Millennials “fundamental shift” Causing Investor Re-Think

October 2014

Profits are plunging at the world’s junk food king McDonalds and Coca Cola isn’t fairing much better amid signs that US customers want healthier choices.

A trend is emerging where customers are turning their backs on cheap burgers and fries and sugar filled fizzy drinks.

The move was most pronounced amongst so called “millennials”, sparking anxiety amongst analysts and investors who fear that the recent decline in demand for fast food is the start of a more fundamental shift.

Many of them are gravitating towards so called “fast casual” restaurants, which are slightly more expensive than McDonalds, but are perceived as offering better quality choices.

McDonalds has already tried to combat America’s drift away from junk food, by offering more salads and healthier dishes alongside traditional staples like chicken nuggets or Big Macs. However, the complex menu has slowed service, exacerbating the problem.

Like McDonalds, Coca Cola has been struggling to adapt to customers changing tastes. Americans have fallen out of love with high sugar, high calorie fizzy drinks, and are seeking out healthier alternatives instead.

Coca Cola has dealt with this by introducing a raft of low sugar alternatives to classic Coca Cola, including the zero-calorie Coke Zero. However, customers are growing increasingly concerned about the potential negative effects of the artificial sweeteners those drinks use.