One Generation Helping Give Rise to the Grocerant

CHICAGO — Supermarkets are increasingly raising the bar on their foodservice offerings and attracting the coveted attention of millennials. Restaurant-quality and fresh food, chef-driven menus and in-store experiences have prompted the rise of the "grocerant" and inspired millennials to visit and spend money, according to "A Generational Study: The Evolution of Eating," a new report by The NPD Group.

In-store dining and take-out of prepared foods from grocers has grown nearly 30 percent since 2008 and accounted for 2.4 billion foodservice visits and $10 billion of consumer spending in 2015, NPD found through its ongoing foodservice market research. More than 40 percent of the U.S. population buys prepared foods from grocery stores, and although millennials use grocery stores less than other generations, retail foodservice is graining traction with them.

NPD's study examines how eating behaviors of key generations are set to change as they move through life stages that examines the influence of age, generation, life stage, and values on current and future eating behaviors.

Consumers rate visits to grocerants higher than traditional quick-service restaurants (QSRs) on the variety and healthy options they offer. These attributes are among the most important motivators of purchase and consumer satisfaction to prepared foods consumers. Grocery prepared foods also received higher ratings on freshness and quality, attributes that millennials consider particularly important. NPD predicts that freshness will remain an important factor in millennials' eating behaviors as they go through stages of life.

"Millennials' interest in the benefits and experience supermarket foodservice offers will continue to be strong over the next several years," said David Portalatin, vice president, industry analysis at NPD Group. "This forecast bodes well for food manufacturers and retailers who have their fingers on the pulse of what drives this generational group. Give the millennials what they want — fresh, healthier fare and a decent price — and they will come."

Grocerants are also appealing to millennials by offering them an experience. Many grocers now offer restaurant-quality food at a lower price point than full-service or some fast-casual restaurants, including specialty categories such as Asian seafood, Italian, Mexican and barbeque. Grocery stores are trying to cater to all dining needs, including hot, custom-prepared grilled meat; food bars; soups; and sushi, and a growing number of grocery stores now provide comfortable, casual seating for in-store dining. Some even offer a full-service restaurant.