Changing Purchase and Consumption Patterns of Specialty Foods in America

What to Know Before Opening a Food Store in the United States to Achieve Success

Much has been said and written about the ongoing battle between e-commerce and traditional commerce, particularly in the United States, exemplified by Amazon vs. Walmart. The crux of the matter is that the rapid growth of online commerce, favoring Amazon, has eroded Walmart's dominance in retail. However, in this challenge,  Walmart's market share problem may not
solely be about Amazon and the online sales of food products.

Consumers’ tastes and purchasing habits are changing in the United States. Millennials are wary of large industrial food producers, opting for natural and niche food items at an increasing pace. Consequently, sales of specialty foods in supermarkets are beginning to decline, while specialized stores are picking up the slack.

In a recent report to its clients, the financial analysis agency Stifel presented a chart showing that when it comes to grocery shopping, supermarkets like Walmart are not losing sales to other retailers, whether online or traditional. Rather, sales of food products in these American superstores are declining because Millennials' shopping patterns are changing; they prefer variety when it comes to shopping options.

As one of Stifel's analysts explains: "The concept of the one-stop-shop grocery store, capable of meeting all of a customer's daily shopping needs, is diminishing in favor of so-called 'specialty stores' — niche, specialized food stores that cater to the increasing demand for quality, health, and wellness voiced by Millennials in America.

Soon, we will likely witness a shift in food consumption patterns toward shorter but more frequent trips to such stores."

Several factors contribute to this change in consumption patterns in the United States:

1. More Americans are living in cities, and—for the first time in decades—people are "downsizing." For both reasons, it's increasingly difficult to stockpile food products at home.
2. Individuals with above-average incomes tend to purchase organic products and tend to value healthy foods. Consequently, they diversify their choices by shopping at specialized food stores rather than relying on traditional supermarkets.
3. While many Millennials may not be as skilled at cooking as their parents, they are decidedly more adept than previous generations in seeking inspiration —typically online— for new recipes or dishes. Step one is purchasing the necessary specialty foods.

Millennials do not tend to stockpile consumables as previous generations did. Instead, their food shopping is much more "spontaneous," leading them to visit multiple stores to purchase preferred products rather than relying on a single store.

In conclusion, "specialization is back," and large retailers will need to consider this in tracking their sales volumes. At the same time, significant opportunities are out there for specialty food retail stores that can meet the new demands and needs of Millennial consumers. This trend of prioritizing quality and authenticity over price is not unique to the food industry, rather it is part of an overall mandate for well-being in America.

Millennials in the United States

• Age group: 23-38 years
• Born between 1977 and 1992
• Millennials constitute 22% of the total U.S. population
• The purchasing power of Millennials in America is estimated at approximately $170 billion
• Key menu terms for American Millennials:
  • "Fresh"
  • "Local"
  • "Grass-fed"
  • "Unprocessed"
• Pasta is the favorite dish of 51% of Millennials in the United States