There’s no doubt about: Millennials are changing the business landscape. Not only do they make up one of the largest consumer groups, being 25% of the population and exceeding the Baby Boomer generation by three million, their expectations for innovation and transparency are redefining the products and services businesses offer. This week we spoke with Jeff Fromm, co-author (along with Christie Garton) of Marketing to Millennials and a veteran in the research of the CPG industry. He noted three specific areas where Millennials are effecting CPG businesses and how their influence will alter expectations moving into the future.
1. Business Expansion
Fromm said Millennials are creating more promise for small and medium-sized CPG businesses looking to expand. That is because those in the age group are likely to encourage and trial innovative brands, while simultaneously, likely to seek out retailers who provide an environment with creative products. “This creates an opportunity for smaller brands [to expand], especially if they tap into trends around flavor adventure and affordable price point,” said Fromm. Particularly on the subject of retailers, he noted that they are more willing to try new brands “because they think that might give them an edge to have something...off the beaten path.” This is positive news for scaling businesses in the CPG industry, who have historically had difficulty expanding into larger markets.
2. Product Development
Another CPG-specific influence Millennials have is on product development, according to Fromm. Businesses in this sector are paying closer attention to what this age group deems important such as unique flavor options and transparency about ingredients. Fromm said for CPG businesses to be attractive to this group (with more than $125 billion worth of purchasing power) they will need to “raise the bar without raising the price point.” This trend has boosted a growing number of CPG businesses to sell organic products free of genetically modified organisms and other ingredients Millennials find questionable. CPG expert Brad Hanna goes further to say that businesses marketing to Millennials should “go beyond transparency and aim for ‘radical’ transparency.”
3. Marketing Focus
Perhaps the most important Millennial influence that Fromm identified is the shift that CPG marketers will face as this age group transitions into parenthood. He said that they will continue to crowdsource information, or seek out brands via social media and word of mouth with friends. Yet he said their focus is and will continue to shift topics. “Instead of deciding where [they’ll] go for drinks on Friday night, it’ll be what baby food to buy,” said Fromm. He stressed that though parenting will force Millennials to be more pragmatic financially, “they [will] still prefer brands that deliver the value they want.” This has pushed even established businesses to develop CPG products (like Starbucks K Cups) to reach this new age group, with success. This new area of Millennials as parents will be the focus of Jeff Fromm and Marissa Vidler’s new book Millennials With Kids that is set to come out this summer.
These three Millennial influences, identified by Fromm, as business expansion, product development, and marketing focus will redefine the way CPG industry trends in 2015 and in the future.
Erin P. Friar
Erin Friar is a Content Marketing Journalist Intern at Repsly, Inc. and is completing a Journalism degree at Suffolk University. She is a master of grammar and is passionate about creating fresh content to help foster efficiency and overall success in small businesses.