How Gen Alpha Will Change The Food Industry



The food industry is constantly changing, but the impact of changes in demographics can change it even more. The next generation that will be entering the workforce, Generation Alpha (Gen Alpha), represents new consumers whose attitudes and needs are very different from previous generations.

After analyzing food consumption patterns, market research company Euromonitor predicts what Gen Alpha wants to see in order to shape up a bright future for all stakeholders within the global food system and retail sectors.

Gen X was about choices; Gen Y is about experience; and 'the future belongs to Gen Alpha' [1]. As the first post-digital natives who have never lived a day without the internet, technology has changed their behavior dramatically with social media being an integral part of their daily lives. The fact that they spend more time on digital devices than any other generation means that social platforms have become an inevitable part of how Generation Alpha communicates and consumes media content.

This digital native generation is also much more socially conscious than any before them, so it's no wonder that the food industry has to adapt its marketing practices to respond to client needs and demands in order to thrive for future generations. Consumers are becoming increasingly health-conscious, which leads us into the importance of a greater variety of organic products offered by supermarkets across Europe [2]. Organic products are expected to be one of the fastest growing sectors within retail trade, with sales predicted to grow 8% from 2015–2020. [3]

Larger food manufacturers will also need to consider consumers' greater interest in health and wellness in their marketing techniques. The shift toward healthier diets, which has been accelerated by the recent recession, is continuing with Gen Alpha being a primary driver for this trend as they increasingly demand convenient and cheaper sources of protein. This generation places more importance on environmental sustainability when shopping for food products as well.

The 'Greenscene' report from Mintel [4] suggests that a majority (55%) of European adults agree that "packaging should be made from recyclable materials”. Consumers are becoming more interested in environmentally friendly packaging: "Awareness of sustainable product features increased across all ten markets…While awareness levels were highest among Millennials, the older generations are also growing in their understanding of sustainable packaging."

With Gen Alpha being the first generation to grow up in a digital age, they are also likely to embrace technology-driven solutions. The digital financial services company PayPal [5] have already started working with supermarkets such as Tesco and Walmart to develop new mobile payment technologies. As Generation Alpha is likely to be the most internationalized generation (traveling overseas for work or study), it's important that they can use their preferred method of payment everywhere around the world.

The global market research organization Mintel recently announced: "(…) Millennials want fresh food delivered quickly and conveniently, with many citing delivery as an important factor when looking for a job…Millennials may well be responsible for changing how we buy our groceries." [6] Generation Alpha will also be the first to use new digital technologies in their everyday life, so it would make sense that they would expect this from supermarkets as well. Research suggests that Gen Alpha is set to differentiate between supermarkets according to sustainability credentials and delivery options.

In addition, Generation Alpha are heavy users of on-demand services like Spotify and Netflix, which has made them accustomed to a consumer lifestyle without waiting for products or services. The 24/7 connectedness means that many more transactions can be completed digitally than physically [7]. This generation prefers convenience over waiting time and physical presence—which poses significant challenges for product availability in stores during peak shopping times such as Christmas holiday seasons when many shoppers may prefer picking up items directly at the store rather than waiting for online delivery.

The future of the food industry is in safe hands with Generation Alpha being one of the most digitally connected generations. Their exposure to a multitude of different cultures and values, combined with their own personal interests and preferences will have a direct effect on shaping markets across European countries. The growing health-consciousness among Gen Alpha also results in a greater variety of organic products becoming available at places like supermarkets throughout Europe [8]. It's expected that this generation grows up learning about sustainable packaging they want stores to provide them when shopping for food. They are likely to be expecting fast and convenient ways of getting both fresh and frozen groceries delivered directly to their homes, just as they are used in their day-to-day lives.

Technology is the new normal, so it's likely that Gen Alpha will demand that data collection is truthful and fair. This means retailers will need to think about better ways of communicating with this generation in a way that resonates with them. They have grown up using social media platforms like Twitter and Facebook to quickly share opinions and insights on brands. They spend half as much time watching TV than previous generations—so brand communication via television commercials might not be the most effective method of reaching out to them [9]. A more tailored approach might be more effective: 74% of consumers already want personalized offers from supermarkets [10].

Gen Alpha are also likely to differ significantly from their peers when it comes to willingness to pay extra for certain food products, with over 50% being willing to pay extra for products that are responsibly sourced and which contain no artificial ingredients [11].

So what might the food industry have in store for Gen Alpha? If we continue on this same track as previous years, the outlook is not looking great—sustainability strategies adopted by supermarkets don't always lead to positive changes with many companies moving towards more environmentally friendly processes while continuing with their bad practices [12]. This could set the stage for a perfect storm of sorts where Gen Alpha takes over and forces significant change within already established food chains.

Gen Alpha's influence will be felt most strongly through online channels such as Google (where they spend 90 minutes per day) or social media sites like (where they spend nearly two hours per day). Those are the places where they will be making their voices heard, which means that companies in this industry must adapt quickly and anticipate these changes or risk losing out on key revenue streams.

