Rise Of The Millennials And Aging Of The Boomer Generation Will Mean ‘Trouble In Aisle 5’ For Established Food Brands And Traditional Grocery Stores, Says Jefferies-AlixPartners Study

Jefferies, the global investment bank, and AlixPartners, the global business advisory firm, today announced the findings of their new joint study, Trouble in Aisle 5, which finds that the traditional food-at-home vertical, which is already facing trouble, is likely to see its challenges accelerate over the next few years. The study, which included a survey of 2,000 consumers conducted in May, finds that a confluence of factors appear poised to rapidly transform the food-at-home industry. The confluence of changing demographics, economic factors and customer preferences has the potential to create a long-term disruption across the food-industry value chain that transforms where and how consumers shop for groceries as well as what products they choose.

The root cause of the impending transformation lies in changing demographics. Over the next decade the baton will be passed from one mega-generation to another as “Millennials” (born between 1982 and 2001) come of age and “Baby Boomers” (born between 1946 and 1964) enter the next phase of their lives and spending patterns. As a result, established food brands and traditional grocery stores will be pressured at both ends by sets of consumers with very different value equations.

“We envision an environment that will require increased nimbleness and a relentless focus on the consumer for established food manufacturers and retailers, and the potential for rapid growth for new concepts and products,” said David Garfield, Managing Director at AlixPartners and head of the firm’s Consumer Products Practice.

“Millennials clearly present significant challenges, and food-makers and traditional grocery retailers need to start making changes now to address the emerging needs of this demographic group, as in many ways we’re just in the second inning of this ball game” said Scott Mushkin, Managing Director and Senior Equity Research Analyst covering Food & Drug Retailing and Packaged Food at Jefferies.

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