IRI Uncovers $54.3 Billion Sales Opportunity for CPG Industry with Millennials

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CHICAGO, Nov. 16, 2009- Millennials-Americans born between1979-1989-are one of the largest demographics in the country and willsoon be entering a strong growth period in both income and consumerpackaged goods (CPG) spending. However, these young Americans are not atypical consumer group and taking advantage of this emerging $54.3billion opportunity presents significant challenges. The latestresearch from IRI,"Winning with Millennial Women Shoppers,"closelyexamines this complex group, highlights key Millennial-driven U.S.growth markets, and provides deep insights into which channels andcategories are well positioned to benefit from future shifts, where therisks are and what action to take today.

"Future CPG spending growth from Millenials, driven by women shoppers,will be a major source of new sales growth for retailers andmanufacturers, who are continuing to compete in a volatile economicenvironment," says KK Davey, executive vice president, IRI Consulting& Innovation. "This consumer group is even larger and more diversethan Generation X, and they are on the brink of experiencing a broadrange of lifestyle changes, such as first home purchases, marriage,parenthood, career development and larger incomes."

Population and Migration Patterns

Millennials will impact the U.S. economy during the next decade in fourkey ways, which are overall population, age, where they live and willlive, and what they buy and will buy.

"Contrary to popular belief, it is Millennials, not Baby Boomers, whowill dominate U.S. domestic migration in the decade ahead," says SeanSeitzinger, senior vice president, IRI Consulting & Innovation. "Infact, a household led by a person in their 20s is eight times morelikely to move to another region of the country than a Boomer in their60s. During the next five-to-eight years, many Millennials are expectedto migrate to 'hot spots' in the Southeast, Southwest and the Rockies.These moderately-sized cities feature strong opportunities forentry-level jobs, affordable housing, and favorable weather, which areall factors that are highly valued by Millennials."

Retail Channel and Category Insights

What are the shopping patterns of today's 46.8 million U.S.Millennials? When compared with older shopper groups, Millennialhouseholds shop less often, spend more per trip, and do a greater shareof their CPG spending at supercenters and Walmart. Under budgetconstraints due to the economy, Millennials have pulled back spendingin many indulgent and convenience food categories, including frozenpoultry, chewing gum, salty snacks and frozen pizza.

Millennial non-food spending is similar to Generation X households. Ata category level, hair care, suntan products and household cleanercloths are among several categories that have potential for stronggrowth, since consumption in many non-food categories peak for shoppersin their 40s when their household size peaks.

Today, 70 percent of Millennials agree that store brands are typicallyof excellent quality. Surprisingly, Millennials attitudes and actualpurchases of private label brands is roughly on par with oldershoppers, which refutes the conventional wisdom that private labelacceptance takes a long time to evolve for a given consumer.

This private label acceptance also illustrates that brandedmanufacturers are routinely falling short in their efforts to buildtheir brands with Millennials through traditional media, such as TV,radio and print. These traditional approaches are not nearly asinfluential or as effective for Millennials as it was with previousgenerations. Manufacturers will need to explore other non-traditionalmethods to reach this group.

Health & Wellness Dynamics

IRI research found that compared with women in their 30s and 40s,Millennial women report an even stronger need for retailers to serve asbetter partners to support healthier diets and lifestyles.Weight-related issues dominate their concerns, with nearly half ofMillennial women thinking the may not have a healthy weight.

Millennial women are motivated to "shop for health," but they believethat finding healthier foods at retail is a challenge. They agree thata variety of healthy food products exist in stores but think thatretailers can still do more in terms of in-store merchandising andmessaging designed to navigate shoppers to healthier options.

Across meals-focused categories, Millennials are looking for healthieroptions in bread, cereal, vegetables and cheese categories.Granola/cereal bars, yogurt and cracker options top the better-for-yousnacking category, while indulgences, such as candy, cookies and icecream, are less of a concern. Less emphasis is placed on findinghealthy options in beverages.

Loyalty and Shopper Satisfaction

Compared with other segments, Millennial women spend less time andeffort planning their shopping trips and make less use of ad circularsand coupons. IRI also uncovered that most women are still makingimpulse purchases and only a small number have a set grocery budget.

When selecting their primary grocery store, Millennials place highimportance on the store's value proposition, location, user-friendlylayout and variety. Less importance is placed on checkout service andfrequent shopper cards. They are also less concerned with perimeterdepartments, such as fresh produce and fresh meat, which tend to becomemore important factors as shoppers age.

IRI Millennials Webinar

IRI is offering a free webinar, entitled"Driving Millennial Women to Your Store"at

1 p.m. CT on Nov. 17. To register for the webinar, hosted by consumertrends expert Sean Seitzinger, please visit:http://us.infores.com/NewsEvents/EventsWebinars/DrivingMillennialWomenShopperstoYourStore/tabid/221/Default.aspx.

About the Report

"Winning with Millennial WomenShoppers,"is a culmination of research that includes an exclusive IRIAttitudeLink survey of shoppers, proprietary IRI InfoScan and ConsumerNetwork data. For detailed information about the research'savailability and pricing, contact Sean Seitzinger atsean.seitzinger@infores.com

About IRI

IRI is the world's leading provider of consumer, shopper, and retailmarket intelligence and insights supporting 95 percent of the FORTUNEGlobal 500 consumer packaged goods (CPG), retail and healthcarecompanies. Only IRI offers the unique combination of integrated marketinformation, automated and predictive analytics, innovative enablingtechnologies, and domain expertise. With IRI, leading retailers andmanufacturers are able to quickly discover breakthrough insightsdriving smarter decisions and actions across the enterprise forbreakthrough results. Companies around the world depend on IRI forimproved productivity, stronger brands, and dramatic revenue growth.For more information, visithttp://us.infores.com.

IRI CONTACTS:

John McIndoe
E-mail:john.mcindoe@infores.com

Phone: (312) 474-3862
Fax: (312) 726-1091

Shelley Hughes
E-mail:shelley.hughes@infores.com

Phone: (312) 474-3675
Fax: (312) 726-1091