Beyond basic convenience, millennials still want their food as fresh and organic as possible. But unlike older generations, they enjoy trying different types of food and preparing their own meals much more (sorry TV dinners). That’s why meal kits and online grocery delivery services have become fast growing segments of the U.S. retail industry. The success behind meal kits and grocery delivery is that they bring together many of the things millennials care about in regard to their food.
“Big” Concerns
Considering these tectonic shifts happening in the U.S. food industry, why should Big food companies be concerned? The first reason is obvious. Economics.
“First and foremost, the industry should pay attention to these trends simply because of millennials’ current and future economic impact. As a group, millennials represent over 10 trillion dollars in lifetime buying power,” explains Lori Colman, founder and co-CEO of CBD Marketing, which authored a 2017 report analyzing millennials’ preferences in food, beverages, and supplements.
“Their preferences drive whole sectors of the food industry, as indicated in our report,” Colman adds.
Beyond economics, Colman says millennials share a lot more information about what they like or want in their food, making it that much easier for the “big” food industry to potentially understand—and respond to—their preferences.
“Importantly, they (millennials) are completely transparent about their views…It’s so easy to understand what millennials like, and don’t like; what their ideas are for new or improved products or services,” explains Colman. “The restaurants and groceries that partner with services like Uber Eats or AmazonFresh—as well as those services themselves—need to take advantage of the tools now available to harvest and analyze this information, using it to develop and improve their business models.”
However, the rise in popularity of fresh food delivery channels including meal kits isn’t happening without its challenges. For instance, Blue Apron, a pioneer of the U.S. meal kit industry, has experienced challenges with it distribution model.
Beyond that, when it comes to meal kits and the delivery of fresh foods, a common concern for the food industry and customers is how to maintain food safety with the new model. This includes elevated risks that come into play, such as with packaging and transportation.
Michael Lippold, founder and CEO of FreshRealm, which created a cloud-based fresh food delivery platform, thinks the new challenges with fresh food delivery call for a re-thinking of existing supply chains.
“The only true way to deliver the combination fresh and convenience that people want is to offer fully prepped ingredients (already chopped, sliced, measured, etc.), and the short shelf life nature of prepped perishables requires an entirely new way of thinking about the supply chain compared to longer shelf life items, such as frozen, shelf-stabilized, or even unprepped produce,” he says.
Lippold adds that new distribution models could leverage technology better for greater efficiency, as well as introduce periodic monitoring for food quality across the supply chain. Whatever the approach, Lippold says a modern fresh food distribution system needs to ultimately meet existing standards of what customers would get at a traditional food retailer and be economically viable for customer and supplier alike.
With millennials being the key customer to win over today.
Gachichio is an editorial intern in Wiley’s U.S. B2B group.
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