The combined average annual entertainment and food expenditures of 25- to 34-year-olds is within $1,000 of 55- to 64-year-olds. That puts them less than two years away from exceeding the baby boomers' purchasing power.
Although research characterizes millennials as eating artisans, many favor fast food. "Millennials tend to be foodies and a bit adventurous", says Cristin O'Hara, head of the Restaurant group at Bank of America Merrill Lynch. "They enjoy creativity and a variety of flavors as well as a great dining experience, yet value and service remain high priorities."
Millennials also value healthy living and put a greater emphasis than other cohorts on "eating right." They will also focus on a restaurant's environmental commitment, ethical treatment of animals and fair treatment in the supply chain. Vegetarian and vegan diets are also popular among millennials.
WAYS TO ADAPT
Growing millennial preferences will prompt restaurants to make capital expenditures for upgrading interiors, kitchen equipment, payment technology and order-processing systems. Those expenditures could also impact working capital needs. A relationship with a financial institution that has restaurant-industry expertise can ensure that those needs are met.
Top 10 Dining Priorities:
1. Innovation: They expect a steady stream of new, creative offerings.
2. Variety: Millennials prefer to vary their consumption patterns.
3. Customization: "Preparing food the way the customer wants it" is a key expectation.
4. Socializing: Millennials are more people-oriented than baby boomers, and value restaurants as gathering places.
5. Peer input: They depend on consumer reviews for purchasing decisions.
6. Mobile technology: Mobile apps are go-to tools for reservations, payment and delivery.
7. Images: Menus featuring images are more successful than text.
8. Experiences: Millennials favor events and experiences over products.
9. Authenticity: 72% favor “authenticity” over brands that "reflect my style," or brands that promote charitable involvement.
10. Deals: Millennials pursue discounts through their mobile phones.
Data cited in this article is from a BofA Merrill Lynch Global Research Report, "Generation Next: A Millennials Primer."