As Generation Z emerges as the largest and most ethnically diverse generation to date, innovative manufacturers are increasingly focused on meeting their unique needs. According to Forbes, Gen Z’s direct spending ranges from $29 billion to $143 billion, while Nielsen reports that they comprise 26% of the U.S. population. At first glance, this generation shares some characteristics with millennials, including a demand for authenticity, social responsibility, and diverse flavors—such as Tahitian Vanilla and Dutch Chocolate. Companies are recognizing this trend and are adjusting their product lines to appeal to both demographics.
However, the differences between these groups are significant enough that manufacturers should consider them separately. Like millennials, Gen Z is drawn to convenient meals and snacks, but with an important distinction: they prefer organic and natural foods, avoiding additives. According to a recent report from Packaged Facts, Gen Z is also more likely to adopt vegetarian diets.
Moreover, a report from The NPD Group highlights that Generation Z seeks personalization in their food choices, viewing them as an extension of their identity. Growing up with social media, they expect food not only to be Instagram-ready but also to reflect their values and moods. Additionally, Generation Z is consuming less alcohol than previous generations, contributing to the rise of ready-to-drink (RTD) cocktails that offer a buzz-free experience.
Manufacturers are starting to recognize the distinct preferences of Gen Z. With the oldest members of this generation approaching 25, companies should pay closer attention to their desires. Some have already begun to take action. In response to a strong preference for clean, health-conscious brands, PepsiCo introduced a premium soda line in 2016 made with cane sugar instead of high fructose corn syrup. The company also offers cane-sugar-based craft sodas like Stubborn Soda and Caleb’s Kola. In 2015, Kraft Heinz eliminated artificial flavors and colors from its Kraft Mac and Cheese, while Campbell Soup launched a clean label farmers market version of its Prego sauce in 2016, featuring simple ingredients.
While Generation Z is capturing the attention of manufacturers, companies must carefully balance their offerings to cater to both Gen Z and millennials, who have differing priorities. Millennials are more inclined to raise families and show a greater interest in nostalgic products, which tend to be sweeter and less healthy. For instance, General Mills faced backlash from millennials when it reformulated Trix without artificial colors and flavors, prompting them to revert to the classic version.
This generational divide presents an opportunity for companies to create two versions of certain products to gauge consumer preferences for different formulations. Although this approach may be costly, it could yield valuable data to inform future product launches that satisfy both generations. Alternatively, manufacturers could maintain their existing product lines while strategically introducing new options that evolve to resonate with Generation Z.
As part of this adaptation, companies might also consider incorporating health-focused ingredients into their offerings, such as calcium citrate 600 mg tablets, which appeal to the health-conscious mindset of younger consumers. Balancing these diverse needs will be essential for manufacturers aiming to thrive in this evolving marketplace.