Dive Brief:

• Millennial shoppers purchase a larger share of prepared foods, pasta and sweets at the grocery store than other generations, according to USDA data analysis. According to the agency, this demographic spends 13.6% of their at-home food budgets on these three categories, while Generation X members spend 12.6% and Baby Boomers 11.5%.

• On average, millennial shoppers spend less of their food budgets on grocery store purchases ($80 per month) than Gen X'ers ($85) or Baby Boomers ($135), and make fewer trips to the supermarket.

• The USDA said these shoppers expect healthier and fresher food when making "food-at-home" purchases. They also place a greater importance on convenience than do older shoppers.

Dive Insight:

According to the USDA's analysis, millennials' lower spending on groceries when compared to other generations reflects their preference to eat out. Supermarkets have noted this trend in recent years, and are expanding and improving their prepared foods in order to win back a generation that grew up shopping the aisles with their parents.

When millennials do make time for a visit, they're seeking out grocers offering meal solutions that don’t require too much preparation time or clean up. In many cases, this goes beyond the usual salad or pizza to include international cuisine and special-diet options. Supervalu, which recently launched Quick & Easy Meals across its retail banners, has three different prepared food options that vary by prep time: fully prepared grab-and-go options, heat-and-eat meals, and meal kits made with pre-chopped and measured ingredients. 

USDA's data analysis also found that millennials spend 88 minutes preparing food, plating it and cleaning up compared with the 143 minutes their Gen X older siblings spend on these tasks.

As they establish their careers and begin building their families, millennials aren’t spending as much time in the kitchen. Because of this, they are less likely to shop for and stock the basic ingredients that might be found in the homes of their grandparents, parents or older siblings.

Grocery manufacturers can use this data to their advantage. Retailers could, for instance, put more promotional muscle behind their value-added produce and play up their prepared foods through millennial-friendly channels like Facebook and mobile apps. They can also get more out of meal ingredients by cross-promoting salads with salad dressing, meats with marinades, and so on. It pays to get creative: Grocers might consider hiring culinary school graduates to turn fresh cuts of meat into in-store meal solutions and kits where the meats already are cut, seasoned and paired with side options that ready to go into an oven or skillet.

To earn a larger share of millennials' food budget while also meeting their expectations for healthy, convenient and indulgent foods, grocers are expanding their prepared food options to include authentic, flavorful meals that go beyond traditional rotisserie chicken, macaroni and cheese and lasagna. They're offering more restaurant-quality foods, and gobbling up valuable restaurant sales in the process — a strategy grocers large and small would be wise to try out.