Coffee and the Challenges of Targeting Millennials
Posted on November 3, 2010
Coffeehouses and coffee roasters are biting their nails and worried about the future of their business. What with coffee prices going up and the influx of Millennials entering the market with little interest in a daily cup of joe, there is reason to worry. So how does a coffee house tackle the tricky world of marketing to Millennials and insure they will be making that non-fat double shot mochacinno for years to come? In this post I will examine the ways coffee shops can position themselves to welcome the droves of the largest generation to enter the consumer market.
According to the research firm Mintel, Two-thirds (66%) of Americans drink at least one coffee daily, but only 27% of consumers 18 to 24 drink coffee daily. Although adults 55 and older are the fastest growing segment of coffee drinkers, younger Americans are not as keen on the dark stuff.
Before you can understand how to market to the Millennial generation you will first need to understand who they are.
The Millennial Generation 80 million strong
Although there is no exact date range for the birth of the Millennial Generation it is thought that people born between 1982 and 1995 or 1977 to 1990 are considered to be apart of this generation. Basically, you are looking at people in their late teens to early 30s. Mostly made up of the children of the large Baby Boomer Generation, Millennials are the largest generation to ever exist with approximately 80 million. They were born and raised in a time of technology and are well versed in online media, mobile media and technological advancements. “Millennials are increasingly connecting to the internet wirelessly (81% have), and nearly three in four of those who go online use social networking sites.” pewinternet.org
They are also highly accepting of societal changes such as the greater availability of green products and more racial and ethnic diversity. The green movement is very important to this generation and they prefer brands and companies that participate in the green movement. According to a survey from Generation Insight, 76 percent of Millennials feel it’s very important for brands to get involved in the green movement.
The Millennial Generation is very diverse and it is not wise to over generalize such a large group of people. This being said they like their individuality and this should be taken into consideration when marketing to them. They also highly value community and being involved with each other. What some see as a fun past time or a toy, Millennials see Facebook and Twitter as a way to communicate, engage and plan outings with each other.
But what about my coffee house?
Now that you have a better understanding of who the Millennials are lets talk coffee. With only 27% of Millennials drinking coffee on a daily basis it can be a little scary for a coffee shop owner to think of a future with such a tough crowed. But never fear! The Millennial Generation LOVE their caffeine its just steering them to the right kind of caffeine that we need to focus on.
The Millennial generation like to be involved, they like the community feel of a cafe with comfy chairs and places for them to meet with friends and business associates in comfort. 46% of Millennials say they like to relax with a cup of coffee according to Mintels research, so providing an inviting atmosphere is key to driving traffic. Offering the perks like free wi-fi and reading material is a great way to create an inviting atmosphere for this social group.
Since Individuality is so important to Millennials it may be wise to offer customizable beverages. Offering sweeter drinks that Millennials can customized has helped coffee giant Starbucks become one of the leaders in Millennial friendly coffee houses. Frapaccinos and the ability to fully customize their drink has made this generation come in droves to a Starbucks shop near them. Just check out this Starbucks commercial and you can see that they are obviously targeting the Millennial Generation:
It also doesn’t hurt that Starbucks has started offering free Wi-fi with cool features like suggested songs from iTunes and an interactive network for each cafe informing visitors of specials, whats new, and community events. Creating a local feel regardless of being a national brand is a key to attracting Millennials.
Even 7-11 has changed the way they market their coffee to better suit the taste of the Millennial generation. The revamp includes: (source)
- Switching from glass pots to attractive urns;
- A new coffee bar with a modernized look and more functional layout;
- Redesigned cups and coffee branding; and,
- Promotions aimed at the younger demographic.
But perhaps one of the most important aspects to positioning your coffee house to suit Millennials is community involvement. Participating in causes that are important to them is very pivotal. “53% of 14-34 year-old trendsetters bought a product that donated money to a cause.” (Intelligence Group, 2006, May) Be active in the local community by participating in events and local causes that are important to the age group you wish to market to. Be active online where the Millennial Generation tend to virtually “hang out” the most. Social Media is a huge part of the way this generation gets their information and make decisions. (Stay tuned for the Foodservicewarehouse.com educational white paper on social media marketing, coming soon!)
So to Summarize
Focus on/What works:
- Support a cause they care about
- Be local
- Stay modern but comfortable and familiar
- Offer the beverages they like
- Be online – social media
- Make it comfortable and cozy
- Comfortable seats
- Quiet “cafe” style atmosphere