Millennials Are Spending More On This Than Any Other Generation

Each month, millennials shell out an average of $797 on this necessity. Care to guess what is eating up their budget?

August 14, 2017
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Time for a little confession: I used to hate taking my mom to the grocery store.

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When she first moved into the little apartment in our basement and started helping me out while I ran my errands with three kids in tow, I worried that the differences in how we lived our lives might become an issue. We ate good food growing up. I remember how much praise my mom got for being a good cook, but there is a big difference between the way my mom and I grocery shop.

Namely, I spend a lot more money on food than she ever would have when we were young kids. Because of that, taking her to grocery store caused me some anxiety at first. Was she keeping a mental tally of how much I was spending on organic ketchup, when conventional was half the price? Did she see my love of expensive cheese as a frivolous purchase?

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Time has passed, and I don’t think my mom was ever judging me for spending a lot on groceries. But I do think my insecurity was fueled by knowing that us millennials are spending more on food than previous generations. Are my spending habits just one more perceived failure of my generation?

Millennials are spending an average of $2,300 more annually on groceries than older generations, according to a recent study published by Bankrate. When the numbers are broken down into monthly data, my generation is spending around $797 each month on stocking their fridge.

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Is frivolous spending to be blamed for the grocery budgets of younger generations? Should we be learning a thing or two about frugality from our parents?

It’s not so simple, as it turns out. Here are the seven big reasons millennials are spending so much on food.

1. It’s a part of their lifestyle.

Millennials are spending more on groceries each month not because they’re frivolous but because it matches their lifestyle.

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In fact, Bankrate’s study revealed that millennials aren’t spending more across the board, they’re just spending more on necessities like groceries and gas. Older generations, however, took the lead on travel and entertainment spending.

While it wasn’t that long ago that millennials were seen as fresh college grads, they’re getting older, and their lifestyle is changing. Many millennials are starting families and settling into their adult life.

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So it makes sense that necessities eat up a lot of this generation’s budget. For young families, travel and cable TV aren’t as high of a priority when there are little mouths to feed.

2. Their spending mirrors their convictions.

There is no doubt about it, there is more information available than ever before about the impact of our food purchases on our personal health and the greater good of the world.

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Millennials are passionate about buying food they feel is healthiest for them, according to one consumer report by the Boston Consulting Group.

Additionally, this generation values higher quality food, and they are more likely to spend time reading labels and considering how their food was made. The origin of the food matters to millennials, too.

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Their generation has a greater awareness of the impact their purchases have around the world and are more likely to spend more to honor those convictions.

3. A desire to branch out fuels millennial spending.

When it comes to what lands in their shopping carts, millennial shoppers are more likely to prioritize trying new things.

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This generation loves to cook an assortment of diverse foods, according to the Boston Consulting Group, and will spend more for an opportunity to try something they view as unusual or exotic.

4. Millennials like cooking more than older generations.

Even though older generations may be seen as more traditional, millennials are pushing back on this stereotype with their love of cooking. When compared with baby boomers, this generation is more likely to report they enjoy the time they spend in the kitchen.

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Younger home cooks don’t just like cooking, they like being good at it. Millennials are more likely to aspire to obtain cooking expertise, with 64 percent reporting they believe they are skilled at food preparation compared with 52 percent of baby boomers.

So it makes sense that this passion would influence how much they are spending at the grocery store.

5. Cooking and community go hand in hand.

Although previous generations place a high priority on family meals, millennials care more about the social aspect of cooking. For this generation, connecting with their friends is a high priority, and cooking and dining together is one of their favorite ways to cultivate community in their lives.

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In fact, millennials are more likely to get together to prepare meals with their friends and dine in with their friends on a regular basis when compared with older generations.

6. Millennials have a different approach to shopping.

Since this generation is more tech savvy than others, it makes sense that their approach to filling their refrigerator is so different. When shopping, millennials are looking for ways to use technology to simplify their lives.

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Because of this, this generation will spend more on convenience. This is indicated in the rise in popularity of having meal boxes delivered right to their front door. Millennials still want to cook, and they want to cook good food.

Companies like HelloFresh and Blue Apron are making this easier than ever before. These meal boxes include perfectly portioned meals and step-by-step directions for home cooks.

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Additionally, services like AmazonFresh and Door to Door Organics make it possible for this generation to shop without ever setting foot in a store.

Of course, convenience comes at a cost, and many of the convenient options being used by millennials cost more than picking up the same items at the grocery store, according to kitchn.

7. Groceries aren’t the only foods millennials spend on.

Just because millennials are prioritizing healthy and diverse home-cooked meals, that doesn’t mean they are spending any less on eating out. In fact, this is one more area where this generation is outspending their elders.

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Each month, millennials spend around $50 more on restaurant food than older generations. This can be explained by the same factors influencing grocery costs.

Millennials prefer higher quality foods, they prioritize organic or farm-to-table restaurants, and they would rather try new foods than visit the same restaurants over and over again.

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In general, these habits are going to cost more than fast food or chain restaurant purchases, explaining the difference in spending between generations.

What does the future of food purchases look like?

A close look at the way millennials are using their money is a pretty good indication of what spending on groceries and dining out will look like in the future. Young adult consumers can be expected to continue to spend more if it means shopping in line with their values.

Additionally, convenience-based shopping experiences such as organic produce boxes or Blue Apron–style meals aren’t likely to go away any time soon.

Another trend expected to grow in the future are purchases fueled by the opinions of their friends. Millennials are much more likely to express their opinions on products using social media, and retailers are taking advantage of this by funneling portions of their marketing budgets toward social media users.

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They aren’t just buying ads, either. They’re paying social media users with heavy influence to use their product and talk about it online. This type of marketing can be expected to continue to drive millennial purchases in the future.

When it comes to millennial spending, it isn’t that they’re worse with their budgets or more reckless with their spending. Instead, a different set of priorities is what sets this generation apart from others.

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Thanks to increased student loan balances and lower income levels, millennials may not have the spending power of previous generations, but the way they spend certainly influences the market.

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