Monday, September 18th, 2017 | 471 Views
This article explains why manufacturers should embrace the Millennials (Generation Y) as a key market opportunity. By Frank Bühler, product manager, Bosch Packaging Technology
As demographics go, Millennials, also known as Generation Y, haven’t had the best reputation over the years. Born between the early 1980s and the 2000s, they are commonly seen as the Peter Pan generation—delaying the passage into adulthood and financially unstable. This somewhat dreamy and escapist image has traditionally caused manufacturers to bypass Millennials as a lucrative customer base—yet, this misconception could cost brands dearly.
The Millennials have grown up. These represent more than 45 percent of Asia’s population today, with over 60 percent of the world’s Millennials expected to live in Asia by 2020. Now ranging in age from 15 to their early 30s, the generation encompasses a variety of life stages and lifestyles, with many believing in the importance of maintaining strong social ties with family and friends.
On the other hand, Millennials are compelled by a sense of personal ownership at the workplace, propagating a title-driven culture, in which over 65 percent aimed to become the highest-ranked person at their job.
Millennials are estimated to offer US$6 trillion in disposable income by 2020, and during this window, food and beverage manufacturers will have the opportunity to influence their consumption patterns, and therefore benefit from this enormous purchasing power, if they act quickly. However, to harness the benefits it is vital to not rely on solely understanding the needs and preferences of this increasingly influential potential customer base.
How do Millennials ‘tick’? And how do single-serve packages such as sachets and stick packs hold the key for food and beverage manufacturers wishing to capitalise on their increased spending power by providing products that they really want?
Millennials were born into a world virtually overflowing with innovation, technology and choice. With this ever-expanding universe of options at their fingertips, they tend to see limitless possibilities to make a life of their own in order to create a perfect work-life balance.
Demands for healthy but fast and well-presented ‘photogenic’ food offered at affordable prices, are also common among this age group. In terms of characterising Millennials—perhaps more than anything else—is their drive, determination and ability to live a life that in every way represents and reflects their personal beliefs, preferences and lifestyles. To this end, they have embraced brands and products as means of personal extension, reported Forbes in 2014.
Crucially, the breed of Millennial works hard in order to have a wide range of choices when satisfying their personal tastes. Constantly balancing work and leisure, Millennials tend to have high expectations in their workplace, frequently change jobs or hold several positions at the same time, and are fiercely career-focused when it comes to achieving their goals.
As a perfect example of the ‘on-the-go-generation’, Millennials are flexible, creative and innovative in finding ways that enable them to use their time ever more effectively and efficiently—and when it comes to their priorities, convenience is king. In fact, a pressing need for a more convenient way of living is increasingly shaping their daily routines, preferences and ultimately—choices.
The Single-Serve Generation
Prudence is not always the Millennials’ strongest suit. Growing up in a time when technology facilitates instant gratification, Millennials appreciate the immediacy of choice, variety and availability that enables them to cater for every mood, taste and craving. Besides becoming increasingly affluent, this is also why they are likely to spend more time on leisure and experiences like travel, entertainment and dining than previous generations.
As a result of their constantly moving and evolving lifestyles, they have moved away from large, weekly shops, bulk buying and home cooking to more convenient product sizes such as stick packs and sachets. All in all, the ‘on-the-go-generation’ has replaced its eating and drinking behaviour with modern snacking—in contrast to the traditional three square meals.
For food and beverage manufacturers, the key to satisfying a customer base as impulsive and specific as Millennials is to provide a wide variety of products that can be easily accessed, portioned, consumed and carried. And the solution comes in a surprisingly simple and versatile package: the single-serve pouch.
Whether instant drinks, sugar, instant coffee, snacks, sweeteners or condiments, these small, individual packs—such as sachets and stick packs—are a perfect fit for the main requirements this customer segment demands. Small, affordable and ready portioned, they enable consumers to try different products and brands to discover the perfect match to their individual taste and health requirements.
In addition, with the right manufacturing equipment, the little packages offer easy, fuss-free opening and consumption on-the-go. Equally, larger quantities of foods and other products can often go unused. Stick packs and sachets minimise product waste by providing only the amount of product that is actually needed.
Success With The Right Dose Of Expertise
There is more good news: while the single-serve pouch is the perfect fit for consumers’ growing demand for choice and convenience, it also comes with significant benefits from a production point of view. In fact, sachets and stick packs tend to be considerably more cost effective both in terms of distribution and packaging compared to larger packs—without having to worry about complicated designs for container shapes or closures.
However, with a prospective customer base as spoilt for choice as Millennials, a number of factors are essential to ensure that product, brand and quality match the consumer expectation. This is why food and beverage manufacturers should ensure they take into account the following points when installing or updating a sachet or stick pack system:
- Speed is crucial—Gain the competitive edge by investing in an integrated, high-speed system that will boost your overall equipment effectiveness (OEE) and maximise your output, whatever your layout is. The latest technologies can produce up to 1,000 sachets per minute, allowing you to quickly adapt to changing demands.
- Don’t compromise on product quality—Millennials have high expectations, which is why it is vital that the packs not only look and feel the part, but also protect the integrity of the product. Advanced sealing technologies and hygiene configurations will help you win over and maintain this highly selective customer segment.
- A matter of accuracy—High filling accuracy (regardless of ingredient complexity)—is vital. It will not only protect you and your customers from inaccurate doses, but it will also minimise product and packaging waste.
- Work with the best—You don’t need to be an engineering expert to ensure that you get the best system for your needs. Work with a supplier who can help you design packaging platforms geared towards your needs. These will also be able to help you grow your market share by offering local support and service, wherever you are.
The principle is simple—in order to capitalise on the market potential presented by the Millennials, food and beverage manufacturers should reconsider their products’ packaging format. By simply changing format, the package becomes suited to different usage scenarios and as a result different consumers.
Lastly, with the wide range of options and sophisticated technologies available, to produce the perfect sachet for virtually any free flowing product, there is no excuse to miss out on a market opportunity as lucrative as that posed by the once-overlooked Millennials.
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