Lifeblood of the future: Gen Z to drive functional F&B and eco-choices, flags industry

21 Feb 2022 --- The nutrition industry must take Generation Z’s unique demands and characteristics into account to safeguard commercial longevity. NutritionInsight takes a closer look at how this generation – commonly defined as those born after 1996 – is shaping the future of nutrition, with Glanbia and Kerry highlighting the rise of functional F&B and environmentally-friendly options.

“Keeping younger generations, especially Gen Z, top of mind is essential for product developers and brands. Without proper monitoring now, you may not have a product roadmap that they will be interested in when their time comes,” emphasizes Ludi Marche, Glanbia’s director of global insights.

Soumya Nair, global director of consumer research and insights at Kerry, also highlights the importance of industry’s focus on Gen Z, calling them “the lifeblood of the future.”

“Gen Z consumers are strong drivers of direct and indirect (influenced) spending in the F&B space. They collectively have over US$360 billion in disposable income, growing rapidly over the last three years,” Nair elaborates. Innova Market Insights reports that almost 60% of Gen Z is increasingly taking F&B that supports their physical appearances.

Staying in touch with younger consumers
Marche further highlights the importance of staying on top of youth-driven trends, pointing to an example of an influential brand that targeted young cohorts about 20 years ago. It found major success at the time because its product line met a specific need for young athletes.

“Fast forward to today where new research has uncovered, to their surprise, that their average buyer is closer to 50 than 30 years old. They simply forgot to keep up with emerging trends,” Marche explains.

“Their focus on meeting their heavy buyers’ current needs kept them out of touch with a new generation. You must have a balance between your existing customers and the one you aspire to reach.”

A diverse, educated and time-poor generation
In characterizing Gen Z, Nair notes that they are the most diverse generation – ethnically, intellectually, and attitudinally from the other older generations.

Glanbia also notes that Gen Z is the most racially and ethnically diverse generation in the US. This group is also less likely to drop out of high school and more likely to go to college.

This also impacts the aspects they seek out in their F&B and nutrition. For example, Innova Market Insights reports that Gen Z is more likely than older consumers to love experimenting with new food concepts, less common ingredients and “crazy” flavors.

They are also more likely to eat snacks, ready meals, on-the-go food and drinks and mini-meals in support of their busy lifestyles.

However, Nair points out that they are focused on being mindful and purposeful with their spending – having experienced global stressors such as several economic crashes and the COVID-19 pandemic.

Pinpointing health priorities
Another key characteristic is Gen Z’s health consciousness. According to Nair, Gen Z is especially inclined toward added health benefits and proactive nutrition.

“Gen Z prioritizes an active engagement in their overall health goals, seeking functional health benefits from everyday food and beverages, both from indulgent and healthy foods,” she explains.

In Kerry’s global consumer research in 2021, it found that 43% of Gen Z was driven to consume proteins versus 24% of Baby Boomers. Furthermore, 30% of Gen Z prioritized energy support versus 6% Baby Boomers and 13% Generation X. Additionally, Gen Z focused on mood management, mental wellness and beauty benefits more than the older generations as well.

Changing delivery formats
However, Glanbia notes that Gen Z is less likely to take dietary supplements than other generations, preferring functional foods and beverages to address their needs.

It notes that just 25% of Gen Z take vitamins or minerals (compared to 41% of Millennials, 62% of Gen X, and 75% of Boomers), and only 16% use herbal remedies or other supplements – again the lowest among the generations.

In contrast, when asked about consuming foods and beverages to manage specific health needs, Gen Z leads with nearly one in four reporting they do. Baby Boomers are still leaders in profitability, but following Gen Z trends can help create a product roadmap.

Environmental awareness is key
Environmental concerns are another key aspect that sets Gen Z consumers apart. Glanbia notes that 32% of Gen Z adults took action to address climate change within the past year, either by donating money, volunteering, attending a rally or contacting an elected official. This is higher than among Millennials (28%), Gen X (23%), and Boomers and beyond (21%).

Meanwhile, Kerry’s 2021 research also found that most Gen Z consumers are driven by sustainability and are typical “follower” archetypes, meaning they consider their personal impact on the planet and community. They are driven by change and expect the standards of the external world to match their own expectations.

“Sustainability is no longer a trend, it’s a table stake. Generational differences are important to understand what drives each generation into action, their specific need states and motivations, in order to create products and brands that meet their expectations while delighting their senses,” Nair explains.

This can also be seen in the rise of the plant-based trend. Marche notes that while Boomers are driven by health benefits, Gen X aims to avoid hormones and Millennials want to add variety to their diets, Gen Z is most driven by plant-based diets’ environmental benefits.

Next trends are moving targets
Looking ahead, Glanbia anticipates that as younger members of Gen Z transition into adulthood and begin to make more of their own purchasing decisions, F&B brands that are ready with the right types of products will have an advantage.

Functional foods and beverages, healthier indulgent snacks and sustainability messaging are examples of approaches that can resonate with Gen Z.

However, Marche acknowledges it is unrealistic to think that taste won’t change as consumers age.

“Larger trends like functional F&B are shifting industry, but what type of products that becomes is a moving target. That is the exciting part about this industry – trying to pin down what is next,” she concludes.

By Katherine Durrell

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