This study is aimed at examining the relationship between Generation Y consumers and the several demographic factors and preference for foods. Behind the Baby boomers, Generation Y is one of the largest consumer segments. The college students under the age of thirty five years of old will be approached for the study. More than 220 surveys were charted and evaluated. Considerable findings for the analyzed demographic variables will be resulted after closely examining the various aspects of Generation Y preferences for the use of organic products. However, in order to comprehensively understand Generation Y’s choice and impact of gender for organic products, it is highly advocated to undertake several more studies. From a product development perspective, there are many opportunities for marketers to pursue consumer preferences and packaging opportunities.
The consumption of food is not confined to its importance as a meal only rather several complicated individual and cultural elements dictate and influence it. However, unlike the previous times, the paradigm of food demand and consumption has altered greatly. More vibrant, complex and diverse food requirements have been placed by the consumers (Tovey, 1997). The population’s income in Latvia is one of the most important sustainable development affecting factors. ‘’Sustainable food’’ and ‘’sustainable food consumption’’ are the two widely used concepts that motivate people to adopt changes in their living patterns. In a food accessible and affordable environment, the sustainable and healthy food choices would then only be made (Storey, 2008). However, public health attempts to address sustainable consumption issues in a free market are often blocked by the lobbying of the food industry (Donovan, Henley, 2010). To manipulate the customers and give leverage to the marketing practices, several companies have labeled the products as ‘organic’. The Latvian companies and government have collaboratively took active part in running up several campaigns aimed at inculcating awareness among people about organic foods that strengthened the customers and natural food sources connection.
Like most of the countries, in Latvia, a food for consumption by the affluent, young, health conscious and well-educated people is the genuine perception for organic food (Finch, 2006), while the baby-boomers of adult ages, prone to several health diseases prefer to have functional foods (Frost and Sullivan, 2008). With increase incomes the Latvians are likely to be seen as stimulators to organic consumption base.
Generation X was suggested to be largely hit in terms of their daily purchasing food for the households. In order to inculcate the eating practices in the X, Y and Z generation, it is important to lay emphasis on several political, socio, cultural, technological, economic and demographic aspects.
Health concerns are key drivers for the demand of organic food consumption. Foods free from health risks and pesticides are the food of interest for the consumers (Mintel Organic Foods, 2006). The increase in demand for the organic products is on rise largely due to the environmental and health related concerns. Many people believe organic foods to be better in taste with the loss in trust on the conventional farming methods and the use of pesticides and the chemicals. However, from a marketing perspective, there is a need to learn the various marketing trends and techniques that could be employed to appeal to a wider audience.
The need for convenience foods is on the rise due to the demands on consumer’s daily lives, Wier and Calverley (2002). Several venues for the organic products are one of the notable trends that have resulted in the paradigm change. The product offerings are being changed by the retailers. For the organic foods, there are notable opportunities for the distributors, suppliers and retailers (Wier et al ,. 2002). The Generation Y consumers who now make up to 21% of the population are born between 1944 and 1977. Being born in an era of trying and trusted established brands, the generation now calls for their own products (Mintel GNDP, 2009). In United States presently, there are nearly 70 million Generation Y consumers which is likely to grow to 90 million by 2020, reports the US census data. The year 2010, as reported by the Wholefoods annual Food Shopping Trends Tracker survey was found to made greater influences in consumer’s shopping. According to Withers (2011), the interest in organic and healthy foods has continued to grow.
Unlike consumer’s consumption of the organic foods, little is known about the organic products purchase from consumer behavior perspective. Generally people believe natural and organic foods to be of the same standards, that is however not the case. All natural foods are not organic. With artificial fertilizers and pesticides foods can be grown and passed through processing methods. Moreover, for wellness and health issues, consumers are becoming more worried about what they put into their bodies (Connor & Douglas, 2001). Goods imported from China are becoming less valuable to the local people due to the problems associated with the infant and dog foods. Further researches can help the marketers and the researchers to comprehend the consumer’s demands in terms of purchasing organic food products.
The markets are widely flooded with the organic products with their growth rate expanding rapidly. 2% of the world’s food market is comprised of the organic food industry. By a significant margin, the organic sales growth continued to outstrip total sales of measurable traditional food and non-food items (Organic Trade Association, 2010).
