Generation Y, oftentimes labelled the ‘selfie’ generation, not only have different demands but have also brought new ways to engage with the food and beverage industry. Technology will always alter the way companies research and communicate with consumers, something that has been heightened as millennials have grown up.
We spoke to Emma Gubisch, head of consumer and sensory insight at Leatherhead Food Research, to explore how technology is being utilised in the industry to keep up with this highly influential generation of consumers.
Is it sustainable for businesses to try and keep up with the demand for innovative new products or practices?
Companies have to keep up with consumer needs if they are to survive in this world – this does not necessarily mean they have to have longer and longer NPD pipelines or jump on the latest trend – instead, it is about being much more strategic in what products or practices they need to pursue and identifying the ones which are relevant for their business. For this reason, many large companies have open innovation teams who are focussed on what technologies they should be developing five, ten or even 15 years into the future and what they need to invest in now to be ready for that future.
The market is highly fractured with the growth in start-ups who together are denting the profits of large multi-nationals – companies can’t go after all consumers and so they need to be clear what their product positioning is and who it is aimed at – being all things to all people is not an option.
Leatherhead’s innovation research discusses how the traditional players in the food and beverage industry are facing up to changing consumer demands and new competition from start-ups and are wondering how they can operate and remain relevant in this new landscape.
Rather than putting their heads in the sand, our 27 interviewees were in the most part preparing themselves for a food and beverage industry which will look very different from the one today.
They were caring for their existing product portfolios while watching the trends which are brewing on the horizon and considering how they can prepare their businesses to deliver those trends, whether that means buying start-ups who are better able to deliver what consumers want or creating new business models.
Is it fair to say that the industry will always pander to expectations set by millennials, for example in moving towards an app-based business model?
The challenge for companies is to successfully interpret what millennial consumers want and then deliver it – companies will fly or fail based on their consumers.
The key is understanding how technology (which is forcing the industry to change) will impact consumer behaviour and thus what kinds of products will be needed. For example, companies in our research were thinking what the homes of the future will look like and what this means for their products.
Technological developments in 3D printing and the development of the ‘internet of things’ could see consumers able to print food at home and have their fridge reorder products which have run out.
Handheld mobile devices could sync with devices at home to start preparing the meal before you get home. Companies were aware that the devices change our relationship with food and drink and create the need for different products which can be used in connection with those devices.
The way millennial consumers interact with food and drink has changed along with the rise in the use of technology, such as apps.
Will technology such as apps surpass traditional brick and mortar / personal connection between consumers and companies, or even businesses with other businesses?
As mentioned above, technology is forcing companies to do business differently. Technology is allowing millennials to personalise their product choices, changing the retail environment and enabling new forms of product manufacturing (e.g. cooking the pizza in the van down the road) and delivery routes to the customer (e.g. same day delivery or drone delivery).
The personal connection will always be important but companies should be thinking about how technology can actually enable this connection rather than shut it down, such as giving people the name of their vegetable/ingredient box delivery person – suddenly it’s not a faceless person delivering a parcel, it’s someone akin to the traditional milkman.
Where are the touchpoints now with the customer and how can these be used to understand better what consumers want? What about making retail spaces beautiful places that consumers want to go to experience or try out products rather than stressful environments which you want to get out of as quickly as possible? In Leatherhead’s consumer research report for our members, Serving up solutions for a changing consumer, 43% of UK consumers and 37% of US consumers said they did not enjoy shopping. It’s an area ripe for innovation.
How can the industry appeal to the fast-paced lifestyle of millennials whilst also appealing to their sense of environmental responsibility?
Ethics are becoming increasingly important to consumers.
20% of UK consumers and 24% of US consumers in our research wanted products manufactured ethically and with minimal environmental impact to be more readily available. Companies need to find ways to tell the authentic stories behind their products, for example by using technologies like Blockchain to create an undeniable history of a product along its supply chain.
Also being seen to be a trailblazer on key consumer issues, such as plastic packaging reduction, will make companies stand out for millennial consumers. Our recent research into this topic showed that consumers want the industry to try to tackle this issue in order to stop them feeling guilty about the amount of waste going into their rubbish bins.
© FoodBev Media Ltd 2019