Generation Z – concrete insights for the food industry

Generation Z is not an unfa­mil­iar con­sumer group. We have had them in our midst for many years; the old­est will be thir­ty in just a few years. However, the con­cept is some­what younger. It emerged in the mid-00s and has since been used exten­sive­ly to refer to those born from the mid/​late 1990s through to the ear­ly 2010s. Exactly which years apply is dis­put­ed by scholars.

Digital natives

What we can be sure of is that they are more edu­cat­ed than any pre­vi­ous gen­er­a­tion. They are aware of the world and the prob­lems and chal­lenges fac­ing human­i­ty – not least the cli­mate threat. And health and sus­tain­abil­i­ty have a major impact on their consumption.

They are born with a smart­phone in one hand and a tablet in the oth­er. They are often referred to as ‘dig­i­tal natives’. Social media isn’t just an amuse­ment for Generation Z. It’s where many find knowl­edge, answers to ques­tions and form an iden­ti­ty with like-mind­ed people.

Generation Z comes of age

Over the next two decades, this dig­i­tal gen­er­a­tion, edu­cat­ed and aware of health and sus­tain­abil­i­ty, will enter the adult world. How will this affect our indus­try? What should you do to ensure your busi­ness doesn’t get left in the dust? Let’s explore that, with the help of a study from EIT Food, among others.

The world as Generation Z sees it

EIT Foods asked more than 2,000 young peo­ple aged 18–24 from the UK, France, Germany, Poland and Spain about their views on the food indus­try and their habits and out­look on life.

Young peo­ple look at food, health and con­sump­tion from a holis­tic per­spec­tive. Ingredients and pro­duc­tion meth­ods must be ‘fair’, with respect to the con­sumer, the peo­ple in the pro­duc­tion chain, ani­mals and nature, and the climate.

Food also serves as a mark­er of iden­ti­ty. It is impor­tant to con­sume the ‘right’ brands. These are brands that align with and con­firm their per­cep­tions of the world.

More than half said they use social media to get advice on healthy eating.

Get what they want

Growing up, Generation Z had a lot of say in what was eat­en at home. Their par­ents’ gen­er­a­tion has approached them in a very dif­fer­ent way com­pared to pre­vi­ous gen­er­a­tions. This is a gen­er­a­tion that is used to influ­ence and get­ting its way.

But what do they want? What are their dis­tinc­tive pref­er­ences and habits? And how can you reach them and influ­ence them? Let’s look at three over­ar­ch­ing insights that you can work on.

Insight 1: Soft spot for snacks

Snacks are a favourite among Generation Z. It may seem con­tra­dic­to­ry when all you hear is their inter­est in health and healthy eat­ing. Snacks sound bad; many like­ly asso­ciate snacks with sweets and unhealthy foods. But if we broad­en our pic­ture a bit, snacks become more mul­ti­fac­eted. After all, a snack can be any­thing from bev­er­ages, smooth­ies and yoghurt to bars, sand­wich­es, mues­li and oth­er prod­ucts that don’t have to con­tain emp­ty calo­ries in the form of sug­ar and fat.

Scattered meals

Generation Z have prop­er meals, of course, but the por­tions are small­er and the eat­ing is more spread out over the day.

Their fond­ness for scat­tered meals can be explained by the fact that many live hec­tic lives with­out fixed eat­ing rou­tines. A quick snack between lec­tures and leisure activ­i­ties is more the rule than the exception.

The chal­lenge is to devel­op healthy snacks. According to the EIT Foods study, 73% find it dif­fi­cult to eat health­ily when they are at school, at work or on the go.

The versatile snack

Tasty, sat­u­rat­ing and healthy snacks are in them­selves an oppor­tu­ni­ty for food pro­duc­ers who want to reach Generation Z. The oppor­tu­ni­ties for vari­ety and dif­fer­en­ti­a­tion are already great in this prod­uct seg­ment. But those who think ahead can take this to a new level.

Imagine a ready-made prod­uct that you can renew rel­a­tive­ly quick­ly and with rel­a­tive­ly lit­tle effort, depend­ing on what is hap­pen­ing in the mar­ket and what is in demand. Picture your­self a basic prod­uct that has all the desired fea­tures, but where one of the fea­tures can eas­i­ly be mod­i­fied to cre­ate new expe­ri­ences of the prod­uct. This is a scal­able prod­uct.

Like scal­able pro­duc­tion, the scal­able prod­uct is about increased out­put as a result of increased input. But unlike pro­duc­tion scal­a­bil­i­ty, where it is the num­ber of units pro­duced that increas­es, prod­uct scal­a­bil­i­ty is about increas­ing the num­ber of vari­ants of the product.

Let’s look at a real-life exam­ple that has real­ly tak­en prod­uct scal­a­bil­i­ty to heart.

A successful example

One brand that has a scal­able prod­uct is Marabou. It is one of Scandinavia’s largest choco­late brands and is part of Mondelez.

