Foodservice Brief — October 2014

Defining the "Millennial Generation" is not an exact science. Commentators have used birth dates ranging from the mid-1970s to the early 2000s – generally, Millennials are considered to have come of age in the 2000s. For the purposes of this review, we will refer to Millennials as those who are 18 to 34 years old. They are distinguished in a number of ways. They are the largest in population size of the six generations typically studied. There are 74 million U.S. Millennials, and that number will build over the next 10 years by more than other age groups, driven by immigration. More than one in five Millennials is Hispanic – a larger percentage than any other generational cohort.

Millennials continue to face many challenges

There has been a lot of press coverage in the past few years on Millennials and their struggles during the prolonged economic recovery. It has been noted that they have increasingly incurred heavy college debt burdens, their unemployment levels remain higher than those of other age groups, and their pay is lower than it was in the past. Together, these factors have caused Millennials to be more pessimistic about the future and the economic situation than their counterparts in other age groups. How does all of this affect Millennials’ restaurant purchase behavior?

Composition of the Millennial group

For the purposes of this review, Millennials have been classified into two groups: younger Millennials, those who are 18 to 24 years old and the next-oldest group, those who are 25 to 34 years old. It is assumed that the purchase behavior of younger Millennials is different from that of the older group. Older Millennials are the larger of the two groups, accounting for 57 percent of the Millennial population, or roughly 43 million people in the U.S.

% Importance of Millennials by Age Group

Younger 18-24 Older 25-34 0 15 30 45 60
  Younger 18-24 Older 25-34
  43 57

Source: U.S. Census, July 2013

How the difficulties faced by Millennials have affected their restaurant use

Older Millennials, who are the heavier users of restaurants between the two groups, have cut back most, making 45 fewer visits per person over the past six years. Younger Millennials also made considerably fewer visits: 27 fewer visits per person over a four-year period.

Millennials’ restaurant visits by segment

Though both younger and older Millennials have reduced visits to QSRs, they still give the vast majority of their visits to these establishments. Much has been written about their use of fast casual restaurants, and yes, they did increase their visits to these concepts. Further, the number of visits made to fast casual restaurants is far fewer than Millennials’ visits to traditional QSRs.

QSR —  Per Capita Visits

18-24 25-34 2009 2010 2011 2012 2013 2014 0 50 100 150 200
  18-24 25-34
2009 174 198
2010 167 190
2011 161 188
2012 153 183
2013 159 175
2014 164 171

Fast Casual — Per Capita Visits

18-24 25-34 2009 2010 2011 2012 2013 2014 0 4 8 12 16
  18-24 25-34
2009 9 9
2010 9 10
2011 10 10
2012 9 10
2013 12 10
2014 13 11

Source: The NPD Group/CREST® —  Year ending June 2014

A review of both younger and older Millennials’ visits to full service restaurants reveals both groups did not visit these concepts as often as they did in the past. However, the visit losses for full service restaurants traced primarily to the reduction in visits among older Millennials.

Midscale — Per Capita Visits

18-24 25-34 2009 2010 2011 2012 2013 2014 0 5 10 15 20
  18-24 25-34
2009 14 20
2010 14 18
2011 13 16
2012 12 15
2013 11 13
2014 11 12

Casual Dining — Per Capita Visits

18-24 25-34 2009 2010 2011 2012 2013 2014 0.0 7.5 15.0 22.5 30.0
  18-24 25-34
2009 19 25
2010 18 23
2011 17 22
2012 15 20
2013 14 18
2014 14 16

Source: The NPD Group/CREST® —  Year ending June 2014

What can be done to entice Millennials to visit restaurants more often?

Given their general economic situation, it’s natural that Millennials have consistently cut back on their restaurant visits over the past six years. Even with their reduction in restaurant visits, U.S. Millennials still made over 14 billion visits to foodservice establishments in 2014. That translated to $95 billion spent on foodservice meals and snacks. And that leads us to the question, what can be done to entice Millennials to visits restaurants more often?

Meal cost advantage (price) will be very attractive to this group. Price promotions, coupons, loyalty programs (they want to be rewarded for their loyalty), and smaller portions all can be useful in encouraging more restaurants visits from Millennials.

Healthy offerings are of growing interest to Millennials. Address this interest by offering more food and beverage menu items that are considered to be healthier alternatives and/or lighter fare. Make nutritional information available for those who want it, and identify heart-healthy or low-calorie foods on the menu. Finally, the ability to customize their order is a significant incentive for Millennials. Operators need to determine how to make this possible so that the value proposition offered to Millennials increases compared to eating at home or going to a competitor that offers this customization option.

To learn more about Checkout Tracking, please contact your NPD client service representative, call our restaurant analyst, Bonnie Riggs, at 847-692-1767, or email
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