How have millennials reshaped the beverage industry?
The UK [and SA] sugar tax, which came into force in April 2018, has profoundly changed the outlook of the beverage industry. Some say that a wave of legislation is being driven by millennial concerns.
Consumers aged 18-35 are said to be the most health-conscious generation yet. Will this lead to further legislative changes in the food and beverage industry, and how else will beverage companies adapt in order to maintain their appeal among this key demographic?
Here are the views of Zenith Global and FoodBev Media chairman, Richard Hall, in a Q&A, on whether millennial consumers have affected the beverage industry.
Effectiveness aside, is it not true that a majority of millennial consumers probably support a tax on sugar – or at least some sort of government intervention?
Millennials, and indeed most people, want to live healthier for longer at the same time as overcoming obesity. Starting with sugar may be simple, but it isn’t a solution. Tackling sugar alone may actually delay more effective comprehensive action.
And that requires action by all of us individually, in addition to business and government.
Younger consumers are more interested in their health than ever. Do you see factors influencing consumers in current generations that simply weren’t the case before?
The biggest change I’ve seen is the growing scientific evidence that many major diseases can be accelerated by bad diets and held back by good diets.
Food may never replace medicine, but it gives far more pleasure.
The area I’m most interested in at the moment is the emerging view that our microbiome is a new key to understanding our health. And, of course, new technology will allow us to track our dietary intake much more precisely than ever before.
How else do you think the beverage industry is changing to appeal to millennial consumers?
Beverages have always been about taste, convenience, value and identity. The two new dimensions over the past 20 years have been added benefits and ethical values.
Not only do more of us want to know what a product will do for us, we also want to it to represent our point of view. It’s almost a new form of consumerism democracy.
Is it fair to say that the beverage industry trails the food industry in finding genuinely healthy alternatives?
No, I think beverages are ahead.
Only recently have people started to expect confectionery and cake to be more responsible. Milk, soft drinks and alcohol all have long-established wide ranges of fat, sugar and low alcohol alternatives.
Drinks have adopted more natural characteristics wherever possible. But hydration is still underappreciated by society in general.
Does the sugar tax affect different consumers differently?
The UK sugar tax only applies to certain drinks and these are more popular amongst younger consumers, especially teenagers, so it will affect them more in terms of cost. We don’t yet know how much it will change their calorie intake.
Experience elsewhere indicates not much.
Do you ever feel that the food and drinks industry overlooks consumers older than 35?
This is a big and growing challenge. Older consumers in Japan consume more targeted products with pride. Older consumers elsewhere don’t wish to be treated as old. They may adapt some behaviours, but essentially their aspirations are younger.
I suspect many people over 35 have very similar views to millennials.