In the 1950s, they found the recipe for suc­cess, both lit­er­al­ly and fig­u­ra­tive­ly, for milk choco­late that sells. For decades, it has exist­ed with just a few flavours: pure milk choco­late, milk choco­late with chopped hazel­nuts, milk choco­late with whole roast­ed hazel­nuts, milk choco­late with raisins and chopped almonds, and milk choco­late with orange crisp.

But a decade or so ago, some­one realised that milk choco­late is scal­able. Why stop at hazel­nuts, raisins and almonds, and orange crisp? Why not use our own and oth­er brands’ flavours?

Nowadays Marabou milk choco­late with Oreo, Digestive, Salty Crackers TUC, Toffee, pop­corn, cook­ie dough, and many more are avail­able. Yes, in fact, 24 vari­eties at the time of writing!

Reason to communicate

Scalable prod­ucts also allow you to com­mu­ni­cate. And if you can find a cre­ative and effec­tive way to com­mu­ni­cate, you’re well placed to make the most of your scalability.

Insight 2: Transparency and openness

Generation Z is edu­cat­ed and health-con­scious, yet finds it dif­fi­cult to make healthy choic­es. The EIT Foods sur­vey found that 61% find it dif­fi­cult to eat health­ily because of con­flict­ing information.

Almost 8 out of 10 young peo­ple who respond­ed to the EIT Foods study ask for labels that tell them how the prod­uct is pro­duced. A sim­ple list of ingre­di­ents is not enough.

Almost as many (3 out of 4) think that food man­u­fac­tur­ers need to be more trans­par­ent about ingre­di­ents and processes.

Overall, brands need to become more open and trans­par­ent. Generation Z wants food pro­duc­ers to detail the impact of their prod­ucts on health, sus­tain­abil­i­ty, the envi­ron­ment, ori­gin, and more.

Go digital with the packaging

The first step to becom­ing more trans­par­ent and answer­ing every­thing Generation Z wants to know about your prod­uct is to explain in sim­ple and clear text and pic­tures what ingre­di­ents are used and how they are made.

One pos­si­bil­i­ty is QR codes on food pack­ag­ing. QR is short for Quick Response. And that’s exact­ly what a QR code on a pack­age can be used for: to pro­vide a quick answer about the ori­gin of prod­ucts, their impact on the envi­ron­ment and, not least, their effect on health.

Generation Z always car­ries a smart­phone. When the phone’s cam­era is point­ed at the QR code, a web page opens. There you can give the con­sumer in-depth infor­ma­tion about the product.

Of course, you should go one step fur­ther and offer the con­sumer the oppor­tu­ni­ty to inter­act with you. For exam­ple, the abil­i­ty to chat with cus­tomer ser­vice to get answers to ques­tions. Or why not share recipes that involves your prod­ucts? The pos­si­bil­i­ties are almost endless.

Be where Generation Z is – on social media

Another step to becom­ing more trans­par­ent and answer­ing every­thing Generation Z wants to know about your prod­uct is to be where they are and inter­act with them on equal terms.

Generation Z uses apps more than four hours a day on aver­age. And that time doesn’t even include gam­ing time. They spend a lot of time on social media. 9 out of 10 are online sev­er­al times a day. Half say they’re online almost constantly.

YouTube, Instagram and Snapchat are among their favourite online plat­forms. Right now, it should be added. What it will look like in two or three years, no one knows. That’s why it’s impor­tant to stay on your toes and keep up with devel­op­ments. Your goal is to be where Generation Z is.

Be social on social media

Generation Z expects to be able to inter­act with brands on social media. Some things to consider:

• 78% use social media to get to know new brands.
• 76% use social media to inter­act with brands and companies.
• 61% of Generation Z con­sumers want com­pa­nies to get to know them bet­ter based on their social media activity.
• 52% of Generation Z con­sumers expect com­pa­nies to read and analyse their social media posts.

Generation Z uses social media for social inter­ac­tions. And they expect busi­ness­es to do the same.

Show what you do and tell us why. Answer ques­tions quick­ly and make it human-to-human. Seek out dis­cus­sions that direct­ly or indi­rect­ly relate to your prod­uct and dare to par­tic­i­pate on equal terms.

Co-creation with Generation Z

The bold­est step to become trans­par­ent and meet the demands of Generation Z is to give con­sumers the oppor­tu­ni­ty to be part of the devel­op­ment and mar­ket­ing of your prod­ucts. That’s co-cre­ation.

Co-cre­ation cre­ates par­tic­i­pa­tion and loy­al­ty. And not least, it sat­is­fies one of the most dis­tinc­tive char­ac­ter­is­tics of Generation Z: man­i­fest­ing their indi­vid­ual iden­ti­ty. Generation Z is not only eager for more per­son­al prod­ucts but also will­ing to pay a pre­mi­um for prod­ucts that high­light their individuality.

