Understanding Gen Z dining trends to drive growth in retail

Gen Z consumers are entering peak college years, and while this demographic already has tremendous purchasing power, that will continue to grow as they gain independence and enter the workforce. As a result, meeting their needs has become essential for brands across categories. This generation is also extremely focused on education, with 84% of Gen Z consumers planning to go to college. As the first time many of them gain significant independence and make purchasing decisions without having to work through their parents, college becomes an effective window to understand what truly matters to Gen Z consumers and what they will prioritize as they enter adulthood.

While these students are busy learning about the 7 wonders of the world in their gen. ed. classes, we’ve studied their food trends to identify the 7 wonders of college dining.

Prevalence in On Campus Dining

Feed Me Now!

Insight

Evolving schedules, always on-snacking, and a culture used to immediate gratification means young people expect to get exactly what they want, when they want it! That means students expect good food quickly any time hunger hits (24/7).

Provocation

Fresh, high-quality, fast food 24/7 is a key need. Improving accessibility of food for anytime eating (without a lot of cooking) will be the expectation for this generation – How can we provide extreme convenience in the grocery store to allow retail to deliver and outcompete foodservice?

On Campus Examples

Universities are moving towards autonomous 24/7 markets and dining halls

Dining hall food delivery robots have surged on campuses

Grubhub has integrated with campus dining plans while DoorDash targets students

Premium vending delivers fresh food at all hours

Eco Eats

Insight

The environment is Gen Z’s number 1 concern, and they prioritize companies that authentically align with their values. From sourcing locally grown produce to embracing plant-based alternatives, they advocate for eco-friendly practices in food production, and are willing to pay a premium to do so.

Provocation

This generation’s commitment to environmental stewardship underscores the need for brands to align with these values. Embracing sustainability will help brands stay relevant!

On Campus Examples

Local sourcing is a key selling point for campus food service companies

Universities increasingly label environmental footprint of food

Students demand sustainable & reusable to-go dining containers

Default Diets

Insight

Gen Z consumers are much more likely to have dietary restrictions or to follow specific diets than the total population: 66% of Gen Z consumers follow a specific eating pattern or diet, vs 63% of millennials, 50% of Gen X and 41% of Boomers, and 10% of students on meal plans having food allergies vs 6% of the adult population. These consumers grew up with food technology addressing these needs (e.g. plant-based meat) and they’re increasingly expecting options that allow them to follow their diets without sacrificing quality.

Provocation

As dietary needs and restrictions become more and more common among Gen Z (Gluten free, plant based, allergens) there is an opportunity to delight consumers with higher quality options meeting these needs. Brands that have been able to address these needs are thriving (e.g. Siete, Made Good, Nature’s Bakery). How can companies deliver dietary needs without sacrifice in retail?

On Campus Examples

Smith College features an entirely gluten free dining hall

Foodservice companies increasingly make commit-ments around plant-based

Foodservice companies launch food stations entirely free of top 8 allergens

Craving Customization

Insight

Gen-Z has a desire for unique custom offers. Whether driven by dietary restrictions, a desire for greater variety, or a focus on individuality, consumers want and expect their food to be customized to their personal taste.

Provocation

Customization is becoming the norm – brands offering personalized products (Prose, Function of Beauty, Gainful Protein, etc.) are disrupting their respective categories. Where else can this be applied?

On Campus Examples

DIY stations are popular on campus

Colleges are increasingly using student feedback to influence dining plans

Students are looking for increased custom options in college dining

Global Grub

Insight

As the US becomes increasingly multicultural, Gen-Z is increasingly eager for ethnic flavors and cuisines. Multicultural students expect offerings that represent their cultures, and most students expect offerings that expand their palates.

Provocation

Authentically delivering flavors and products from other cultures is a massive opportunity, especially for cultures that are less well represented today. How can we bring international cuisine beyond the basics of Chinese, Indian and Mexican to life at retail?

On Campus Examples

Foodservice companies launch specific stations highlighting global cuisines

Boston College launched a program to bring international recipes across stations

Foodservice companies partner with chefs like Grace Ramirez to serve high quality international cuisine

Creating Community

Insight

In the post-covid world, students see food as a key element of building community. This is true both with their immediate on-campus community (they spend long hours socializing in dining halls), and with the broader local community (they prioritize eating at local restaurants).

Provocation

Gen Z consumers look to food to help them connect both with their social circles as well as with their local communities. How can companies better deliver a sense of community in retail through messaging or targeted innovation?

On Campus Examples

Aramark developed Local Restaurant Row which brings nearby eateries to campus

Oberlin let students eat at local restaurants using a meal swipe once a week

St. Olaf introduced a dining space with programming like trivia run by students

Cal Poly focused the design of their dining halls around creating student connections

Socially Savvy

Insight

Gen Z are digital natives who have grown up with unrestricted access to social media and rely on technology heavily in food. Influencers and celebrities have a big impact on their eating behavior, to the point where Gen Z often learns to cook through social media, and regularly try viral recipes.

Provocation

Social media and food are intertwined for Gen Z at an unprecedented level. Leveraging virality of recipes to resonate with Gen Z through LTOs and comms, and partnering with key influencers for product innovation are key opportunities, but how else might companies leverage the role of social media in Gen Z’s culinary development?

On Campus Examples

Colleges leverage ghost kitchens with Gen Z celebrities like Mr. Beast

QSR’s target Gen Z with influencer sponsored menu items (e.g., Renee Rapp x Sweetgreen)

Foodservice companies leverage food celebrities and equities to drive excitement

In summary, Gen Z college students want diverse multicultural and local foods to build community, both customized to their needs and available any time. Companies that can deliver on these needs in retail will be set up for success as this generation moves into the workforce and becomes a significant driving force in the economy.

