Millennials Will Drive the U.S. Economy

Millennials—Americans born between 1979-1989—are one of the largest demographics in the country and will soon be entering a strong growth period in both income and consumer packaged goods (CPG) spending. However, these young Americans are not a typical consumer group and taking advantage of this emerging $54.3 billion opportunity presents significant challenges, according to a new study by Information Resources, Inc., Chicago.

When compared with older shopper groups, Millennial households shop less often, spend more per trip, and do a greater share of their CPG spending at supercenters and Walmart, according to IRI. Under budget constraints due to the economy, Millennials have pulled back spending in many indulgent and convenience food categories, including frozen poultry, chewing gum, salty snacks and frozen pizza.

IRI found that Millennial non-food spending is similar to Generation X households. At a category level, hair care, suntan products and household cleaner cloths are among several categories that have potential for strong growth, since consumption in many non-food categories peak for shoppers in their 40s when their household size peaks.

Today, 70% of Millennials agree that store brands are typically of excellent quality. Surprisingly, Millennials attitudes and actual purchases of private label brands is roughly on par with older shoppers, which refutes the conventional wisdom that private label acceptance takes a long time to evolve for a given consumer.

This private label acceptance also illustrates that branded manufacturers are routinely falling short in their efforts to build their brands with Millennials through traditional media, such as TV, radio and print. These traditional approaches are not nearly as influential or as effective for Millennials as it was with previous generations. Manufacturers will need to explore other non-traditional methods to reach this group.

More info: http://u.s.infores.com