Gen-Z customers and their evolving needs and preferences are a key focus for the food and beverage industry—and rightly so. Born between the mid-1990s and late 2010s, Gen-Z is one of the largest demographics in the United States, encompassing more than 68 million people. As such, they represent a huge target market for food and beverage (F&B) companies and will only become more critical to future growth as they age and gain more disposable income.
Yet connecting with this highly diverse, tech-savvy, and socially conscious age group is unlike other age groups. They share some commonalities with Millennials, such as a desire for sustainable products and custom-tailored experiences. However, Gen-Z takes these desires to another level and isn’t easily fooled by hollow marketing that’s more style than substance.
In short, F&B companies need to take the needs and desires of Gen-Z very seriously. Nothing less than a commitment to show your company cares about the same things as Gen-Z consumers will catch the attention of this group. And the following three areas are where your company should focus most of its efforts in attracting Gen-Z shoppers.
Gen-Z is a generation that cares more about sustainability than any other age group. A 2021 survey by the International Food Information Council (IFIC) found that 73% of Gen-Z respondents were more concerned about the environmental sustainability of their food choices than older generations. With each year, sustainability will continue to become increasingly important to consumers, and Gen-Z is the generation leading the charge in this shift.
As for how F&B companies can boost their sustainability efforts, the easiest way to start is by switching to environmentally friendly packaging, something many major brands have already committed to. Other sustainable efforts include reducing your company’s carbon footprint—particularly along your supply chain—using local and seasonal ingredients and supporting environmental causes.
The key to all these sustainability efforts is transparency. You must be as open as possible with your customers on how your sustainability drive is progressing. If this is your company's first time getting under the hood on this issue, you won't like what you find. Food waste accounts for billions of pounds in lost products and massive greenhouse gas emissions. Yet rather than trying to bury any unpleasant findings, you should meet them head-on. You can create a PR success story by publishing the results of your sustainability efforts.
Closely related to sustainability, ethical sourcing is another area that Gen-Z consumers are becoming increasingly interested in and vocal about. The expectation is that businesses should adhere to strict ethical standards when sourcing products and raw materials. This involves, for instance, avoiding doing business with suppliers or vendors that damage the environment, exploit workers, or engage in unfair competition. In short, ethical sourcing is about due diligence before selecting a supplier or vendor.
Beyond the moral aspect, there is a broad range of reasons why ethical sourcing should be a priority for businesses. For example, having an ethically conscious approach to business can do wonders for improving your company's reputation, which will not only please customers but also boost employee recruitment, retention, and morale. There's also the legal aspect, which will become more important as governments introduce additional regulations on carbon emissions and the use of renewables.
When implementing an ethical sourcing policy, you'll need to outline the criteria that each supplier will be measured against. These criteria can be based upon your company's existing sustainability policies, or, if these don’t yet exist, you can look to the United Nations Guiding Principles for Business and Human Rights. Ensure you communicate these standards internally and make them an embedded part of your sourcing process. You’ll also need ongoing audits to ensure your suppliers aren’t falling behind your ethical standards.
Gen-Z customers are digital natives and expect businesses to be technologically savvy. This is particularly true regarding social media, as became extremely clear during the pandemic when Gen-Z's intrinsic digital intelligence led to an explosion in creative new homemade meals on social media.
F&B companies interested in capitalizing on Gen-Z’s use of social media can do so by partnering with prominent celebrities and influencers. Through these collaborations, F&B brands can establish unique marketing angles that speak directly to their target customers through giveaways, recipe competitions, and challenges.
Of course, social media is just one way a brand can leverage technology for greater Gen-Z engagement. Other approaches include increasing customer convenience by incorporating technology into your business operations. For instance, self-service kiosks, mobile ordering, and cashless payment options are all the rage. However, such services are increasingly viewed as an expectation rather than a bonus. As time goes on, the novelty of these technologies will begin to fade, and companies will need to make them an integral part of their brand lest they lose out to more technologically savvy competitors.
Technology can also provide greater customization to suit the individual needs of each customer. Gen-Z shows a particular proclivity toward personalization in their shopping experiences, such as the ability to customize their meals or have a range of different toppings and flavors. As such, F&B companies should consider ways to enhance customization through their online ordering apps. It may even be worth adding a “pizza tracker” type function that allows customers to see where their meal is in the prepping and delivery process.
Gen-Z is a generation that has very clear ideas of what it wants. While the above-mentioned trends will likely hold even as this generation ages, we can expect new habits and preferences to evolve. With that in mind, F&B companies and their marketing teams should watch this generation, as their needs and tastes will likely shape future growth and success.