Shared from Food Business News
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NEW ORLEANS — “Nobody cares about millennials anymore,” said Larry Levin, executive vice-president of consumer and shopper marketing at Information Resources, Inc. “Everybody cares about Gen Z now.”
Generation Z, the diverse and digitally driven demographic of 6- to 25-year-olds, will soon surpass millennials as the world’s most populous generation and already wields significant buying power in the marketplace, according to panelists speaking at a June 4 session at IFT19, the Institute of Food Technologists’ annual meeting and food expo in New Orleans.
“This group makes $16 a week in allowance,” Mr. Levin said during the presentation. “You’re talking about a $40 billion buying power. Forty billion dollars, to put a little context around that, is about the same as the snacking market.”
Gen Z consumers spend more of their money on food than previous generations, added Tim Benner, director of consumer insights at Pizza Hut U.S.
“Right now, they’re spending about 20% of their income on food, which is more than they’re spending on clothes and a lot of other different things,” he said.
Seventy-six per cent of Gen Z consumers use food service once a week or more, which is slightly less than millennials but above the overall consumer average of 71%, said Robert Byrne, senior manager, consumer insights at Technomic Inc.
“Restaurants are the malls of today,” Mr. Byrne said. “Gen Z still values that in-restaurant experience. It’s a social time for them. Think about it. If I’m in this digital world 24/7, reality, talking to my friends, is a break.”
These consumers are more likely to buy on impulse than other generations, but cost is a key driver in purchase decisions.
“Mom and dad may have lost jobs when they were growing up,” Mr. Levin said. “They saw a tough economy in their own houses, and as a result, two-thirds of them say price is a motivator.”
Fifty-five per cent of Gen Z typically choose restaurants with lower prices, compared to 45% of all others, Mr. Byrne said.
Still, brands are important to Gen Z, who tend to have negative perceptions about private label, Mr. Levin added.
“One thing we’ve noticed is there is a little bit of a stigma around private label right now for Gen Z,” he said. “And that’s because they feel like ‘maybe it says something about my family if I buy a private label product,’ and that’s something they’ll probably grow out of over time…
“They also do buy on brand names because remember that at the end of the day what they are. Teenagers … If you’re a teenager, you still care what people think … Brands are a status, and I think it’s really important that you think about ways that you’re going to establish relevancy with this group of consumers. It’s one thing to be a brand; it’s another thing to be a partner. You’ve got to think about how to be a partner to this segment because they care about your story … more than any other generation.”
Gen Z are less likely to try new flavors than other generations and prefer familiar foods and ingredients, Mr. Byrne said.