From Our Print Edition

After an extended period of inflationary pressure, discussions about consumer demand for value have become almost like white noise. However, new research finds that the most valuable food-at-home shoppers — millennials with children between the ages of four and 12 — have an expanded definition of value that, if properly addressed on store shelves, could lead to significant market basket gains for responsive grocers.

Cadent Consulting Group, Evanston, Ill., undertook an extensive research project between March and July that analyzed six household types: no children, kids under 4, kids 4 to 12, kids 13 to 18, kids over 18, and empty nesters. Results of the survey portion of the research, which included more than 60 frozen and refrigerated brands, were presented to attendees at last month’s National Frozen & Refrigerated Foods Association (NFRA) convention at the Gaylord National Resort Conference Center in National Harbor, Md.

DEFINING VALUE

“The reason that we embarked on a custom survey, in addition to all the syndicated analysis and category analysis, is we really want to understand how consumers shop — specifically in frozen and refrigerated products.

So we started with demand generation and moved all the way through to usage and satisfaction, touching on things like retailer selection, navigation in the store and item selection,” says Ken Harris, co-founder and managing partner at Cadent.

‘Some consumers define value beyond price, and the two things they look at are nutrient density and versatility.’

Harris says that many suppliers have responded to the need for value, typically defined by a product’s cost per ounce or absolute cost, depending on the item in question. He traces larger packs’ role in delivering value on a cost-per-ounce basis back to lessons learned in 2008 during the Great Recession when consumers were big on single-serve items before they suddenly weren’t.

“Consumers felt guilty they were buying something that was so expensive just for themselves,” explains Harris. “So, the reason you’ve seen this rash of multi-packs, in frozen foods in particular, is because we learned from our mistakes.”

While larger or smaller package sizes meet some shoppers’ definition of value, “Other consumers define value beyond price, and the two things they look at are nutrient density and versatility,” says Harris. These terms have concrete meaning for grocers’ most important shopper demographic, he adds. Nutrient density refers to products containing healthy ingredients. Versatility speaks to items that can be consumed during different day parts and meal times.

Millennial parents exercise great control over what their younger kids eat.

Harris calls it “good news” that all consumer cohorts care about these attributes, but one group cares most: Millennials with kids between four and 12 years of age — aka “The 4-12’ers.”

“The 4-12’ers think differently,” according to Harris, who says the group’s emphasis on healthy food options for their children presents a tremendous upside opportunity for grocers. Today, he explains, millennials represent a $3 trillion market. But Cadent forecasts that the market will grow to $4.7 trillion by 2030, a 57% increase. Purchases for kids will primarily drive that spending growth among millennial households.

Harris says the most important thing for grocers to remember is that 4-12’er parents “control their kids’ diets.” And these parents define healthy foods as nutrient-dense, with 74% claiming nutrient-density important in purchasing decisions. Fewer than two-thirds of households with kids under four or 13 and above say the same.

MAKE IT EASY

4-12’ers are big frozen and refrigerated food shoppers, according to Harris. The average 4-12’er buys 6.6 frozen items and 9.5 refrigerated ones per visit. This compares to five frozen and eight refrigerated purchases for households without kids.

As valuable as this cohort is, many grocers are likely underperforming with them due to poor shopping experiences. Sixty-three percent of 4-12’ers say they have difficulty navigating frozen food sets in the stores where they shop — 10 points higher than frozen food shoppers as a whole. The picture isn’t much brighter in refrigerated sets, where 59% of 4-12’ers have complaints compared to 54% overall.

These shoppers claim stores have made finding particular frozen and refrigerated brands difficult. Comparing products before deciding what to purchase is also hard for them. Cadent found that 4-12’ers have the most challenging time finding and comparing products in frozen plant-based meat alternatives.

‘Sixty-three percent of 4-12’ers say they have difficulty navigating frozen food sets in the stores where they shop.’

Harris says that plant-based items being a newer category might explain some of the difficulties shoppers face, but consumers are also frustrated by frozen snacks and appetizers, vegetables and fruits, sides, meats and fish, which aren’t new. For example, millennial parents expressed frustration shopping for frozen snacks and appetizers.

When measured for shopping difficulty, frozen snacks and appetizers came in at 150 on an index of 100.

Harris says that losing sales in a category like frozen snacks and apps is a significant missed opportunity for grocers, considering the size of the category and its growth rate. “Fifty percent of us are eating three plus snacks a day. The bites and minis category, just by itself, is over a billion dollars. There are 3 million online searches with bites and minis, compared to the average, about half a million. So people are actively trying to find these products,” he says.

Harris recommends allocating 30% of frozen snacks and appetizers to premium bites and snacks, with stores establishing veggie-forward bites as a destination category. He also counsels grocers to “harmonize” their merchandising and marketing activity to appeal to 4-12’ers in-store and across digital and retail media.