The future is here, and it has shown up armed with unlimited knowledge, Chipotle and cell phones. This tolerant and ethnically diverse group is typically called Generation Z, iGen, or Post-Millennials. The defining factor of this newest generation of shoppers is they were born between the mid-1990s to mid-2000s. They make up 25% of the U.S. population, making them a larger buying brigade than the Baby Boomers or Millennials.
They are the most formally educated generation ever, the most technology-supplied generation ever, and the most globally fluid generation ever. Gen-Z has never known a world without the internet, and the younger ones have never known a world without smartphones. Google has always existed in their world; there is no question that can't be answered. The first generation to grow up entirely in the digital age, they want to know it all, taste it all, and have it all — right now.
By 2020, Gen-Z's will command 40% of consumer shopping, and they spend on average up to 5 hours a day online. This generation will affect the economy and food manufacturers dramatically, considering their favorite items to spend their money on (36%) are food and drinks according to [Visa]. They are a foodie buying force that needs to be reckoned with, ASAP.
Here are 10 things food manufacturers need to know about Generation Z:
1. Brand Loyal? Not So Much
Gen-Z could care less about staying loyal to a brand for loyalty’s sake. They are not interested in having a brand make them “feel” a certain way, convey a particular status, or help them express who they are. You won’t find many of this generation wearing brand names plastered on their goods. Also, in a global economy with so many choices, they see little reason to stay loyal. They make decisions based on what fits their needs, aligns with their ethics, solves their problem, and is most convenient. Brand trust will need to be built and nurtured by alternative marketing platforms, experiences, and technologies.
These young folks are smart and very savvy. They want transparency in every way when it comes to the products they buy. Whether its labeling, sourcing, ownership, messaging, or even social media campaign, they are interested in products that reflect reality — not a false version of a “perfect life.” They can find out about your product and company culture in a matter of seconds. Shoddy reviews, company culture, ethics in sourcing can all be found online, and they research — a lot. They even lean towards mid-tier social media influencers over celebrities. They trust their peers to be telling them what is good, over any person or brand. Brands are going to be expected to be genuine and transparent to stand out. We have a lot more to say about this, check out our whitepaper on Transparency.
3. Fast & Convenient Is Supreme
They are living in an on-demand economy, where anything they want is at the touch of their fingertips. Brands who can deliver faster and more conveniently will rise above the rest. Marketplaces that fulfill consumer demand via immediate access and facilitate convenient provisioning of goods and services is the future of retail. Even when it comes to CPG’s they want quality goods but the ease and convenience of home preparation.
4. Global Taste Buds & Ethnically Diverse
More and more of the world is coming online, and Generation Z views themselves as global citizens. With that diverse exposure, comes the openness and curiosity of “global flavors.” The demand for these innovative flavors will grow, with globalization. The Census Bureau reports that 48% of Generation-Z is non-Caucasian. Being part of the most racially diverse generation in America will be significant to this generation in having the ability to connect to marketing campaigns.
5. Money Matters
Remember this generation grew up during the great recession, and they know the value of a budget or DIY project. They are pretty driven to save, and being more budget-conscious means cost is a huge determining factor for them; unlike their millennial organic food-loving pioneers, who will spend their entire paychecks at Whole Foods. Quality made ingredients are important, but with the crowded and entrepreneurial food market, it has become more affordable for them to access. They understand value and are well aware of what you can and should be getting for your money. 50% of Generation Z looks on their phone for a better price while shopping at a retail store.
The fact this generation is tech-savvy is a given. They also view digital technology as more of a tool than an abstract communal playground. So, what does that mean for food manufacturers? For starters: to reach this generation, you will need to be immersed in the digital world.
61% of Gen-Z researches product on a mobile phone at least weekly.
34% want brands to reach them on social media [Deep Focus].
64% are more likely than other generations to trust somewhat or completely the content on mobile apps from brands, as well as text messages from brands. [Grail Research]
Gaming culture, AR technologies, digital marketplace apps, and social media tools, will be part of this digital marketing frontier to resonate with this generation.
Gen-Z is apprehensive about the world, and they want to make a difference in it. 26% of 16- to 19-year-olds currently volunteer, and 76% are concerned about humanity's impact on the planet. They want opportunities to effect positive change, and we can expect them to become generous givers to charitable organizations as adults. They will lean towards brands that make ethical decisions and give an opportunity to the consumer to make a positive impact. Just making stuff will not be enough, you want to stand for something.
As mentioned above, big brand labels aren’t that valuable to this generation. We’re in a time that is almost a design renaissance for packaging. Everyone has gorgeous and decadent branding now, but Gen-Z will not care as much about beautiful boxes as they will care about labeling that helps them quickly make a decision in an overly crowded market. Bold organizational colors, clean design, clearly descriptive and honest labeling will be what this generation will grab off the shelf. 60% would rather have a cool product than a cool experience [Vision Critical]. Just make sure they are clearly aware of what that product is on the shelf.
9. Leaders Of The Pack
Restaurants like Chipotle or Panera are popular with Gen-Z because they’re accessible, tech-friendly and use clean ingredients. Not to mention, they’re fast. Gen-Z’s have an attention span of four to eight seconds, so patience is not a virtue to them. Plus, these fast casuals offer the ability to make mobile purchases. Brandless is another company that is nailing the Gen-Z market. They have a stripped-down, functional and honest approach to packaging, and they offer quality products at affordable pricing. The buying experience is digitally streamlined, and their social media presence is smart.
10. Open Hearts & Minds
This generation is steeped in reality, yet according to research, they appear to be one of the kindest and most tolerant of recent generations. They care tremendously about the future of their world, and they are accepting of diversity, refusing to label and box people in. They don’t seem to care as much about what you do, whom you love, or what you look like. They just want genuine and authentic when it comes to the brands they will support. They are willing to give you a chance if you can give them what they want and align with their values of tolerance and equality.
This is very exciting for the future of food manufacturers, as long as they can adjust to a quickly changing marketing world. Food brands are typically rooted in genuine stories, community, and culture and can easily find a connecting thread to this generation. Digital technology advancements will be rapidly changing the marketing landscape. The difference between a current 5-year-old and a 20-year-old’s world will be vast due to innovation in technology. Knowing how to be strategic and adjust to this rapidly changing market will be imperative for food manufacturers. The reality is where Gen-Z goes, so goes the world.