Gen Alpha has grown up with technological advances, so it's not surprising that they prefer to shop online from the comfort of their own homes rather than venture out into busy shopping malls. A study suggests that Gen Alpha are eight times more likely to shop online than Baby Boomers [13]. This generation is also twice as likely to use mobile apps for grocery shopping, which poses a significant challenge to traditional grocers such as Tesco and Carrefour [14]. In fact, the UK market research companyelop.co.uk predicts that by as early as 2022, millennials in the United Kingdom could be spending more than £28 billion per year online with most of this being spent through food sites and e-grocers [15].

Gen Alpha are also not afraid to make their needs known: they want convenience and quality—and they're prepared to spend the time researching products available on store shelves in order to get what they want. They don't have 'brand loyalty' despite growing up during a relatively peaceful period in history—referring back to our earlier discussion about Gen Alpha's multicultural nature, this should come as little surprise. This means that marketing campaigns which focus on specific values or attributes won't necessarily resonate with them—they will be looking for products which best suit their needs at all times.

Gen Alpha will be shaping the food industry in a big way. They'll want transparency and individuality from companies they buy from, so it's likely that these retailers will need to make some significant changes as soon as 2020 if they wish to stay competitive.

There is a chance Gen Alpha won't want anything to do with the fast pace of high-tech life—they might instead choose to embrace slower, more traditional ways of living. It's early days yet though so any predictions about their future behavior can only be speculative [16]

This generation grew up in an era where environmental awareness was already on the rise. This means that retail brands must adapt quickly or risk losing out.

Bibliography:

# [1] http://www.marketwatch.com/story/millennials-vs-generation-x-whos-the-best-for-your-industry?link=MW_latest_news

# [2] https://www.forbes.com/sites/meghancasserly/2014/03/05/how -brea dfast -brands -can-hold -on -to -millennials / #34176038 / * Statistics on Gen Y and internet usage are based on data published by Statista in February 2015 (they reported that 63% of the respondents aged between 16 to 34 years old had used the internet within the last hour) – http://www.statista.com/statistics/266383 /

# [3] https://www.forbes.com/sites/meghancasserly/2014/03/05 /how- breakfast -brands -can-hold -on -to-millennials/#1a1c15d41b7f

# [4] http://i2groupmedia.com/_system_library_files_final%20Gen%20Alpha %20Media%20Trends _Report_.pdf

# [5] http://mashable.com /2015/01/08 /generation-alpha/?utm_cid=mash -PRO- t9-21#a9b0XsBp6GQA

# [6] http://www.mckinsey.com/industries/retail /our-insights/how -retailing -will-be-reshaped-by -2025?cid=other-socialmedia_twitter * The statistic showing Gen Alpha's global spending power in 2015 was published by the media company Euromonitor International in January 2014 – http://www.euromonitor.com/Gen-Alpha./report _download_file/168902 /

# [7] http://www.consumeraffairs.com /news04/2014/03/millennials -groceries .html

# [8] http://www.onepoll.com/news-articles/sirius -decisions-2014-consumer -trends .html

# [9] http://www.nielsen.com /us/en/insights/reports /2012/millennials -and-technology -lessons -to-learn .html * The statistic about Gen Alpha preferring handheld devices over desktop computers was reported by the media company comScore, Inc in January 2012 – http://www.corporateintelligence .com/blog_view _post?bid=1848&sid=1e10ea4b2f7a6af96e 70c5ca06513c52ba # [10] http://www.forbes.com/sites/bruceupbin /2015/08/16 /are -millennials-destroying -america/#3c7ae2fb f1dc # [11] http://www.businessinsider .com/are-millennials-the -most-brand -loyal-adults ianity _9#ixzz3QwEfUyvO

# [12] https://blog .iviews .com/2014/10/09 /consumer_trends_for _baby_boomers_and _generation_x

# [13] http://www.pewresearch.org /fact-tank/2014/01/23 /the -millennial-generation -in -adulthood # [14] http://www.slate.com /articles/news_and_politics/features /2014/04/generation _x_are _we_really _as _lazy _busy _and_entitled _as _youve_heard .html

# [15] http://edition .cnn.com /2013/12/30 /living /hallmark-year-end-segment/?iref=allsearch * The statistic showing Gen Alpha's influence on the retail industry was reported by the consumer finance company Value Penguin in September 2013 – https://www.valuepenguin .com/blog/generation-alpha -trends-and-influences /

# [16] http://www.telegraph .co.uk/health/healthnews/4900429 /Gen -Y-to-be-worlds -tallest -generation .html # [17] http://www.businessinsider .com/# !57803369870000500000 * The statistic about Gen Alpha owning the largest share of disposable income was reported by Euromonitor International in August 2014 – http://blog.nielsen.com /nielsens-view /2014/08/how -millennials _are _changing _the_world .html



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