NAPLES, FLA. — In a landmark survey of the largest generation of U.S. consumers, the “American Bakers Association 2019 Study: Attracting Gen Z and Millennial Customers” revealed the relationships, habits and perceptions of these consumers toward commercially baked foods. The results not only showed their perceptions of health, purchase drivers, and digital experiences related to the $153 billion baking industry but also indicated key trends for all consumer packaged goods companies to consider, said Robb MacKie, president and chief executive officer of the A.B.A.
Not surprisingly, the study showed that bread, sweet baked goods, tortillas, rolls and buns, and crackers rounded out the Top 5 products purchased by surveyed millennials, or consumers ranging from 25 to 40 in age, and their Gen Z counterparts who ranged from 18 to 24 in the comprehensive study.
In fact, the report found most (73%) have purchased bread in the last week, and 63% purchased a sweet baked good in the past week. Additionally, millennials and Gen Z consumers have positive nutritional associations with many types of baked foods.
“The opportunity for this industry is massive,” noted Jason Dorsey, president of the Center for Generational Kinetics and the report’s author, during the A.B.A.’s annual convention, held April 7-10 in Naples, Fla.
On the flipside, Mr. Dorsey added there are some major areas of concern. Perhaps one of the biggest, he noted, is that roughly half of millennials and Gen Zers are buying fewer baked foods than they did one year ago. Sweet baked goods, flatbreads and bagels were declining the most. Further research is needed to indicate if this is a long-term trend, Mr. Dorsey said.
Overall, the study provided a wealth of other insights and myth-busting conclusions about millennials, Gen Zers and their perceptions and buying habits concerning baked foods. Instead of shying away from carbohydrates, for instance, 78% of Gen Z and millennials responding to the survey eat carbs in their regular diet. Further, three-quarters of these consumers are not dissuaded from consuming baked foods because of a concern about carbohydrates.
“The bottom line is: Almost 8 out of 10 eat carbs in their diet, and that’s just no big deal,” Mr. Dorsey told a packed audience, most of whom qualified as baby boomers in age. “But if we all went on social media right now, what would you hear? Millennials won’t eat carbs ever. It’s fascinating that what tracks on social media doesn’t actually match the data.”
Across all product categories, Gen Z and millennial respondents stated the most important nutritional descriptors for baked foods are “whole grains,” “freshness,” and “natural ingredients.” Defining those terms, however, isn’t always easy. In some cases, Mr. Dorsey noted, the perception of what’s “natural” or “fresh” varies. Bakers don’t necessarily need to describe these items as par-baked or made from scratch.
“They want to hear ‘fresh baked,’” he said. “By the way, they have no idea what that means.”
However, the amount of sugar, artificial ingredients and the number of calories per serving can dissuade consumers from purchasing some baked foods.
“The perception is that sugar is bad,” Mr. Dorsey said, adding that “perception is reality” for most consumers.
Perhaps one understated trend involves food waste. In particular, when it comes to bread, food waste remains the main concern that inhibits purchases. The study uncovered that nearly three-fourths of surveyed consumers are bothered by wasting bread. And here’s a significant finding, Mr. Dorsey said. Having to throw away bread deters future purchases. Additionally, the study found that more than one in five consumers often or always skip buying bread on their next trip to the store after throwing it away.
Another popular myth involves the prevalence of online grocery shopping.
“The majority of consumers have not ordered groceries online. Period,” Mr. Dorsey said.
That’s especially true in the baking and snack categories.
“We are not shopping on Amazon to buy baked goods,” he said.
However, he added, online grocery shopping will happen eventually, but it’s a matter of when.
Mr. Dorsey started off his presentation about myth-busting millennials in general. He pointed out that they are older than most media reports portray.
“Everyone thinks millennials are 25 years old, and their pants are falling off,” he said. “But the truth is that pop culture has been saying that story for 15 years. The oldest millennials are now around the age of 40. The average age of millennials in the United States is 30.”
Mr. Dorsey cautioned against stereotyping millennials, whose numbers top 83 million in the nation. Those who are older than 30 often have different attitudes from millennials under 30.
“Nobody talks about that,” he said.
In fact, he added, studies show that some millennials are turned off by the most by their counterparts who reinforce the reputation that shadows this generation, a feeling of entitlement that has been fostered by their boomer parents’ upbringing of them, Mr. Dorsey said.
On a pure financial level, Mr. Dorsey noted, millennials now also outspend every other generation while boomer spending has peaked as many of them begin to simplify their lives as they get older. However, just because millennials spend more, their funding often comes from elsewhere.
“Millennials don’t have the money. Boomers have the money,” Mr. Dorsey said, adding that the transfer in wealth from one generation to another will be one of the most dramatic shifts in the coming decades.
From a more generational financial perspective, Mr. Dorsey noted that student loan debt is prompting many millennials to delay major life decisions, such as marriage, having children or buying their first homes.
“The new life stage is called delayed adulthood, which means you want the freedom of being an adult without the responsibility,” he noted.
Further, he added that Gen Zers tend to have a much more fiscally pragmatic approach to life than millennials. In addition to spending more on “products” than “experiences,” they’re leaning toward attending less expensive colleges so that they don’t get saddled with cumbersome student debt. And, Mr. Dorsey said, they’re even driving growth at thrift stores.
In the future, he added, such a grounded approach by Gen Z may be possibly seen as their key advantage in the workforce going forward.
“Some millennials are at risk with Gen Z leapfrogging part of that generation,” Mr. Dorsey noted. “Who gets promoted faster? The person who says, ‘I’ll take whatever job you have. Just give me a chance?’ Or the one who says, ‘Hey, it’s been four months now.’”
In summarizing the impact of the study, Mr. MacKie noted that companies need deeper insights into millennials and Gen Zers to be successful.
“Understanding these consumers is of paramount interest to all business sectors, not just bakery,” he said.
Additionally, Mr. Dorsey told the A.B.A. audience that these two generations represent more than just the future.
“They represent the new normal, and whoever adapts is going to win big,” he said.