Unlike the living room, which remains a primary destination for settling in to watch TV at the end of the day, dining rooms and kitchens across the United States are getting a little less use than they used to. That’s because Americans have embraced the experience of eating out, with “away-from-home” spending hitting a major milestone midway through this decade.
In fact, when 2014 rolled around, Americans began allocating more than half of the money they use for food and beverages for out-of-home dining. That represented a turning point in food and beverage spending—breaking a pattern that hadn’t changed much since the 1970s. Back then, through the earlier part of this decade, Americans were allotting two-thirds of their food and beverage spend on items they would later eat at home.
Given that individual food and beverage consumption remains relatively static once consumers reach adulthood, the downside of the shifting spending trends for retailers is clear—the portion of dollars spent in stores is trending downward. In fact, it dropped to 48% in 2014.
There is an upside, however. The total amount of money spent on food is growing. The challenge for all food retailers then is attracting a greater proportion of that total spend.
Chicago-based Nielsen Co. released a study, “Merging Tables & Aisles,” to outline who’s eating what and where.
While brands seeking growth are often quick to target up-and-coming consumer segments, it’s often insufficient to cast a net as wide as a very large group simply bracketed by age. The Millennial cohort is a good example, given the group’s size and increasing spending prowess. General knowledge about Millennials suggests that these consumers are on the cutting edge of new things, including meal kits and other online food services. But, a more data-driven segmentation uncovers the real story in emerging and online food and beverage options.
Specifically, a data-driven look at purchase behavior reveals that Gen X consumers actually account for 51% of meal kit spending.
Producing for, distributing to or retailing in a particular channel is no longer sufficient. Nor can a company simply add channels without changing the way it does things—it's impossible to be all things to all consumers. Instead, retailers and restaurants must develop food and beverage strategies at the intersection of shoppers’ desired occasions, locations and experiences, focusing on the key combinations where they are poised to excel.