Generation Y, commonly referred to as millennials, plays a substantial role in today’s economy. They have a large influence on the types of products emerging and an even bigger buying power. Interestingly, millennials buying habits are inconsistent with previous generations. It’s important to understand what millennials are looking for in different products. Let’s take a closer look at how this will most likely shape the beverage industry.
A shifting attitude towards health
Finding out what millennials value is the core of what drives their purchasing habits. Recent studies have highlighted that nearly 50% of millennials go out of their way to buy products from companies that are aligned to causes they support. This means they want to truly believe in a brand and what it stands for. This further translates to the importance they place on purchasing organic food. The organic, natural, and sustainable food industry is fuelled by these consumers. Millennials want healthy, locally produced food rooted in good morals. They are an environmentally concerned group. Not only are they aware environmentally, they are making a stand for it and it reflects in what they buy. A great example of this is Karma Cola, who are making ethically responsible soda.
So, what does this mean for the beverage industry? Millennials are looking for beverages that are made from real foods that they can identify on the back of a label. They want natural, healthy products that are vitamin-rich not chemical laden. They seek out products with less processed ingredients and minimal preservatives. They are very aware consumers and want to know what they are putting into their bodies. Notably, for all of these requests to be met in their food, they are willing to pay more. This demand for healthier food and beverage products is especially apparent in the UK.
Since healthy foods are on the rise, with fresh squeezed fruit juices, organic smoothies and herbal teas booming, unhealthier options suffer. This means soda is at a disadvantage in the millennial market. A high sugar drink, with chemicals, preservatives and big plastic packaging is a hard sell to this crowd.
Material matters for millennials
Surveys have identified that millennials are also looking for products that are not only produced in a sustainable manner, but are recyclable as well. This theme continues as this generation also seeks beverages packaged in renewable materials. That means inventory stock in the beverage industry is changing shape. Instead of shelves lined with plastic wrapped products and plastic bottles, inventory stock is made from more recyclable and renewable materials. As times change, beverage inventory stock must adapt and evolve with demand.
Changing the way brands interact with millennials
Not only are the beverages that millennials drink changing, but the way brands interact with them is changing as well. Social media provides a huge platform for brand engagement. As a result, over 60% of millennials are more likely to stay brand loyal to a brand that interacts with them on social media. Additionally, since they are willing to pay more for the product they want, brand quality if often a focus on social media. Yet, they are still responsive to promotions and coupons that can be accessed from apps and emails. In a digital age, beverage brands must engage in a digital fashion to keep these millennials interested.
It’s important for beverage brands to keep up with what quenches millennials’ thirst and stay on top of the current trends.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.