The old recipe for business success was so simple. The three key ingredients were everyday low prices, convenience and uniform products. Think McDonalds. Low prices, drive-through windows and the same tasting of Big Mac sold around the world.
Today, that formula is out the window.
Three consumers groups, with their own individual agendas, are reshaping how businesses win on price, convenience and product design. This trend is most clear in food sales. But its impacts are being felt by every business in America.
Why America’s food revolution is impacting all businesses
America is in a food revolution. No restaurant, grocery store or food manufacturer is immune. The most recent evidence of the seismic changes taking place? For the first time in U.S. history, bottled water sales have exceeded soda sales!
The massive marketshare growth for natural foods captures this trend. Overall, food sales grew a paltry .05% during 2016. But the sale of natural foods and beverages grew 7%. Over the last five years, natural food sales have leaped from a niche market status to about one-third of all food sales.
The same consumers that are redefining the formula for food sales success are also redefining the sales success model for your business. Think Macy’s or Sears. Legendary brands that have lost their connection with what their customers want, how they want to buy it and what they are willing to pay.
The following paragraphs profile the three consumers your business must align with to grow sales.
Millennials now have the economic power to make or break your business!
Millennials are the most obvious consumer group reshaping the recipe for business sales success. 2017 is a milestone year for this generation. Millennials have moved past the baby boomer generation to be the demographic group with the largest earned income buying power. The millennial generation is now the foundation for retail sales success.
The following insights on the attributes that millennials want for their food and beverages apply to your business!
- Sustainably produced.
Silverwood Partners’ Top Ten Food Trends captures how millennials are reshaping the food industry. By my estimate, these eight of their top ten trends are millennial generation driven:
- Emergence of personalized nutrition
- Better for you snacks
- Growing popularity of meal-kit delivery
- Plant-based waters move beyond coconut
- Sustainabilty driving development of cellular agriculture
- Brick and mortar grocery retail declining
- New food labels target added sugar
- Ice cream innovation.
The millennial generation is also pushing an Amazon-like definition of food procurement convenience. This new definition of convenience includes:
- Digital search, engagement and ordering
- Expanded, and continuously refreshed, food diversity
- Food delivery choices and convenience, most especially door delivery.
Moms are demanding affordable healthy (and diverse) food
Moms are caught between a rock and hard place. Their buying power has been stagnate over the last 15 years. They must buy affordable food.
But moms, increasingly aware of the health impacts of industrial foods, are walking the grocery store aisle in search of foods that are not laced with sugar, salts, fats and chemicals. Today, 33% of new moms say they are paying more attention to the content of the food they buy and 35% are thinking more about the use of chemicals in food and drink products.
This aligns with the growing consumer focus on food labels. Over 60% of food consumers are active food label readers. Consumers, especially food consumers, are demanding authenticity in what they buy and transparency in how it is produced.
Buying power is where this trend merges with the millennial generation’s trends. Millennial moms have $200 billion in annual buying power.
And millennial moms are representative of the millennial generation’s diversity. Today, half of the children born in America are non-white. Millennial moms not only are demanding affordable, healthy food but also diverse foods that align with their diversity.
LOHAS consumers continue to drive demand for sustainably produced food
LOHAS stands for Lifestyle of the Healthy And Sustainable. They represent about 20% of all consumers with approximately $290 billion in annual buying power.
LOHAS consumers are typically thought leaders and early adopters in health, wellness, awareness and sustainability. They trend toward being more affluent. That combination of thought-leadership plus affluence makes them hugely valuable to companies launching new products branded to improve human and plant health.
LOHAS consumers are a key component of the growing ethical consumer movement. Ethical consumers seek products with strong values attributes. These consumers were the early adopters of cage free eggs. They were the ones who first patronized farm to fork restaurants. They were the early adopters of green laundry soaps. Their social media postings on product values has a ripple influence on all consumers.
Grow sales by aligning with millennials, moms and LOHAS consumers
If you think this article is just about growing food sales, then you and your business is at great risk!
In 2017, the path to growing retail sales is through engagement with millennials, moms and LOHAS consumers. To win these key consumers, your business and products must offer them:
- Affordability. This is a top trend for millennials and moms.
- Health. Consumers demand healthier products that are also affordable.
- Convenience. The Internet, smart phones and home delivery now defines convenience.
- Authenticity/Transparency. Consumers are looking at labels and Internet postings to determine if a company aligns with their values on sustainability and ethical behavior.
This is the recipe for growing sales. Most especially in the food and beverage industry.
About the author
Bill Roth is a clean tech pioneer who led the team that launched the first hydrogen fueled Prius. He is a featured contributor on Triple Pundit and Latin Business Today. His book, The Secret Green Sauce, has been used by thousands of business people to implement proven green best practices that make money and a difference. Bill’s latest book, The Boomer Generation Diet, is his personal story on how to achieve sustained weight loss while still having fun and living more. The book’s ten customizable best practices are the sustainable solutions to our national weight crisis that threatens our health and medical cost bankruptcy.