusivity. “This mindset isn’t defined strictly by age. Gen Xers can possess these values, too,” he says. Indeed, that influence speaks to the importance of the Millennial demographic—they are moving the needle in expectations, changing the way other generations respond to foodservice trends.
From a flavor perspective, Millennials have been pegged with more adventurous palates for some time now, but it’s not just about Sriracha versus teriyaki. It’s about the sum of its parts. “Millennials aren’t necessarily looking at spicy, savory, sweet,” says Fromm. “They’re looking at overall palate experience: texture, size, prep method. Millennials hold a thirst for adventure, and flavor is the tailwind within that theme.”
Millennials by the Numbers
Source: The Hartman Group
- 80 percent want to know more about how their food is grown.
- Among their top-trusted brands are: Ben & Jerry’s, Whole Foods, Trader Joe’s, In-N-Out Burger.
- Custom food and beverage options, like the 87,000 drink combinations available at Starbucks, are seen as a need, not a luxury.
- 40 percent will order something different every time they visit a restaurant.
Dubbed the “salad generation” by Businessweek, Gen Z ranges from newborn to age 19, so when analyzing its dining preferences, most attention is clearly paid to the teenage years. How do these diners compare to Millennials? They’re the same, amplified. It makes sense that the values held by their predecessors are imprinted even more closely, running deeper as part of their DNA. “The main difference is their exposure to food culture comes at a much earlier age than Millennials,” says T.J. Williams, vice president of strategic innovation for CCD Innovation in Emeryville, Calif. “They have a more sophisticated palate. By elementary school they know what sushi is, and they’ve already visited a farmers’ market.” Centennials are looking at Millennials, then dialing up what they’re doing.
Because they’re younger, they are not necessarily more adventurous than Millennials, but they are highly exposed, forecasting a future of bold flavor choices. “They have never known life without a digital connection, Facebook or Instagram,” says Mindy Armstrong, director of insights and innovation at Food IQ. “Food and chefs, for them, have always been ‘celebritized.’” She suggests breaking up the Centennials into different cohorts, the same way Millennials are divided into younger and older. “For the younger Centennials, adventure is found in customizable elements like dipping sauces, or a menu that’s all their own. For the older ones, they want a choice of bolder flavors, global condiments, but still approachable with the ability to customize.” So, they’re just like Millennials, but even more pronounced in their values, flavor preferences and eating habits.
What Centennials Crave
Source: CCD Innovation
- 74 percent say fruit is their favorite “healthy, craveable food”
- 43 percent say spicy is “likely to be craveable”
- 38 percent say global flavor profiles are “likely to be craveable”
- 38 percent say textural contrast is “likely to be craveable”
- 27 percent say sour is “likely to be craveable”
A crucial factor when analyzing how Centennials will evolve in the next few years as diners is their ethnic makeup. “They are the most ethnically diverse group,” says Williams. “From a flavor perspective, their fear factor is minimal. They are either familiar with global flavor profiles from their own heritage or through peer connections. And from a value standpoint, it’s important to note that Millennials raised the bar on caring about clean labels, higher quality food and sourcing. They’re aspirational. Gen Z is more actionable. With the power of Wi-Fi and a native ease with connectivity, they can be more actionable.”
Whether you splinter these two generations into sub groups or bundle them into one large diner profile, reacting to their dining preferences makes good business sense. “You’re always going to have different need states within each audience,” says Armstrong. “Whether it’s a single-mom Millennial or a pre-teen Centennial, understanding what drives their purchasing decisions helps you provide them with the right menu mix.”