Why confectionery manufacturers should embrace the Generation Y as a key market opportunity.
As demographics go, Millennials 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. Representing today 24 percent of the European and 27 percent of the U.S. population, they are in fact a significant part of the population, surpassing even the baby boomers in market size. Now ranging in age from 15 to their early 30s, the generation encompasses a variety of life stages and lifestyles, with many having flown the nest and no longer dependent on parental support. In fact, around half of the older Millennials are now married, and about 50 percent have children. Furthermore, many of them work in demanding jobs and are with an average household income of US $ 60,000 financially more stable than previously assumed. It is clear that this shift has created a major opportunity for manufacturers – however, for companies 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 confectionery manufacturers wishing to capitalize 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, Generation Y tends to see limitless possibilities to make a life of their own in order to create a perfect work-life balance. In fact, what characterizes 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.
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 rather 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
Rather than planning ahead, Millennials appreciate the instant choice, variety and availability that enables them to cater for every mood, taste and craving. This is why they are more than twice as likely to walk into shops frequently – as and when they desire a specific product or taste – 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’ replaced with its eating and drinking behavior the traditional three square meals with modern snacking. Almost every forth Millennial (24 percent) replaces meals with more than four snacks a day. Snacking has become a lifestyle, with an industry worth of 375bn dollars in 2014.
For confectionery 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, sweetener or cacao mix, 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 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 minimize 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 â€’ 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 the product, brand and quality match the consumer expectation. This is why confectionery 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 maximize 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 minimize 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. Leading experts such as Bosch Packaging Technology 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 capitalize on the market potential presented by the Millennials, confectionery 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. Last, 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.
For more details and expert tips, please watch the video
About the author
Since August 2011, Frank Buehler is, as product manager responsible for the new machine business and the after-sales applications for various packaging machines such as the stick pack and flat pouch systems at Bosch Packaging Technology. Initially trained as a mechanical engineer, he gained experience in engineering as well as international sales management. To his LinkedIn profile.
About Bosch Packaging Technology
Based in Waiblingen near Stuttgart, Germany, and employing 6,200 associates, the Bosch Packaging Technology division is one of the leading suppliers of process and packaging technology. At over 30 locations in more than 15 countries worldwide, a highly-qualified workforce develops and produces complete solutions for the pharmaceuticals, food, and confectionery industries. These solutions are complemented by a comprehensive after-sales service portfolio. A global service and sales network provides customers with local points of contact. Additional information is available online at www.boschpackaging.com or contact:
Product Division Confectionery and Food
Tel. + 41 58 674 89 28