Gen Z will have ‘seismic’ impact on the food industry, prioritizing convenience and functionality, says The NPD Group
Gen Z has never known a world without the internet and is the generation most likely to embrace mobile food apps to place food orders than older generations, said The NPD Group, which has just put together a report on mobile food ordering apps.
Outside of prioritizing having instant access to their favorite foods through a mobile, Gen Z has grown up prioritizing the flavor and function of food rather than the brand, challenging food marketers to find different ways to reach this digitally connected generation, according to The NPD Group.
Gen Z has also grown up with more education around the benefits of fresh vs. processed foods, claimed The NPD Group.
“A large percentage of this generational group has been raised to put a greater emphasis on the quality of food, whether it’s clean, fresh, or nutritionally beneficial. Their attitudes and behaviors about the foods they consume are now being reflected across grocery shelves and cases.”
When selecting a snack, Gen Z looks for functionality through portability, added nutrients and health benefits.
“Regardless of the brand, for Generation Z, if they can’t take a snack with them, it’s not really a snack. Portability is the benefit they value the most when choosing a snack,” said The NPD Group.
“They expect functionality as well with added nutrients and health benefits that will replenish their bodies throughout the day.”
The oldest sun-segment of Gen Z, who will be reaching their mid- to- late- twenties in the next five years, is forecasted to drive a 5% growth of the holistic and healthy snack category by 2023. Within the healthy snack category, fresh fruit (+55%), refrigerated yogurt (+14%), and nuts and seeds (+8%) will be the fastest growing sub-categories, predicts NPD Group.
Gen Z consumers are leading the charge the charge in restaurant digital orders, which has grown at an average rate of 23% since 2013 and is expected to triple in volume by 2020, according to The NPD Group.
Similar to millennials, Gen Z consumers have become frequent and loyal visitors to fast casual and quick service restaurants, making 14.6 billion restaurant visits in 2018, representing 10% of total foodservice traffic.
Only a portion of Gen Zs are old enough to order their own delivery, yet foodservice delivery orders among Gen Z totaled 552 million – one million shy of the older millennials.
They are also heavy users of restaurant tablets and order kiosks, noted The NPD Group.
Importance of a mobile strategy
Restaurants and other foodservice outlets should focus on optimizing their mobile ordering platforms, according to The NPD Group. Digital orders through a restaurant’s app or website now account for 70% all digital orders and the remaining 30% of digital orders are completed through third party apps such GrubHub, Seamless, and UberEats.
“Digital orders will remain an outsized source of growth for the restaurant industry over the next few years, and operators who desire to grow need to embrace a digital strategy,” said David Portalatin, The NPD Group food industry advisor and author of Eating Patterns in America.
“There are clear leaders in the digital ordering space, brands, and third-party providers who have achieved critical mass the fastest. To make the best decisions about digital strategies and potential partnerships, operators need to understand the key features that differentiate these companies from one another.”
“Gen Zs can FaceTime their friends, text their moms, and order a pizza all at the same time,” said David Portalatin, food industry advisor at The NPD Group.
“Although we’re just getting a peek at what Gen Zs will bring to our culture, economy, and society, this generation will be a seismic force as they emerge into adulthood under more prosperous economic circumstances, yet with their own differentiating set of values.”