Your Best Customer Is Spending Someone Else's Money
Over half of Millennials still rely on their parents financially. That changes what premiumization actually means for your brand.
MY CLIENT WAS PAYING FOR HER GROCERIES AND HER SON’S, TOO.
A former client of mine, I’ll call them Dana to protect the details, spent most of a recent business strategy session telling me about her thirty-two-year-old son, who I’ll call Jordan. Jordan had a full-time job, an apartment, and by every outward measure the markers of a functioning adult life. What Jordan didn’t have was enough left over most months to cover rent, a car payment, and the particular version of grocery shopping that came with wanting to eat the way his friends ate and look the way his social feed told him he should want to look. So Dana quietly covered the gap. Not the whole thing, and not every month, but enough that it had become a line item she’d stopped mentioning to anyone but her financial advisor and, eventually, me, her business advisor.
I’m not here to make fun of or take anyone’s matcha lattes away. That’s not the point, and it’s not even really about this one boy, Jordan. The point is that Dana was, functionally, a hidden co-signer on her own adult child’s discretionary spending, and both Dana and I had no idea how many other parents in their exact tax bracket were doing the same thing until we started digging into it together.
THE NUMBER THAT SHOULD BE RESHAPING YOUR STRATEGY
53% of Millennials, now in their 30s and 40s, still rely on their parents for financial help, according to a Northwestern Mutual study reported by Forbes Advisor this year. That’s not a fringe statistic about a handful of struggling twenty-somethings still finding their footing. That’s over half of the generation currently doing the most CPG purchasing in this country, quietly propped up by a parent’s coin in ways that rarely show up in a brand’s understanding of who’s actually funding the cart.
WHAT “PREMIUM MILLENNIAL SHOPPER” ACTUALLY MEANT, AND WHAT WE MISSED
For close to a decade, brands built entire strategies around the premium Millennial shopper, and the instinct behind that work wasn’t wrong. This generation genuinely does spend differently than the one before it, reaching for wellness positioning, cleaner labels, and ingredients they can defend to their own community without blinking. What most of those strategies never asked is where the money behind that confidence was actually coming from, and whether the purchase decision we were reading as conviction was sometimes something closer to permission, quietly extended by someone else.
ONCE REMOVED: WHAT IT MEANS TO SELL INTO SOMEONE ELSE’S BUDGET
Here’s the part I find genuinely underexamined by most marketers. When a purchase is subsidized once removed, meaning the money didn’t come directly from the person standing in the aisle but from a parent covering something adjacent so that discretionary dollars could stretch further, the brand relationship being built isn’t with one household’s spending logic. It’s with two, and only one of them is visible in any research you’re running. Dana’s support wasn’t earmarked for Jordan’s grocery cart. It went toward rent, so that what Jordan earned could go toward the version of shopping that felt like it reflected who they were. That’s a very different commercial relationship than the one most premiumization strategies assume they’re building, and it’s one that’s invisible in almost every piece of shopper data a brand typically has access to.
WHAT BORROWED MONEY DOES TO ELASTICITY AND LOYALTY
Transparently, this is where I think the industry’s thinking gets genuinely thin, so let me slow down for a spell. Price elasticity models are built on an assumption most of us never say out loud, which is that the tolerance a shopper shows for your price point is a direct read on how much they personally value what you’re selling relative to their own income. That assumption quietly breaks the moment the income being tested isn’t entirely theirs. What looks like low price sensitivity, the shopper who barely blinks when you raise a dollar, might not be conviction at all. It might just be the current width of a parent’s slack, elsewhere in a completely different budget line the brand will never see.
The same distortion shows up in loyalty. A points program or a subscription model reads frequency and spend as devotion, and most of the time that’s a fair read. But when a meaningful share of that frequency is riding on borrowed stability, a brand’s loyalty numbers can be quietly measuring a parent’s financial health as much as they’re measuring genuine preference. That’s not a reason to distrust your loyalty data. It’s a reason to ask which of your most loyal-looking customers are loyal because they chose you, and which are loyal because, for now, they can still afford to.
THE MOMENT YOUR BRAND BECOMES THE FIRST THING CUT
Household budgets don’t erode evenly when a support system tightens. Rent doesn’t get cut. The phone bill doesn’t get cut. Those are the obligations a parent’s help was covering in the first place, and they’re rarely the ones on the table when the help starts to shrink. What gets cut first is whatever felt optional the whole time, which, for a lot of premium CPG purchases, is exactly the category you’re in. The wellness beverage. The specialty snack. The “better” version of something a generic alternative already does adequately. Those are precisely the purchases that were only ever possible because of the slack Jordan’s mom was creating somewhere else in his budget, which means they’re also the first things to disappear the moment that slack tightens.
And that tightening is coming from a direction most premium strategies haven’t priced in at all. It isn’t only about Millennials figuring out their own finances. A meaningful share of the parents doing this subsidizing are themselves approaching retirement with real uncertainty about their own runway, which means the support flowing to their adult kids is, in a lot of households, more finite and more fragile than anyone currently modeling this category is accounting for. A brand built on the assumption of steady premium demand from this generation may actually be standing on a two-generation foundation that’s under pressure from both ends at once. That’s not a reason for panic. It’s a reason to know, category by category and SKU by SKU, which of your products are functioning as habits this shopper would defend on their own income, and which are functioning as a discretionary indulgence quietly underwritten by someone else’s patience.
THE QUESTIONS I’D ASK IF I WERE BUILDING YOUR PRICING STRATEGY RIGHT NOW
I don’t think the answer here is to stop premiumizing for this generation. I think it’s to get a lot more honest about who’s actually footing the bill, because that changes what resilience in your customer base really looks like, and it changes which parts of your growth story are durable versus borrowed.
So here’s what I’d actually ask to understand what our next step might be, because I don’t have the full answer myself yet, not for every category and not for every brand.
If a meaningful share of your premium Millennial target is one bad month away from losing the financial cushion that lets them choose you, are you building something durable, or a temporary alignment of incentives with someone else’s money?
Do you know which of your products are the ones that will get cut first when a household tightens, and are you actively working to adjust your portfolio strategy with this in mind?
And what would change about your pricing, your loyalty program, or your next campaign if you actually knew who was subsidizing the next purchase?
I don’t have a clean formula for this yet. What I do know is that it starts with asking the right question before the subsidy runs out, not after.
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