3 Crucial Millennial CPG Trends to Know.

When targeting any demographic, you need to enter the consumer’s mind. You must walk in their shoes, understand their habits, and consider their options. Targeting millennial shoppers is no different.

Who Are Millennials?

Millennials (a generational cohort loosely defined as those born between 1981 and 1996) have a firm foothold in the consumer market. They hold well-established buying power across the entire consumer spectrum. Reports indicate that Millennials have a global buying power of $2.5 trillion yearly.

Characteristics of Millennials

Each generation goes through its evolution, but what makes millennials unique is their shift from the offline to the online world. The hybrid of activity adaptation leads millennials to have the following characteristics.

• Tech-Savvy: Millennials grew up with technology and are proficient in using it for communication, entertainment, and shopping.
• Value Experiences Over Possessions: Millennials prioritize experiences over material goods, seeking unique and memorable experiences.
• Focus on Health and Wellness: Millennials prioritize their health and wellness by seeking organic and natural products and engaging in physical activity.
• Social and Political Awareness: we know millennials for their social and political awareness, and many actively engage in causes and activism.
• Entrepreneurial Spirit: Millennials are often driven to start businesses, pursue entrepreneurship, and seek unique career paths.
• Connected and Collaborative: Millennials are highly connected and collaborate with brands, using social media and other digital tools to form communities and share ideas.
• Brand Loyal: Despite their reputation for being fickle, millennials can be very loyal to brands that align with their values and provide pleasant experiences.

These are not absolutes. Characteristics change within the millennial generation depending on many other demographic factors. 

Why CPG Brands Must Market To Millennials

When brands start doing market research and analyzing populations to learn how to reach their customers better, they all reach the same conclusion: Millennials are where it’s at.

And the same holds for consumer-packaged goods (CPG). Research shows that consumers will spend, on average, $65 billion on CPGs over the next ten years. With this much market share up for grabs, it presents a significant opportunity for CPG brands who know how to tap into these consumers’ minds.

A Warning For Brands Marketing To Millennials

Before we go any further, we must issue a warning: CPG brands must be careful about how they market to this group.

Many well-known assumptions about Millennial shopping behaviors don’t hold up under real scrutiny. Mediapost’s above rundown explains this, including the comments made by Eric Pakurar, Chief Strategy Officer for Geometry Global North America.

In his comments, he warns of “many traps CPG marketers can unknowingly fall into if they decide by only referencing generalized information or trends about Millennials. When we looked closely at Millennials’ shopping behavior in CPG categories, we found that very few widely believed assumptions about Millennials held up. This research shows how critical the examination of the life stage and shopping goal is. Especially in the categories they’re shopping for—to understand or predict their shopping behavior.”

But of course, the point of generation cohorts (as Pew Research described) is giving researchers a way to analyze changes in views, opinions, and perspectives. Assumptions are unavoidable to a certain extent.

Hellmann’s: A Case Study In Millennial Marketing

The rise of the “millennial” age and the expansion of e-commerce in the early 2010s spawned a new marketing trend: direct-to-consumer (DTC) branding. Many businesses like Hellmann’s recognized an opportunity to engage consumers directly via internet platforms, bypassing traditional retail The go-betweens such as grocery shops. Hellmann’s embraced this trend in 2017, creating a direct-to-consumer (DTC) campaign targeting millennials. Despite the brand’s excellent reputation and popularity, the campaign failed.

The DTC effort presented Hellmann’s products directly to consumers via an online store to produce a more customized, “millennial-friendly” purchasing experience. Hellmann developed a website, a social media presence, and a series of films and other marketing materials aimed at the target audience. Despite this, the campaign did not take off.

One of the primary reasons for Hellmann’s DTC campaign’s failure was a lack of consumer involvement. Despite the brand’s prominence, millennials did not appear interested in purchasing Hellmann’s items directly online. The DTC failure was because of a combination of reasons.

Perhaps the greatest is how Hellmann’s products were not distinctive enough to warrant the time delay and shipping expenses associated with online sales. After all, Hellmann’s items were already readily accessible in grocery stores.

Returning To Retail

Like Bob’s Red Mill, Hellmann’s online approach now reroutes customers to their local grocery stores. The corporation recognized traditional retail was still the most common way for customers to acquire home products. Learning a lesson the hard way, they now understand that there were better strategies to reach the millennial population than direct-to-consumer marketing.

The Hellmann case should serve as a wake-up call to other Consumer Packaged Goods (CPG) companies exploring direct-to-consumer (DTC) marketing. While direct-to-consumer marketing is enticing, there are better platform opportunities for CPG companies with a long history of retail commerce. 

Before entering the DTC market, businesses must carefully analyze their target demographic and the items they offer. DTC is only the most effective method to reach customers in particular premium-priced product categories.