Learn from others

It’s not just the food indus­try that needs to become more trans­par­ent and respond bet­ter to crit­i­cal ques­tions from Generation Z. It applies to all indus­tries. How do com­pa­nies in fash­ion, fit­ness, or bank­ing and finance reach out to and build rela­tion­ships with Generation Z? How do they demon­strate trans­paren­cy and open­ness? Discover, explore and learn!

Insight 3: Take a stand!

Generation Z is attract­ed to brands that take a clear stand on impor­tant social issues. That doesn’t mean your brand should take a stand on just about every top­ic there is. Brands that want to be the best at every­thing and be friends with every­one don’t have the same cred­i­bil­i­ty as one that takes a bold stand on a spe­cif­ic issue.

Purpose and core values

The posi­tion must be hon­est and based on a gen­uine opin­ion. This is impor­tant, not only to be per­ceived as authen­tic by con­sumers but also to have the courage to stand up when not every­one agrees.

Start with yourself.

What is your pur­pose - your rea­son for being. Making mon­ey is not a pur­pose. It’s a result. Nor is it your out­put. It is only a means. The pur­pose is to accom­plish some­thing based on insight or belief. What is that insight or conviction?

What core val­ues do you stand for? Forget the usu­al plat­i­tudes about open­ness and trans­paren­cy. Answer hon­est­ly what time­less prin­ci­ples guide every­thing and every­one in your com­pa­ny. Core val­ues are so fun­da­men­tal that they rarely, if ever, change. Not even if it cost to keep them.

The core topic

Only when you know the brand’s pur­pose and core val­ues can you find a ques­tion to con­sid­er; the ques­tion should help achieve your pur­pose and be con­sis­tent with your core values.

Don’t for­get Generation Z. For them, it’s impor­tant that brands dare to take a stand. But what you choose to take a stand on is also rel­e­vant to them.

If you want to reach Generation Z, it’s a good idea to pri­ori­tise a core top­ic that also engages many in Generation Z and espe­cial­ly those you see as your tar­get audience.

Practise what you preach

To take a stand is also to expose one­self to scruti­ny and crit­i­cism. You have to be pre­pared for that, so it’s impor­tant to prac­tise what you preach.

For exam­ple, assume that men­tal health is a core top­ic for your brand. The world sees that you are pas­sion­ate about this and doing good things on this top­ic. Slowly but sure­ly, the tar­get audi­ence shows their trust in the brand by choos­ing it and rec­om­mend­ing it to others.

But one day some­one notices sys­tem­at­ic harass­ment and bul­ly­ing at one of your subcontractors.

The right partners

It may seem that it is not your fault or respon­si­bil­i­ty that there are prob­lems with one of your sub­con­trac­tors; in today’s soci­ety, with com­plex sup­ply chains, it is impos­si­ble to keep track of all the parts. But many in Generation Z make no dis­tinc­tion between your com­pa­ny, your brands and your sub­con­trac­tors and part­ners. For them, it’s the same body.

If a scan­dal affects a sub­con­trac­tor or part­ner, or if your brand is seen in the com­pa­ny of bad busi­ness­es, it affects you whether you think it’s fair or not.

This is per­haps pri­mar­i­ly a chal­lenge for large and estab­lished food com­pa­nies with a myr­i­ad of sub­con­trac­tors and part­ners. For small­er and medi­um-sized com­pa­nies, it may be eas­i­er to mon­i­tor the ecosys­tem they are in. And for young and start-up com­pa­nies still estab­lish­ing an iden­ti­ty, there is much to be gained from find­ing oth­er com­pa­nies with sim­i­lar val­ues, approach­es and practices.

Consistently transparent

Even if it feels unfair to be affect­ed by some­thing that some­one else has done, you have every­thing to gain by admit­ting that it has gone wrong and that you have a responsibility.

A sur­vey on Generation Z by McKinsey shows that 80% refuse to buy prod­ucts from com­pa­nies that have been involved in a scan­dal. At the same time, McKinsey high­lights that Generation Z is more tol­er­ant of scan­dals than oth­er con­sumer groups – if mis­takes are addressed and cor­rect­ed, that is.

Being trans­par­ent and open in com­mu­ni­cat­ing with Generation Z is per­haps most impor­tant when it is the most dif­fi­cult to do so.

Act now!

Making prod­ucts for the new gen­er­a­tions is an excit­ing and, not least, impor­tant job. The shift in atti­tudes and food pref­er­ences and the con­cern for health and sus­tain­abil­i­ty is forc­ing you as a food pro­duc­er to keep up with inno­va­tion and prod­uct development.

Digital and social plat­forms offer great oppor­tu­ni­ties to work cre­ative­ly and effec­tive­ly with com­mu­ni­ca­tion and impact. Both when it comes to mak­ing your brand and prod­ucts vis­i­ble, and when it comes to work­ing on the major social issues that engage your tar­get audience.

We are in a trans­for­ma­tion right now. Food pro­duc­ers who get inno­va­tion, prod­uct devel­op­ment and mar­ket­ing right can turn young con­sumers into life­long customers.