It's no longer sufficient for food and beverage companies to lump African-American millennials in with the rest of the generation, according to a new study by Viant Technology. To be the most effective, marketing must be targeted through insights about their dining preferences, purchasing habits and media consumption, the study said.
Total African-American spending power is expected to hit $1.4 trillion by 2020, the study noted. With millennials comprising more than one quarter of the African-American population, a large chunk of that spending is coming from that generation.
Viant said the study analyzed research on 29 million millennials and 7 million African-Americans, including nearly 3 million African-American millennials. Internal data mining of Viant's Advertising Cloud was a primary source of information, as were credit card shopping data from retail transactions, TV viewing data from more than 12 million households and consumer data from Viant's partners, the company said.
The Viant study found that food and beverage marketing campaigns must reach African-American millennials in ways that speak to them directly. In order to be relevant to their lives, direct relationships must be established which can take advantage of "people-based marketing," the study said.
Food companies are currently targeting African-American millennials, but not always with healthy products. According to recent research from the University of Connecticut, Drexel University and Salud America!, 86% of food ad spending on TV programs where African-American consumers are a majority of the audience was for fast food, candy, sugary drinks and unhealthy snacks.
Food companies jacked up their TV ad spending targeted to African-American by more than 50% from 2013 to 2017, that research found, although their total advertising spend on all TV programming dropped by 4%. Also, African-American teenagers viewed more than twice as many ads for unhealthy products in 2017 than did white teens, the university researchers said.
The efforts seem to be paying off. The Viant study found African-American millennials were 78% more likely than others in that generation to buy Ruffles potato chips, 75% more likely to purchase Cheetos and 69% more likely to pick up crunchy snack products made by Wise Foods. Manufacturers of healthier snacks taking note of those trends might want to target marketing efforts in their direction, particularly if they make crunchy products.
When it comes to alcoholic beverages, the Viant study found African-American millennials were 32% more likely to buy AB InBev's Natural Light beer and 30% more likely to pick up Heineken. Both of those brands have a more natural profile compared to other popular beers — although their differences are greater than their similarities. Natural Light is an inexpensive beer often associated with college students, while Heineken is a heavier import featuring more calories and carbs.
However, it's not necessarily all about those brands. According to Nielsen, African-American consumers spent more on spirits in 2016 than they did on beer or wine. They were 14% more likely than the general population to have consumed vodka within the previous month and were also purchasing more gin, bourbon, brandy and cognac. They're also much more likely to drink socially. Viant found that African-Americans are 25% less likely to drink at home than other millennials — but 11% more likely to drink at someone else's house and 12% more likely to drink at a bar or club.
African-American millennials are also interested in the companies that make their food and drink. Nielsen reported last year they are more likely than others to expect brands they buy to be culturally relevant, socially conscious and responsible. Of those African-Americans between 18 and 34 years old, 38% said they expected brands to support social causes, and 41% of those aged 35 or older said that, Nielsen found.
Millennials are far from a homogenous group, and the study finds some interesting — and potentially lucrative — cultural differences. Food and beverage companies might want to do more specific marketing to African-Americans if they want to attract more of the spending power they represent.