When it comes to nutrition density and earth-friendly ingredients and packaging, consumers, especially those in the Millennial generation, are down to pay a premium.
Results from IRI’s online survey, conducted April 2017, revealed the shopping preferences of a nationally representative sample of 2,000 respondents. Around 39% said they would pay more for foods and beverages that provide additional nutritional benefits, such as added vitamins and antioxidants. The number is higher, at 48%, among Millennials.
As a whole, however, CPG sales performance slumped. First quarter CPG sales in 2017 dipped by 1.5% in January compared to the same period the prior year, and retail unit sales dropped by 2.6%.
“January and February are generally softer months for the consumer packaged goods industry, but showed sharper-than-normal declines this year,” said Susan Viamari, vice president of Thought Leadership for IRI.
This is caused by uncertainty under a new presidency and a more complex retail marketplace, according to the company. Around 45% of consumers surveyed said their household finances are strained, “with lower-income and younger shoppers being hit the hardest,” Viamari added.
Deal Hunters: From coupons to store brands
Across the board, in terms of demographic variables, US consumers are seeking for deals. The Millennial generation is hit the hardest as the age group that has the most student loans and experience of economic instability for most of their professional careers.
More than a quarter (33%) of Millennial and Baby Boomer households are having difficulty affording needed groceries, compared to 26% of generation X and 21% of seniors. “Because Millennials have entered adulthood in a tough environment, though, this group really does not feel more putout than older generations,” according to IRI’s report—55% of millennial households are making sacrifices to make ends meet, compared to 53% of generation X, 54% of baby boomers and 39% of seniors.
Hence, 89% of Millenials are buying private label brands compared to 81% in the total population, 86% are trying lower-priced brands compared to 74%, and 60% are visiting multiple stores to keep bills down versus 58%.
Coupon clipping, a popular cost-saving solution, is a more popular activity for members of different generations—61% of Millennials clip coupons versus 66% in the total population. This may be compensated by digital deal sites like Groupn, as 48% of Millennials use digital coupons versus 36% in the population overall.