A recent report from The NPD Group describes Gen Z consumers as "an individualistic cohort that embraces personalization and seeks to meld consumerism with a sense of identity." This demographic also eats more RTE snack foods with their meals than other groups — 58% of Gen Zers' meals are made without an appliance — as well as more organic food and beverages.
Like millennials, Gen Z shoppers value authenticity, freshness and purity in their food and beverage products, but the younger demographic places even greater importance on clean eating. These consumers also value brands that support their own personal brand, regardless of the size of that company, while millennials are more interested in smaller brands.
"Food marketers should understand that this generation grew up knowing that food is much more than sustenance; food represents culture and therefore is an expression of who they are," David Portalatin, NPD's food industry advisor, said in a release. "This generation was raised to be real and true to themselves and they expect the same from their foods and beverages."
Other studies have found that Gen Z consumers prefer to patronize brick-and-mortar outlets rather than shop online. Even though many of these consumers have grown up using smart phones, the vast majority still appreciates a hands-on, in-store visit. Still, retailers need to work to perfect their digital shopping experience, as this demographic also expects to engage with their brands online. Online shopping can also help retailers deliver better personalization — a top priority for Gen Z — through data gathered from interactions with mobile apps, shopper loyalty programs and online clicks.
And even though there is a good deal of values crossover between the Gen Z and millennial generations, retailers and manufacturers would be wise to study the differences and make investments accordingly. Gen Zers account for between $29 and $143 billion in direct spending, according to Forbes, while Nielsen reports that Gen Z now makes up 26% of the U.S. population.
Companies might specifically target this demographic by emphasizing better-for-you snacks and beverages such as sparkling water or anything that is labeled as organic, natural, GMO-free or zero-calorie.
NPD Group has also found that Gen Zers go for plant-based meat alternatives such as the Beyond Burger and the Impossible Burger and are fond of ramen noodles, LaCroix carbonated/flavored water, Chobani yogurt, meat snacks such as Fusion Jerky and Jack Links, and frozen Asian and Indian-inspired meals.
Many manufacturers are already aligning with Gen Z priorities because they are working to clean up their formulas. For example, PepsiCo launched a premium soda line in 2016 made with cane sugar instead of high fructose corn syrup, and the company also produces cane sugar-based craft soda lines such as Stubborn Soda and Caleb's Kola to better cater to health-conscious shoppers.
As demand for clean label spreads across shopper demographics, product formulations like this are likely to continue — and will need to as Gen Z continues to grow into its spending power.