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Millennials – The Poorest Generation

by Ken Root

Millennials Love Organic Food.  A study by the Organic Trade Association says 52 percent of household heads that buy organic food are millennials in the prized 18- to-34-year-old age group.  That compares to 35 percent of GenX’ers and only 19 percent of Baby Boomers.  I don’t dispute the numbers but I question the long term impact of these preferences on the food industry and on the lifestyle of what I call “The Poorest Generation”.

To say that large organic growers are elated is an understatement.  Here is the response to the survey by Laura Batcha, CEO of the Organic Trade Association:

“The millennial consumer and head of household is changing the landscape of our food industry.  Our survey shows that millennial parents seek out organic because they are more aware of the benefits of organic, that they place a greater value on knowing how their food was grown and produced and that they are deeply committed to supporting a food system that sustains and nurtures the environment.”

Whoa, this is assuming these kids are having children that they are raising!  Ask some sixty year old “grandmothers-in-waiting” how it’s going with their thirty year old offspring marrying and having children and you’ll usually get a look that will back you up a few steps.   Millennials are unusual in their relationships, eating habits and lifestyle.  Most don’t live in the “real” world and I am not sure their current choice of more expensive organic food is a long term trend.

What makes millennials relevant is the size of this sector of our population.  They are seventy-five million strong in an age group born from 1977 to 2004.  The organic industry overall is benefitting from their buying habits as a study released in May shows record sales in 2015 of $43.3 billion, an 11 percent increase from $39.7 billion in 2014.

There is no denying that younger generations seek out organic produce and fruit as well as many packaged products that proclaim organic ingredients.  Some feign lactose and gluten intolerance as well.  They shop at specialty stores and many express a desire to live in harmony with the environment and eating organic helps them to feel better about themselves.

Meanwhile, back at the office, factory and farm, we have the older generation that raised them.  These kids were fed homogenized milk from cows that ate GMO grain, fruits and vegetables that were sprayed with pesticides to control insects and disease and they drank raw water out of a well or from the municipal water supply.  If you could look at them as lab rats, they are fine.  The food and water they ingested did not harm their health yet they turn toward the food their great grandparents ate as the ideal for themselves and the planet.

Here is the contradiction I see:  Millennials are the lowest income sector of our society.  Those that work are at the low end of the pay scale because of their age and many of them don’t have full time jobs.  They do currently have sizable disposable income due to living in someone else’s home or in groups so the rent is split up.  They spend far more than the average percentage of their net income for food.

The American dream has been to have a large supply of food at a cheap price.  We have held ourselves up as a more developed country compared to nations in Africa, Asia and Europe because our food was cheaper.  Now we have a generation that is willing to pay substantially more for what they eat if it meets their criteria.  Does this mean we are going backward or forward in economic and social status?

I am making the assumption that organic food sells at a greater profit margin than traditionally grown products.  This seems to be the strongest force behind the larger food companies who are part of the Organic Trade Association.  For years, small organic farmers have been rewarded with above retail prices for their products grown in a local and fresh environment but the new trend is to use the USDA regulations to brand a larger volume of food as organic.  To do so, it will have to be grown in a cost effective way and transported many miles.  This seems to counter the spirit of organic in the eyes of the consumer who buys it for unique qualities that industrialization takes away.

Marketing of organic versus conventionally grown has always been negative.  I don’t like distortion of science and logic by misleading product claims.  “GMO Free” is the newest buzzword and will be part of the labeling process in less than two years.  “Organic” has become a well-respected branding process that now has real world certification.  That may be its downfall as the term may become generic and shows up on a far greater portion of grocery products.

If I’m wrong on this one, it’s going to be a big time error.  Moving the millennials through their forties and fifties will cause economic stress if current trends in unemployment, taxes and regulation can be projected forward.  If economic reality upstages social conscience, this generation will become thriftier in their spending.  If they have less income than their parents, they will be denied some luxuries that now seem to be necessities.  If you want your child to have braces to straighten their teeth or a weekend cottage on the lake, you’ve got to cut expenses somewhere else.  Basic costs of food, clothing and shelter are at the top of the list of areas to cut.

Perhaps organic food will become the norm and there will be no other products in the stores.  Perhaps the government will require that only organic foods can be purchased with SNAP dollars.  Who knows what distortions government will cause in the marketplace.  For their sake, pray that millennials become rich so they can continue their current preferences after their aging parents are gone.