Several reasons contribute to the push the drive for organic food consumption: the farmers faced work, green movement, food safety and overall health conditions. The standard organic food is consumed by the young, high income earning and educated (college and above adults), the literature shows (Onyango et al., 2007).
Purpose of the Study
The purpose of the study is to examine the relationship between Generation Y consumer preferences for organic foods and the various demographics such as gender, age, major, ethnic group, income and level of education. Behind the Baby Boomers, Generation Y is one of the largest consumer segments. They are one of the over studied and most net shrewd generations still, some researchers have posited this penchant to grow drained with a product at such a fast pace stems from the continual stream of images and communication that turn to this generation segment was introduced to as infants (Goman, 2006). For the marketing professionals, these “twenty something” consumers are one of the significant and most rewarding demographics group and the present trendsetters. Generation Y inured to affluence is heavily consumption-oriented with more than 70 million members generating over $500 billion in sales. Around 70% of them are employed with their buying power only gaining momentum (Vahie & Paswan, 2006).
Moreover, for the organic food suppliers and marketers, there are many unanswered questions, such as:
– For the consumer’s choice, is packaging a factor?
– Is the customer’s preference for purchasing organic products dependent on demographics such as gender, age, college level, educational level, ethnicity and income?
– Does the organic product purchasing decision rely on the cultural impact?
The consumer behavior deciding factors for purchasing organic products have been the forefront matters in the mid 1980’s in United States and Europe since the growing trend of environmental issues and health consciousness began to gain grip in the regions respectively. To many consumers, the validity of claims still remains unknown with several questions unanswered. Among the Y Generations, brands educating consumers about purchasing organic products and the environmental concerns rank high. These products have been able to bring change in people’s perception about the food packaging and the actual products while also brought transformation in the way consumers shop with carrying their own shopping bags (Hein, 2008).
For this study, the research questions are:
- How are the customer preferences for organic products influenced by the demographics of Y Generation?
- Does Y Generation ethnicity influence consumer preferences for organic products?
Chapter Two: Literature Review
Referred as generation Y, who are the Generation of consumers? They are the largest generation since the Baby Boomers and are the sons and daughters of them (Tinsley, 2008).
$ 100 billion is estimated to be the spending power of the Y generation. Since the 1960’s and 1990’s respectively, the kids spending power has increased by two and three folds. Annually, $ 11 and $ 30 billion is spent by children aged between 4 to 12 and teens correspondingly. The figure accounts the allowance and not the money given to them by their parents. Moreover, it is only on the birthdays, holidays and the time they are back to school, that they are given the money. 6-8 dollars is their average weekly allowance. Food and candy are the top products for this generation. Clothing, toys, games; books are some of the other important items.
The examination of the clothing types between the genders showed 38 % females between twelve and seventeen years of age and 25% males to be shoes and sneaker lovers while purchase of clothing was found to be high among 38% of the males and 79% girls.
Ethnographic and Attitudinal Characteristics:
The demographic segment of the Y generation tends to be over-sensitive, moving, communally aware and character-absorbed. From their buying, they stipulate prompt gratification, and as being the purveyors of ‘’cool’’, they have established the bar for technological savvy. As a unit, they have been labeled as ‘’ tech rich and media rich’’ who have a firm wisdom of their character distinctiveness and they offend it when others propose that they know them well than they know themselves” (Anderson, 2007).
”A disreputable erratic group, insisting the newest vogues in traced period” (Brooks, 2005, p.47).With this target market, brand identity is important. With the entire recognition of designer brands, to the next level, the fashion has been promoted by the Y generation. According to Sebor (2006), “Comparative to 27 to 40 years old people, the 18 to 26 years old people devote 28% more time virtually. They are 50 times more expected to send text messages and study blogs two times as repeatedly, the research have found’’(p.26). The behavioral patterns are greatly regulated by this type of communication. About a sale or product, the Y Generations are more apt to conveying text messages to friends. The generation like every encountering thing to be associated with the electronic devices, which are the fundamental components of their lives. Into the food preferences and approaches to pursue information pertaining to commodities, they hold their demands. They will transfer set menu and employ several interacting tools for food being an optimistic about their food choices for saving the planet. From this age group, additionally there are three important vogues; personalization, international tastes, wellness and health. Beside the comfort foods they have rich intake of snack, anti-aging and all natural weight control foods, all these are their favorite food products (What Generation Y eats, 2009).
