When I began to work on this piece, I struggled with how to incorporate “foodie” with investing. I considered discussing restaurant or grocery store stocks. Instead I want to shed light on important eating trends. By understanding trends and habits of the three most influential generations, one can potentially identify investment opportunities. Here is some “food for thought.”
Baby boomers are mentioned daily in articles and news because of the sheer size and corresponding influence. Today’s estimated 74 million baby boomers, born between 1946 and 1964, are said to hold more than 50% of the investible wealth in the U.S. A point of emphasis relating to boomers is the fact that more and more, every day, have begun to turn 70 ½ years old. At 70 ½, owners of traditional IRAs and other qualified retirement accounts must begin to take a Required Minimum Distribution (RMD) annually. The RMD amount is calculated based on the account balance at the end of the previous year and dividing that number by the proper divisor based on the individual’s age and IRS table used. One would assume these retirees, whom are often empty nesters, are dining out more often, but studies indicate they are on average dining out once a week.
Generation Xers, born 1961 to 1981, are generally in their prime working years. Though this generation has less time on average to spare, they are considered to spend the most time cooking at home. Gen X is also referred to as the “sandwich generation” in part because many are taking care of both an aging parent(s) and supporting children. Eating out on average three times per week, this generation is more likely to spend the money on fast food or fast casual than fine dining.
Millennials, born 1978 – 1998, are greater in number than boomers. Known for spending their money on experiences rather than physical items, millennials tend to dine out more often than the two senior generations. With nicknames such as the “grab-and-go generation” and “the boomerang generation” they tend to eat out on average five times a week. Millennials are also well known for preferring organic, clean eating and humanely raised food. It is no wonder that partially prepared food services are on the rise as this generation wants fresh preparation without spending the time in the supermarket. Further, they possess a willingness to pay more for specialty food or receiving delivery. Millennials have embraced the use of apps for choosing where to dine, rating a restaurant after their visit and locating where to shop for groceries and specialty foods.
Analyzing consumption habits and preferences of different generations can provide great insight for investment decisions. In addition to food/food consumption, there are a whole host of other differences in generational preferences. Take the time to meet with your advisor to discuss trends and investments that are tailored towards your investment and financial planning goals. How’s that for some food for thought?
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