How Millennials and Generation Z are Influencing the Restaurant Industry
Kevin Perkins and Alex Moreno
As we shift through generations, numbers have shown that consumers are not valuing home-cooked meals the way they may have in the past. Nowadays, it seems as if the Millennials and Gen Z are significantly influencing the trends in the restaurant industry. According to the U.S. Bureau of Labor Statistics, “Consumers aged 18-34 represented 21.9% restaurant spending in 2019, modestly above the 21.6% of the 18+ U.S.”
With that in mind, do you ever feel so lazy that you refuse to cook even though you are hungry, but then you realize that it’s 2020 and we can get our cravings right at our doorstep all with a couple of clicks on our phone? Man, how lucky are we! Not to mention, Millennials and Gen Z sure take advantage of these new delivery services.
Millennials and Gen Z are the main users of the “Big 4 3rd Party delivery providers (DoorDash, Grubhub, Postmates, and Uber Eats), platforms on which all orders are placed digitally.” In fact, studies show that up to “54% of customers aged 18-34 are a monthly active user of at least one of the Big 4.” It is important to mention that people aged 35 and older are also less likely to use these delivery services.
Based on the research found by the Cowen and Company Consumer Tracker survey, it is safe to say that Millennials and Gen Z are responsible for the growth in delivery and keeping these restaurants in business throughout a pandemic.
As we move forward, restaurant chains should be, if not already, collaborating with these Big 4 3rd party delivery providers and offering specials or discounts to motivate people to shift to digital and continue being a customer.
As with any company or business, transparency is key for success as it builds trust with customers and eliminates any skepticism there may have about the value you are offering. Food transparency has been proven to be the most essential quality required from restaurants amongst Millennials.
According to Cowen and Company Consumer Tracker Survey that investigates the importance of food transparency, “As Millennials and Gen Z enter their prime years of purchasing power, we note that younger consumers are 4.1% more likely to view food transparency as important or very important in making a restaurant decision.”
So now we ask ourselves, what are these global food chain restaurants doing to reduce environmental impact?
Well, many restaurants have already begun taking steps to have a more positive impact on our ecosystem and even becoming healthier with plant-based meals. For instance, “Chipotle’s Sustainability report highlights several elements of reducing waste, packaging, and energy use, including 21.3% of the electricity that is generated from renewable sources as well.” Furthermore, McDonald’s has planned to “have 100% of McDonald’s guest packaging come from renewable, recycled, or certified sources by 2025.”
All in all, the restaurant industry looks promising in the near future as the demand for prepared food is continuing to grow. If trends are able to maintain their current levels, investors should think about looking into some popular restaurants to bring in some profit.
Disclosure: At the time of publication, we have no positions in any of the securities mentioned in this article. I wrote this article myself [ourselves], and it expresses my own opinions. I am not receiving compensation for creating this article (other than from TheStreet) and have no business relationship with any company whose stock is mentioned in this article.