Manufacturers target Gen Z with better-for-you beverages
- Nearly half of surveyed Gen Z college students said "healthy/good for you" claims are their entry points for trying new beverages, according to a survey from Beverage Marketing Corp. and Fluent, a college marketing and insights agency.
- The health claims that resonated most with this demographic were "all-natural" (52%), "low-calorie" (37%), "organic" (36%), "vitamin-enhanced" (31%), and "zero-calorie" (27%). About half said they try to avoid beverages that contain artificial sweeteners, flavors, preservatives, or high fructose corn syrup, and just over half consider cane sugar as a healthier sweetener.
- Bottled water was the beverage of choice for this age group because it is healthier, more convenient, and easier to find, surveyed students said. Coffee and tea followed as the next two most-purchased beverage segments for Gen Z.
Millennials remain a key target demographic for food and beverage manufacturers. However, Gen Z's preferences give a glimpse of where the beverage industry might be heading.
Bottled water is already on its way to replace soda as the No. 1 beverage in the U.S. Both still and sparkling bottled water are set to be strong assets for predominately soda-making companies like Coca-Cola and PepsiCo, as soda consumption has declined for now more than a decade.
However, soda companies could start to bounce back if they give these younger consumers what they say they want — cane sugar over high fructose corn syrup. Soda companies recognize this trend: PepsiCo recently announced the launch of its new premium soda line 1893, which is made with cane sugar, and it also has made forays into cane sugar-based craft soda lines like Stubborn Soda and Caleb's Kola.
Gen Z could also impact another fast-growing category: energy drinks. Energy drinks saw 8.1% volume growth last year, according to IRI, but that growth could slow as Gen Z becomes a larger percentage of the purchasing consumer base. Only 8% of surveyed Gen Z students named energy drinks as their go-to for a "pick-me-up" beverage, behind coffee (49%), brewed tea (15%), bottled water (13%), and soda (13%).
Energy drinks have been a diversification strategy for soda giants like Coca-Cola, which purchased a 16.7% stake in Monster last year, but that strategy could be short-lived if energy drink makers can't position their offerings as better-for-you options that appeal to Gen Z.
- Food Business News How to quench Gen Z's thirst for healthy hydration