Gen Z Loves Food Brands, But Are They Willing to Pay For It?

Food plays a pivotal role in people's lives. Not only is it a necessity that people rely on to survive, it is a source of comfort, connection, and identity. This connection with food is something that resonates strongly with Gen Z. Many young consumers find stability and pleasure in just eating and cooking among the constant noise they have to deal with in the world.

Gen Z is willing to spend, but with current financial pressure, their buying habits are changing, especially when it comes to food and drinks.

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Love is High and So Are the Prices

According to the PION100 report Wave 2, 62% of young consumers love spending their money on food and drink, making it the sector Gen Z spends the most on. Even though food and drink is a high priority, Gen Z is still cautious about what they spend their money on. 73% of young consumers now budget carefully and spend an average of $200 on things they feel are worth it.

There are 4 categories that Gen Z falls in when it comes to spending:

• Spending, but cautious 
• Independent cautious
• Parent-supported splurgers 
• Work-hard, play hard

Not only does the financial pressure shape the way Gen Z shops, but it also shapes the way they live and socialize. According to the report, 66% of Gen Z prefer to socialize at home instead of spending their time and money going out to bars, clubs, and events.

How Gen Z receives and spends money matters a lot to them, which is why food and drink brands must build a stronger connection with young consumers to earn their trust and attention. 

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Where Gen Z Finds Their Favorite Food and Drink Brands

With the technological advances made now, it is not that hard for Gen Z to discover a new food and drink brand that interests them. 

According to our PION100 report Wave 2, these are the main discovery channels that helps Gen Z find brands:

• Organic Feed/explore page
• Paid ads
• Influencer/creators
• Word of mouth
• Online marketplaces 
• Search engines 

In the food and drink sector, social media and paid ads are the most reliable ways to capture young consumers' attention. 44% of young consumers discover new brands through organic content that comes across their feeds, while 38% discover brands through paid ads. Social media apps such as TikTok and Instagram are where young consumers go when they want to find a new food and drink brand that interests them. 

Word of mouth and recommendations are also important to Gen Z when trying a new brand, especially on social media. 34% of young consumers discover brands through influencers and creators, while 22% discover brands through word of mouth. According to our Big Love, Small Brands report, creators and influencers can drive about 35% of discovery for food and drink brands. 

By marketing your brand organically and using creators to drive discovery, you would be able to make your brand appear more credible and genuine, which is something that automatically stands out to Gen Z.

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Success Story: How Starbucks Regained Everyone’s Attention

Starbucks is one of the brands on the PION100 list that has made a major comeback. The jumped 18 spots since last year going from #40 to #22 this year. They also earned a 74% love score from young consumers this year. The key to this? They went back to their roots. They began to hire more staff, make faster drinks, and build comfier cafes. Recently, their signature notes on their coffee cups have gone viral, attracting many young consumers and persuading them to buy from them again. Now their sales have grown by 7.1%, and their traffic and spending have increased for the first time in two years.

The moral of the story is that you don’t need to completely reinvent your brand, you just need to stick with your formula and make it better. Gen Z likes brands that are authentic and offer them a unique experience. Straying away from the aspects that make your brand stand out will not get the attention you want from young consumers and will make you less interesting.

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How to Get Gen Z to Choose Your Brand

Since Gen Z is watching their pockets closely, food and drink brands now have to put themselves out there and market themselves as something Gen Z won’t regret spending their money on. Here are a few ways that can help you reach that goal:

1. Make the price worth it.

‍54% of young consumers use student discounts, and usage has risen to 50%, making it a common spending habit for Gen Z. In particular, 34% of young consumers seek deals on food and drink, making it the most deal-seeking sector. Setting up an exclusive deal for young consumers would help build a closer relationship with them. Strategically setting up and using discounts would make your brand seem like it cares about young consumers and their financial situation.

2. Stay consistent and on-brand.

Gen Z likes brands that are real and genuine about the marketing and products that they put out. If you keep revamping your brand, then you will be driving away the Gen Z audience. Sticking to what made your brand successful in the first place will help you in the long run and never fail you.

3. Use social media to your advantage.

Social media is a powerful tool for reaching a wide audience, and nowhere is that more true than with young consumers. By investing in organic marketing and collaborating with content creators will build your brand’s credibility and show up in young consumers' feeds without feeling like an inconvenience.

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Earn the Trust of Gen Z With Pion

At the end of the day, Gen Z is not disengaged from food and drink brands, they’re simply more selective on what brands they want to spend their money on. The food and drink brands that are able to be consistent, marketable, authentic, and inexpensive will be able to win over the hearts and minds of Gen Z consumers.

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