Millennials Changing the Supply Chain of the U.S. Food Industry
With half of American millennials proclaiming themselves to be “foodies,” a major shift in the supply chain is underway to help meet demand. After all, these people account for one eighth of the country’s population. In the early days of this trend, chefs might have had to revise their menus to include “hip” ingredients like kimchi, but now the effects are being felt further up the supply chain as it becomes a new way of life, with farmers needing to grow more of the foods these people demand, such as kale.
Consumers are largely moving away from a desire for cheap convenience food laden with fat, sugar and preservatives. Modern customers are seeking organic food that is nutritious, with a number of other concerns like being vegan or gluten free rising in popularity as well.
Almost Half of Americans Seek Organic Foods
Nearly 45 percent of Americans have said that they actively seek out products that are organic, with parents aged 18 to 34 making up the biggest group of organic food buyers in the country. The American organic market noted record sales last year, with a rise of 11 percent from the year before to $43.3 billion. People’s food preferences are shifting to align with their personal values, with tendencies not only toward healthier foods but also those that are environmentally friendly.
With the bulk of farmland in this country dominated by industrial agriculture, the demand for organic foods like berries and greens is far exceeding supply, which is driving imports and the prices on these foods.
Some major brands are thinking outside the box to come up with solutions. For example, Costco opened up its own chicken farms so it can control its supply chain better and ensure that the birds are cage-free and antibiotic-free. Meanwhile, Dannon has created its own supply chain to obtain non-GMO yogurt in the U.S. after finding itself unable to source it from its usual marketplace.
Higher levels of transparency and traceability are also required to appeal to modern shoppers, driving a boom in direct-to-farmer relationships. It’s now becoming clearer than ever that the supply chain is going to have to find ways to adapt if it wants to meet the needs of consumers.