3 Millennial CPG Trends That Matter

Without further ado, here are the three millennial trends that CPG brands must pay attention to. We’ve tried to pin down a few Millennial CPG trends retailers can take home—particularly in how they structure their packaging design for the millennial market.

Pricing Is Still Pivotal

This is an unfortunate reality that we must get out of the way. Packaging, marketing, environmental consciousness—all of this matters, but the price point still matters most. According to research by CouponFollow, Millennials are price-conscious, yet they struggle with saving:

• Eighty percent either “strictly” or “moderately” adhere to budgets when shopping;
• Fifty-four percent hold a credit card debt;
• Forty-five percent have less than $500 in personal savings.

However, food and drink remain one of the top areas that Millennials will invest in:

• Sixty percent said they spent most of their budgets on food and drink, and forty-two percent predicted they would do the same the following year.

We get it that most brands can’t compete on price—nor should they. Just keep in mind that, for Millennial shoppers, environmental consciousness or locally sourced production won’t hold a candle to a reasonably priced product.

Consumers Prefer Brands Who Share Their Values.

Any brand can get behind a Millennial CPG trend: Millennials prefer brands that share their values.

We know millennials are more socially conscious than previous generations and are more tech-savvy. What this means for retailers is that Millennials have more insight into how brands operate and will support the brands that meet their expectations.

Research suggests that 7 in 10 Millennials consider a brand’s values when purchasing. This means their public commitment to environmental consciousness, sustainability, worker fairness, and locally sourced products throughout the supply chain. Overall, Millennials demand unprecedented corporate accountability.

And given that we make so many shopping decisions at the point of purchase, we need to consider how a company can reinforce these ideals with its packaging.

Many brands share their company stories on their packaging designs, which is an excellent first step. But lip service is only the beginning. Making them aware of your ideals certainly matters. Still, consumers will react more to tangible benefits that make them feel like they’re contributing by going with your brand over a competitor. Here are some quick examples:

• Including strong seals in plastic bags that let shoppers use only what they need and save the rest for later
• Eliminating “bag-in-box” packaging and overall reducing packaging clutter and waste
• Investing in creating innovative packaging helps differentiate a product on the store shelf, such as a snack chip company moving away from the classic seven-layer foil and plastic bags

Increased Focus On The Visual Distinction

Naturally, visual appeal is a cornerstone of packaging design. But for Millennial shoppers, visual appeal from the store shelf to the plate is essential.

This is because Millennials are among the first generations to leverage social sharing on sites like Instagram, Pinterest, and Snapchat as aspects of daily life. It doesn’t matter what they’re doing—when they’re socially focused, any moment can be a selfie- or Snap-worthy.

And for those familiar with these sites, we don’t need to tell you that food is one of the most pervasive themes. Millennials treat food production (planning, preparation, and presentation) as a social experience. They post recipes for inspiration. They post clips of themselves preparing it. And when it’s done, they post photos of the finished product.

Research shows (there is plenty of research on this) that sixty percent of Millennials post photos of food purchases while in the store. Sixty-nine percent post photos before they eat.

CPG companies can play into these trends. Your packaging needs visual appeal, but “plate appeal” is equally important. After all, the packaging drives purchases, but product quality creates lifelong brand advocates.

Creating a Strategy Based On These Millennial Trends

Understanding trends is one aspect of creating a CPG strategy where millennials are the target market. Brands also need to consider the product category, economy, and competition. 

Brands looking to target millennials will need to take an omnichannel approach. Not only does the offline/online buying experience come into play. There is also an undeniable fact that consumers are being influenced through multiple touchpoints, causing them to seek products for immediate purchase. Finally, it is human nature to feel the desire to touch a product physically before making a purchase.

Millennial’s Influence On Other Generations

Marketing to millennials doesn’t exclude you from targeting the Gen Alpha, Gen-Z, Gen-X, and baby boomer markets. Millennials have a more significant downward influence on the younger generation, and any secondary demographics will most likely want to move in this direction. 

Mastering Millennial CPG Trends

As we noted in our above warning, you can’t generalize with your marketing. Millennials are too big of a group and too diverse in their perspectives. But that’s okay. Marketing isn’t about learning everything in one swoop. It’s about keeping an open mind and examining how all the pieces connect. Hopefully, this rundown helped you accomplish this and gave you things to consider regarding how your packaging is put together—for both Millennial audiences and the public.

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Want a best-selling brand? We can help you target millennials through a data-driven brand strategy and packaging design process. Through extensive consumer testing and decades of experience, we help CPG brands reach their target market through an approach that yields greater purchase intent and brand recall.

Book a time to discuss your project with our team.