For many years, millennials have dominated trends in the coffee sector. As the largest age demographic in the US, it has been vital for businesses to cater to their demands. However, the influence of the generation after millennials, known as Generation Z, is growing rapidly.
Defined as anyone born after 1995, today Generation Z account for some 24% of US citizens, putting them on course to become the largest age demographic by 2026. While previously considered too young to exert any influence, increasing numbers are now entering the workforce, prompting companies to start taking note.
Read on to find out more about Gen Z coffee trends and how specialty coffee roasters can successfully cater to this growing demographic.
See also: Understanding Millennial Coffee Trends
How Are Gen Z Consuming Coffee?
According to recent research by management consulting firm McKinsey & Company, Gen Zers have approximately $150 billion in spending power in the US alone. Alongside millennials, this makes them one of the most influential generations of shoppers – and their numbers are only set to increase over the next few years.
In 2017, the National Coffee Association (NCA) included statistics regarding Gen Z in its National Coffee Drinking Trends report for the first time, demonstrating how their growing influence is having an impact on coffee market trends. They also added cold brew and nitrogen-infused coffee drinks as new categories, both favourites among younger generations.
One of the NCA’s most revealing findings concerned the preference for “gourmet” coffee drinks among Gen Zers compared to former generations. This is supported by a 2020 Packaged Facts report, which found that consumers aged 18-24 were more than twice as likely to consume “gourmet” coffee than coffee drinkers over 60. Gourmet coffee, in this context, is defined as premium, non-instant arabica or arabica blend coffee products.
However, Gen Z are not just leading a trend towards higher quality coffee; they’re also having an influence on the way coffee is consumed. In an article for the NCA’s blog, Scott Mark explains that the fast-paced lifestyles of younger consumers is shaping their coffee drinking habits.
“They’re accustomed to a world of instant gratification,” he writes. “Online shopping with two-day delivery is the norm, and groceries can be delivered without having to leave the house. Gen Z favours simple, convenient meals that match their on-the-go lifestyle. More so than other generations, Gen Z meals include ready-to-eat snack foods.”
Indeed, in 2018, ready-to-drink (RTD) and cold brew coffee were Gen Z’s most-frequently purchased drinks, according to Technomic’s 2018 Generational Report. RTD and iced coffees are often perceived by consumers to be healthier than carbonated soft drinks and energy drinks, while still providing a caffeine boost. More than 65% of 18-24 year olds in the UK believe that iced coffees are a better alternative to sugary drinks.
Therefore, to appeal to Gen Z coffee consumers, specialty roasters may consider creating a high-quality arabica blend RTD to offer in coffee shops and convenience stores.
A Focus On Transparency & Traceability
The emergence of third wave coffee culture involves not only a greater culinary appreciation for coffee, but also full transparency and traceability at every stage of its journey from seed to cup.
Gen Z coffee consumers, in particular, value transparency and traceability in the supply chain. As well as wanting to know where their coffee is grown and who grew it, they also want to ensure the process is ethical and sustainable.
“Members of Generation Z seek out brands that support their story, and they are willing to use them regardless of a brand’s size,” Scott writes in the blog post for NCA. “These consumers are passionate about their values and pay more attention to how brands align with them.”
With an increasing push for more corporate social responsibility, Gen Z want to know where and how products were sourced, demanding more transparency, traceability, and direct trade.
They prefer clean, transparent labels, and are prepared to switch brands if they decide they no longer match their values. Indeed, studies by the Food Institute found that only a third of Gen Z coffee consumers stick to the same brands, marking a stark contrast to the attitude of older generations.
Specialty coffee roasters can attract customers and encourage them to remain loyal to their brand by providing accessible information about their coffee. An effective way to do this without compromising on a minimalist design is to include a QR code on the side of the packaging. A QR code is a square barcode that consumers can scan with their smartphones to learn more about products by directing them to websites, social media pages, and more.
The Cerrado Coffee Growers Federation is one organisation that have utilised QR codes to improve traceability to notable success. Coffee from Cerrado Mineiro in Brazil is provided with QR codes that, when scanned, provide information about the farm, the coffee variety, the processing method, and lot size.
Maximising The Coffee Experience
While Gen Zers undoubtedly value convenience when it comes to coffee, studies show that they also look for coffee that offers an experience, such as a multisensory atmosphere.
Part of the reason for this is the widespread use of social media among young people, in particular, Instagram. Mastermind Consulting, an Australian marketing strategy consultancy, explains that many brands have recognised the benefits of creating “Instagrammable” interiors, packaging, and experiences.
“By creating packaging or an environment that is just pleading to be photographed and shared on Instagram, you are more than halfway to encouraging a customer to create content,” writes Trish Barry in a blog post on their website. “[Once shared], this content will be seen by their friends and followers who already trust their opinion.”
Creating coffee packaging that’s “Instagrammable” can be an effective way of marketing your coffee brand. Not only will it help it to stand out on the shelf, it will also give younger customers an excuse to share it with their followers across social media.
One way of achieving this is to partner with your local artist. A local artist can help communicate your brand’s values, while simultaneously creating a distinguishable identity. Craft beer companies have relied on this approach to promote their brands for years. Beavertown, BrewDog, and Flying Dog Brewery are all known for their distinctive beer cans thanks to long-term partnerships with artists.
Generation Z is an increasingly influential demographic in the coffee industry and their demands for increasing sustainability, transparency, and quality are crucial to the future of the specialty coffee sector.
At MTPak Coffee, we offer a range of different sustainable packaging solutions that cater to the demands of Gen Z coffee consumers. From shaped pouches for RTD to recyclable takeaway cups, our coffee packaging is fully customisable to help maximise the coffee drinking experience.
For more information on MTPak Coffee’s sustainable packaging, contact our team here.
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