Some call them Millennials, others Generation Y. Most often, they're known as the Echo Boomers. The offspring of the Baby Boom generation, they form the next big wave rolling down America's demographic curve. Born between 1977 and 1995, they number at least 25 million more than Gen X (or the Baby Bust), the cohort that came of age in the 1980s and 1990s.
"Being the kids of the Baby Boomers sets them apart from the get-go, the same way the boomers were set apart," says Barbara Caplan, a partner at Yankelovich, the consumer research firm. "They were defining every stage they went into since they were born, from diapers to eating out."
Now, the Echo Boomers are about to redefine foodservice. They already have spending power beyond their years: $192 billion a year spent by kids who don't have jobs, according to the U.S. Census Bureau. And that's just the beginning. They're forming dining habits that will last a lifetime.
"This is a group of people that should be near and dear to any restaurant chain," says Bob Sandelman, president of Sandelman & Associates, a foodservice research company in San Clemente, California. "They're in their formative years, feeling their way, establishing their brand, chain and menu preferences."
The challenge to restaurateurs is that today's teens and 20-somethings are choosy. They love places where they can wire up or plug in. They hate bland food and slow service. Whatever they want, they want it now.
Chances are, the parents of Echo Boomers both worked, and neither had much time to cook. So Echo Boomers—more than any other generation—view prepared food as a staple, not a luxury.
"These individuals tend to have a disproportionately high frequency of using restaurants," says Hudson Riehle, vice president of research and information services for the National Restaurant Association. "They're the most likely of all age groups to view restaurants as an essential part of their lifestyle."
A 2004 NRA survey found that 79 percent of 18- to 24-year-olds had gone out for dinner in the previous week an average of 2.4 times, the highest of any age group. Census figures show they spend 48 percent of their food budgets on food away from home, versus 41 percent for all households. But while Echo Boomers eat out more often, they have less to spend on it. Considering their age, not surprising. Consumer researcher Mintel International, in Chicago, reports median household income for consumers aged 15 to 24 was $27,053 in 2003. That compares with $43,318 for all age groups.
Until they bring home fatter paychecks, these diners will be grazing on combo meals and supersizes. "They're heavy users in the quick-service arena," says Randall Hiatt, president of Fessel International, a restaurant consultant in Costa Mesa, California. "They're still somewhat more in the value side of quickservice as opposed to the premium side. When McDonald's started having salads, this wasn't the group that grabbed on to them."
But they are a group with an adventurous palate, reflecting their diversity. In the 2000 census, 62 percent of Americans between 10 and 25 were non-Hispanic White. By comparison, Americans over 55 were 81 percent White.
"This generation is much more ethnically diverse than any generation before in the U.S., and it's reflected in the cuisines they enjoy," says Kathy Sheehan, vice president of Roper Reports, a consumer surveyor in New York. "They're much more experimental. They're open to extreme flavors."
In a May survey by Roper, diners 18 to 29 were 12 percent likelier than average to enjoy Chinese, 18 percent more apt to enjoy Tex/Mex and 33 percent more likely to enjoy Cajun. They were 9 percent less likely to relish American cooking.
"They have a low threshold for boredom," says Marcia Mogelonsky, senior research analyst with Mintel. This reflects in their choices of cuisine as well as their tolerance for slow service. "Their generation was brought up on a very fast-moving culture."
A 2004 survey by Chicago-based restaurant consultant Technomic Inc. found 74 percent of Echo Boomers often choose where they eat by how much time they have. They'd just as soon take a meal away as sit still and wolf it down. While they were growing up, 53 percent of their families used takeout at least once a week. For their parents, the number was only 12 percent.
"In recent years, the growth in restaurant usage has been primarily driven by off-premise dining," says Michael Allenson, a principle with Technomic. "It's likely that, over time, off-premise consumer demand will continue to rise."
By demanding both rapid service and fancy flavors, Echo Boomers have helped fuel the explosion in fast-casual restaurants. "Quick-casual provided an alternative more to that group than anybody else," says Harry Balzer, vice president of market information firm The NPD Group in Port Washington, New York. "They're up about 9 percent this year, although they only account for 2 percent of the total business."
And along with their need for instant gratification—or is it constant gratification?—is their love of technology.
"They're really comfortable with technology," says Sheehan. "They've always had computers, and the Internet's always been available." In her survey, Echo Boomers were 38 percent more likely than their parents to be heavy users of new technologies.
They like gizmos that save them time. The NRA found 15 percent of Echo Boomers had placed restaurant orders directly from self-serve terminals, and 51 percent had used credit cards to pay for fast food.
They also favor wireless Internet service, which allows them to play while they eat. Observes Riehle, "My 12-year-old with his Sony Playstation portable goes to hot zones [wireless access areas], so he can sit and play games with people around the world. At age 12, he's conscious of which restaurants offer hot zones and which don't."
What would the ideal restaurant for an Echo Boomer look like? "They don't have that much money to spend on food, but their knowledge of cuisines is much broader than earlier generations," says Mogelonsky. "Their cooking skills lag behind. So if a restaurant is trying to attract them, make it cheap and interesting."
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