What’s on “Mi” Plate? Impact of Millennials on Food-Service Industry

While selecting food options, convenience plays a significant role for millennials. For example, they may view even making cereal cumbersome, as it would require cleaning a dirty bowl, according to a 2015 Mintel report. Kellogg’s sales fell 14% from 2013 through 2017, as younger consumers moved to more convenient options (including flavored yogurt and bagels) and prepared breakfast sandwiches

Online ordering has exploded in recent years, as apps have made it possible for people to order food directly from restaurants that earlier did not provide delivery services, aided by the availability of ratings for each restaurant. This has opened up avenues for food-service players and provided consumers a plethora of options and information on choices available

As millennials have become more quality conscious and their awareness on the use of chemicals and pesticides for food cultivation has increased, demand for organic fruits and vegetables has soared

The wellness-conscious millennials are seeking “superfood” alternatives (e.g., kale, chia seeds, and cayenne pepper) as they age. During 2011-2015, products launched as “superfood,” “superfruit,” or “supergrain” grew 202% worldwide

Given their increased awareness of health-related issues and environment conservation, this generation prefers food and beverages with least artificial ingredients & preservatives and packaging with environment-friendly and recyclable materials

Companies with enough capital/cash should tie up with or purchase smaller players with a more advanced product portfolio. These smaller players, providing superfoods, organic food, and recyclable packaging, may be popular among younger consumers. So instead of investing in R&D to develop technologies/processes, it may be profitable for the suitors to acquire companies that have already built expertise in this area and then invest in building economies of scale.

In this fast-changing environment, companies need to continually monitor and stay abreast of changing consumer preferences – from tastes to methods of ordering (online, apps, etc.). A change in consumer behavior, such as millennials’ skipping breakfast, could offer food-service companies an opportunity to provide catering services for breakfast at work

As technologies continue to become more pervasive across industries and functions, the distinction between the current technology and nontechnology firms will increasingly blur. Technology will act as a key differentiator, and companies adopting technology will be pioneer in their fields. This stands true in the case of food-service providers as well – in redefining processes, improving efficiency in logistics and supply chain, monitoring and analyzing customer behavior, and reaching out to end customers (using online platforms, apps, etc.)