As always, we want to hear from you! If you want any more information on any of our white papers, or have questions on how your brand can better address these needs, please reach out at info@seuratgroup.com.

Introduction

This year’s challenger brand paper highlights the role of cultural connectivity in building breakthrough brands. The U.S.
is becoming increasingly diverse (diversity index +11% over last decade, source), and we consequently see a rise in the importance of cultural sharing & connectivity. Brands able to harness cultural connectivity differentiate themselves and increase their mental availability. Creating cultural connectivity can come to life through democratizing traditional ingredients or recipes, headlining culturally relevant brand origin stories or missions, and engaging with consumers through broader messaging and specific social strategies. Excitingly, this connectivity is reciprocal in nature. As founders and brand builders look to share pieces of their backgrounds, consumers look to widen their world view, incorporate new experiences, and/or find a piece of home by engaging with and learning from brands with strong cultural heritages.

We’ve all seen the challenger brand landscape shift over the past several years: it’s become harder to break through and scale, capital is harder to come by, and exits / acquisition activity is less frequent. Those that have been able to break through often do so via the ability to authentically connect with consumers (and frequently, through cultural connectivity), hence our focus on the phenomenon in this year’s paper.

Cultural connectivity is a relevant driver of value creation across the consumer products landscape. Consumers are swarmed with an abundance of choice, searching for the best products that will permeate their everyday lives. Our paper highlights “breakthrough challenger brands” that have successfully mainstreamed on this thread of cultural connection – creating meaningful consumer share of mind and achieving over $100MM in sales. We also showcase our top emerging challenger brands that are poised for success via growing resonance, stemming from their ability to authentically leverage cultural ties and welcome consumers of all backgrounds.

Food & Beverage

Breakthrough Challengers

Emerging Challengers

Personal Care / Beauty

Breakthrough Challengers

Emerging Challengers

Conclusion

CPG brands leveraging cultural connectivity become part of everyday life, teaching consumers a bit about the world, or making them feel at home.

Our top emerging challenger brands authentically share their cultures as key to their mission and communications, all while encouraging mainstream trial and adoption through accessible entry and education, making their products tailored to their culture, but enjoyable to all. This strategy of cultural sharing creates genuine connections with consumers, allowing those of the same cultures to see more true representation at shelf, and allowing consumers of all backgrounds to learn about, and celebrate new cultures in their everyday lives.

As always, we want to hear from you! If you’d like more information on any of our challenger brand studies, or want to share a brand of your own, please reach out at info@seuratgroup.com.

A strong brand portfolio is the engine of value creation

The value of a consumer goods or services company is intrinsically linked to the value of its brand or portfolio. Brand equity is rooted in how meaningful, different, trusted, and salient the brand is perceived to be by consumers. Companies with a strong brand portfolio significantly and consistently outperform the market.

A recent McKinsey study confirms this phenomenon: the world’s 40 strongest brands returned 96% more to shareholders than investment in a global market index.

Powerful brands significantly outperform the market.

Total return to shareholders, Index

While it’s clear brand value drives economic value, building a valuable brand is easier said than done, and the market is cluttered with failed or under-performing brands. In our collective experience working with hundreds of brands, we’ve found the number one determinant of success is firmly placing the consumer at the center of all brand strategy decisions. To build a strong portfolio companies must follow a structured approach that details consumer demand drivers, the role of their brands in consumers’ lives and potential for change moving forward.

Demand Maps

A critical tool for manufacturers to position individual brands and their portfolio is a demand map that captures consumer insight on key drivers of choice.

How to use a Demand Map

It’s important to keep in mind that demand maps vary by category given consumer drivers are often very different.

Below are our Portfolio Management Principles to leverage your Demand Map effectively:

Prioritize brand lanes based on attractiveness (e.g. profit potential), brand right to win (e.g. brand’s ability to deliver on key needs), marketplace coverage (e.g. available consumption), and execution potential (e.g. brands ability to commercialize).

Evaluate the ability for brands within the portfolio to extend across the demand map. Considerations include:

• Covering more spaces drives penetration but risks lower salience / relevance (Brand A)
• Anchoring in one space drives loyalty & distinctiveness at the risk of reduced scale (Brand B)
• Creating clear demand lanes for each brand

Cover demand spaces where company brands can’t stretch and competitors lack a right to play / win through innovation, acquisition or licensing strategies

How Demand Maps come to life

A legacy brand in the portable protein space came to Seurat after a new player entered the category that was able to tap into an entirely new consumer segment (Gen Z and Millennial women).

Seurat created a demand map to understand the category and unlock pockets of growth for our client to regain share. Our research unearthed that consumer needs for protein are largely driven by a combination of occasion and need. The category exists along two key occasion-based dimensions: snack vs. meal part and solo vs. social consumption. We then pulled apart dimensions further to uncover four distinct drivers (flavor, health, convenience and value) that mapped across 8 unique demand spaces.
After identifying key demand spaces within the category, brands can strategically position to capture new spaces.

Our work quickly revealed a sizable, underserved demand space: mom-approved snacks. By maintaining adherence to a handful of core portfolio management principles, our client was able to regain share by utilizing the demand map’s forward-looking insight to optimize their portfolio.

What Next

Are you looking to optimize your portfolio strategy?

Are you looking to solidify positioning for key brands? Could your organization benefit from demand map insights? We welcome conversation at info@seuratgroup.com