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Eating out, taking out, picking up and eating in: Growth expected for foodservice at retail

Restaurants are expanding online ordering and curbside pickup, while convenience stores are stocking fresh produce for busy and health-minded consumers. Driving these changes are millennial shoppers.

According to Nielsen, millennials make up 26 percent of shopping households and are the future front-runners in generational spending power. The millennial shopper is now nearing 40 years of age and spends more per shopping trip than any other generation as they buy for their growing families. They are changing not only what we’re eating but also when and how we’re shopping for it.bowl-delicious-eating-healthy-1832719

Understanding what drives consumers is the (multi)million-dollar question. Whether I’m speaking at SXSW in Austin, TX, or at PMA’s Foodservice Conference in Monterey, CA, we’re tapping into the PMA and Sentient Decision Sciences research that explores the question, what are the drivers that come into play when a consumer decides what to eat?

The first of two main influences is the rational angle. Even when we know that more fruits and vegetables is the best choice, the emotional choice often still wins out. The emotional choice speaks to what makes us happy — with food it’s what is fresh, delicious and comforting. How does the produce industry take advantage of this knowledge? Show consumers that fruits and vegetables are not only good for them, but they’re delicious, fresh and fulfill their needs.

Consumers today are deciding whether to eat out, take out, eat in or pick up to eat in. There is an obvious opportunity for retailers to fill the space with prepared food that offers convenience, healthy options and flavor.

According to Mintel’s 2018 Foodservice in Retail report, “Consumers tend to think prepared foods are healthier than restaurant foods, but not as healthy as homemade foods.” Despite this, Mintel predicts “the rising segment of consumers who are often on-the-go, yet want to spend more time at home will increase demand for upscale, ‘speed-scratch’ solutions and restaurant-quality, ready-to-consume products.”

This aligns with millennials becoming the largest purchasing population in the United States and indicates a turning point in consumer priorities. If retailers want consumers to consider their prepared food options, they should first tap into the fluidity of consumer preferences around what, when and where they eat and then focus on three major variables.

Value
According to Mintel, “65 percent of consumers cite ‘cooking at home saves money’ as the reason they are buying fewer freshly prepared/made-to-order foods from grocery stores” last year. This year, Mintel is reporting that “elevated convenience” will become a more powerful driver in consumers’ decisions to purchase prepared food.

Millennials are more likely than their generational counterparts to spend more for premium products, especially if it appeals to their priorities in health, sustainability and desire for authentic flavors. Millennials aren’t the only group that is beginning to define value by something other than cost.

Research by Morgan Stanley claims that Gen Z will surpass growth of millennials by 2034. Jennifer Hickman of Wunderman Thompson Health spoke at Davos on the Delta this year and said that “while millennials are focused on food for health, Gen Z is focused more on food for convenience.”

Transparency
More than half of consumers reported in 2018 that they wanted to know all the nutritional content in their prepared foods. It shouldn’t come as a surprise that the generation who grew up on smartphones and the internet is interested in gathering information about its food.

As food, health, longevity and wellness converge for consumers, it will become more important for them to be able to understand not only what is in their food, but where their food is coming from and what impact it is having on the world. This idea of sustainability expanding to include the entire lifespan of a product is another area Mintel has pinpointed as important to consumers this year.

Flavor
Regardless of all the research that states, unequivocally, that eating more fruits and vegetables is the single best things a person can do to live a more robust life, we know people eat what they think will taste best. Mintel spoke about the flavor focus of the new foodie with Whole Foods reimagining their rotisserie chicken flavors, “hitting on several emerging but not yet mainstream international flavors, which tend to be most popular with millennials.”

Consumer desires for authentic and exotic new flavors, or meals they can’t easily replicate at home, are the perfect niche for retail as they focus on their prepared food menus.

If we consider that prepared foods are poised for growth and younger generations are looking for the convenience and flexibility that prepared foods offer, how can we make sure that produce is included in every channel? By combining value, transparency and flavor no matter if consumers are eating out, taking out to eat in, grabbing prepped to eat in, or eating on the go.

(Lauren M. Scott is the chief marketing officer of the Produce Marketing Association)