The results of circulated research on organic food consumption are unified by Stanton, McDonagh, Prothero, Hughner, McDonagh and Shultz II (2001). There is twofold objective of this research; to analyze the reason behind consumer buying and their failure to purchase organic food and make preceding research reports on organic consumers. Over the last 20 years, a thorough literature review was directed but no qualitative or quantitative research was done. Extending from availability lack to esthetic imperfections fifteen subjects are recognized of the organic consumer .The ending considerations suggest the prerequisite for prospective research to develop better consideration of the organic food consumers.
Market of Bio and Organic Products:
The organic method of food production has lately been introduced in the 20th century to advance the growth process, and to prevent the food crops from getting prey to numerous agricultural diseases (Foster, Lampkin and Padel, 2000).
The term ‘’organic’’ generally means the production way which disregards all new synthetic contributions such as industrial solvents, irradiation, chemical fertilizers, irradiation and chemical food additives. Lacking fertilizers and toxic pesticides usage, this type of making supports and fills the fertility of soil. The growing and processing of the agricultural food, products and fiber is referred by the term. The ‘’organic’’ term entails the farming process, the integration of all the steps taken on the agricultural land, including the production, distribution and sales activities (Organic Trade Association Canada, 2011; Jones, 2003).
The organic production is expanding globally. Europe too has been the center for the organic production, though the widespread growth has had been unequivocal in various spaces. The Eastern European markets in regard to the organic farming techniques and the accustomed traditions have fluctuating developmental stages, while the Western Europe marks the birth place of organic farming.
Worldwide Organic Agriculture
Over 162 countries on an international scale provide organic production data, report the Swiss Forschunginstitut für Biologischen Landbau (FiBL) located in Lucerne. With over 37 million hectare organic agricultural land in 2013, the growth of the practice has widely being increasing (Willer, Lernoud and Kilcher 2013).
Organic Areas and Agricultural Land:
According to 2013 data the 162 countries considered for research are found to have 0.9 percent of the organic agricultural land. In Oceania (2.9%) and then Europe with 2.2 % of the total organic land possess the highest shares of the total organic land. 5.4 % is the European Union proportion. Though, few states have significantly greater shares. In the category, Liechtenstein, Austria and Falkland Islands top amongst the members (Willer, Lernoud and Kilcher 2013 and FiBL-IFOAM survey 2013).
Organic Agriculture in Europe
Over an extensive area, on 290,000 farms, 10.6 million hectares represent the European agricultural land. The European Union has 5.4% of the agricultural land, out of which 2.2 percent in Europe is organic. On the international criterion, in Europe is located 29 % of the organic farmland. In the last 4 years of time, by 0.6 million hectares, the organic land has enlarged.
There are farmlands in a collection of 7 European countries that have over 10% of the agricultural land. In accordance with the percentage of their organic land share, they can be listed as:
– Liechtenstein (29.3 percent)
– Austria (19.7 percent)
– Sweden (15.2 percent)
– Estonia (14.8 percent)
– Switzerland (11.7 percent)
– Czech Republic (10.7 percent)
Amongst them Latvia with 10.4% of organic land is the least highly ranked (The World of Organic Agriculture, FiBL 2013).
In early 1980s, the organic agricultural practices began attaining significance in Europe. The organic farming practices expanded greatly since 1985, with a beginning of 0.1 million hectares of land to more than 10.6 million hectares. The initial 21st century years reflect the organic boom (SIPPO, 2011).
Measures to enhance and accelerate the expansion of the environment friendly- sustainable organic farming processes are being taken. In several Balkan States, Eastern Europe and Central European countries, the significance of setting up the organic farmlands is growing. Particularly in Serbia, Hungary, Kosovo, Albania and Montenegro the development has been viewed.
To grow the arable and permanent crops respectively, 40 of the organic farmland, 45% of the grassland and 11% of the land was used, according to the figures reported in year 2009. Maximum organic area is used for growing organic grapes, apples as well as the organic vegetables (SIPPO, 2011). The previously organized organic markets (United Kingdom, Germany, Switzerland, Denmark, Germany) illustrate the European organic market, while (Italy, Sweden, Netherlands, France, Finland) and ( Slovenia, Czech Republic, Ireland, Belgium, Norway, Greece and Portugal) are the centers of growing and emerging markets respectively (Padel, 2004).