Generation Z, aka ‘Gen Z’, has had a profound impact on how coffee and tea are created and consumed, particularly in the café environment, where they are both seeking and creating innovative experiences. For this demographic, café menus are seen as a platform for inspiration where they can customise their beverage to respond to their need state. Born between 1997 and 2012, the effect of this cohort on the beverage industry will continue to expand as their spending power becomes increasingly more influential. The next two decades will be a defining period in the industry as this generation enters and grows within the workforce.

These digital natives are not only sharing the beverages they consume but also engaging on social platforms to both discover and be inspired by new products. As a direct result, their influence has expanded beyond their own demographic, leading both older and younger consumers to explore beverages curated by Gen Z. Their prolific online engagement is erasing global boundaries, exposing them to flavours and beverage experiences far beyond their region.

Beverage Explorers

Functionality and flavour, although still critical, are not the sole driving forces for Gen Z. These consumers are looking for a full sensory experience, finding ways to add flavour, texture, and colour to their favourite tea or coffee base. These consumers are continually finding new ways to reinvent their favourite beverages using these products as a medium to express their preferences and personality. “While other generations seek out consistency and reliability in their food and beverage purchases, Gen Z has a distinct eagerness for novelty and flavour exploration,” said Nik Allen, global insight manager, consumer foodservice, Euromonitor International.

“While previous generations approached coffee primarily as a functional caffeine habit or a morning ritual centered on hot drip or a standard espresso drink, Gen Z has a more experiential relationship with their coffee,” said Gabriel Manresa, CEO, Cimbali Group USA. These individuals grew up with specialty coffee surrounding them and concerns about sustainability were at a high point. “They hold every touchpoint, including taste, presentation, speed, and customization, to a high standard,” said Manresa.

Coffee and tea have become a full sensory exploration, with consumers actively seeking colour, flavour, and texture in their products. “The flavour and format trend cycle is rapid, leading many in this generation to seek out ‘the new new’ in tea and coffee,” said Allen. This is a generation that is not afraid to be playful with beverages and to create products they can enjoy on a variety of levels.

“They want to have different flavours, different sensory experiences, and then they’ll also want to snap a picture of it and post it on their favourite social media platform,” said Nils Schaede, director of marketing, Kultee Kaviar. “It needs to deliver a lot more than ice and a Diet Coke.” Integrating products like boba into beverages, shared Schaede, is one strategy that will add flavour, mouthfeel, and something new to the beverage experience.

Iced, Iced Baby…

Whether it is matcha, coffee, herbals, cocoa, or juice infused, the one element that remains consistent for Gen Z is that they prefer to drink their beverages chilled.

There has been a notable increase in cold options across the UK, with the younger demographic driving this demand, shared Richard Milner, category insight manager, Lincoln & York, a UK-based private-label coffee roaster, adding that 93 percent of 25 to 34 year olds are drinking cold coffee, with 72 percent of those individuals consuming it weekly.

Cold brewed tea and coffee provide the perfect platform for layering and brilliant hues. It is also the ideal medium for adding textures, including dried fruit, sprinkles, edible glitter, and boba. From the vibrant greens of matcha to the lilac hues of ube and lavender, colour has been increasingly prominent in beverages for the Gen Z demographic.

“With a cold coffee, you have many more routes to express that indulgence or treat element,” said Milner. “All of a sudden, colour becomes visible.” To support operators in responding to this increased demand, Lincoln & York has released three formats of cold coffee, RTD drinks, 3L format of a bag and box concentrate with a dispense tap, and a bottled coffee concentrate enabling consumers to create their favourite beverages from home.

This beverage format urges operators to be more playful and experimental with their offerings, creating beverages that respond to a variety of need states. Although boba is often seen in tea and refresher formats, Schaede explained that boba can be used to introduce a variety of flavours into the drink experience. Cold brew and iced coffee provide another opportunity to integrate boba into the beverage. He said that operators can tap into the indulgent experience by offering more indulgent boba flavours, including chocolate or caramel, to create a unique sensory experience in consumers’ favourite caffeinated beverage.

Building Connections

The first truly digital natives, smartphones are an instrumental part of Gen Z’s lifestyle.

For this demographic, using smartphones is an enjoyable thing, said Milner, a place where they can be their own creators and share it with others.

Developmentally, Gen Z hit several major milestones during the pandemic, and phones became their primary tool for engagement. “It is a fundamental part of their lives; it is almost a part of who they are in social circles. So, suddenly, iced coffees, the layering, colouring, foams, the endless variety, and the endless scope of innovation, they have a vehicle to share this,” said Milner.

The phone is an extension of their experiences, a place where they can share the story behind the beverage, including its appearance, flavours, and where it is curated. This is where they have learned how to connect, and they continue to use these systems to form these connections. “The cell phone is always in their hand, so you always have a reviewer,” said Schaede. “Every time someone purchases a beverage from the store. And your menu needs to reflect that and needs to hold up to that expectation.”

The heart of Gen Z is authenticity, wellbeing, and inclusivity. They are cheerleaders and supporters and are looking for companies whose values align with their own. “It’s the individualism that they’re looking for,” said Milner. “They want to be individuals, whether it’s their coffee, where they buy their coffee, how they buy their coffee, or what to tell their friends.”

Although, it may look like these consumers are continually looking for the newest trends, what they are truly seeking is a space and brands that embraces their individuality and provide opportunities for them to express themselves. “Psychological well-being is more important than perhaps it was in previous generations,” said Milner.

Being able to customise and innovate with their own beverages provides those moments of fun and joy. For operators, it is an opportunity to tap into wellbeing, not just through the beverage’s ingredients, but also through its appearance, texture, and customisation options.

“What’s notable from an industry perspective is that this isn’t just niche behaviour, it’s mainstream expectation,” said Manresa. “Extreme customisation, cold and iced formats, and visual appeal for social sharing have moved from trend to baseline demand.” Manresa cautions that operators who treat these as optional upgrades will be behind in keeping up with this generation’s expectations of their coffee.

This demographic sees through blindly posted content and continues to have a distaste for direct marketing. They are looking for companies that understand their needs and actively find ways to connect with them. “I think Generation Z is more loyal to a company that is socially conscious or has a purpose that resonates with them,” said Zakiyya Rosebelle, author of Daily Habits of Tea and Joy and founder of Happy Rosy Day tea. These consumers are looking for brands that align with their values and respond to their needs.

“They’re looking for teas that will help them slow down, relax or achieve a specific goal, for example the chamomile tea is one customers enjoy having in the evening when they’re relaxing, while the Rosy Beauty tea is something that they enjoy incorporating in their morning beauty routines or their beauty rituals at the end of the day or the end of the week,” said Rosebelle. “They’re looking for something that helps them create an experience in their daily life.” When creating the product line, Rosebelle used the packaging to communicate the experience that the product would deliver. Happy Rosy Beauty Day offers products like Lemon Lavender Gratitude Tea, Self-Care Sunshine Tea, and Tea Party Tea, which respond to Gen Z’s desire for experiential beverages.

Although global boundaries are becoming blurred, the regions with the largest cohorts of this demographic tend to have the most influence on behaviours and trends. “India, China, and the US are expected to be the three most populous Gen Z countries by 2034 and will continue to critically shape these growing tea and coffee trends,” said Allen.

Innovations are becoming a lot more global, said Schaede, placing pressures on operators to be continually aware of the next trend and find ways to quickly integrate it into their operations.

Gen Z are experimenters, innovators, and creators. These individuals are often both the innovator and the consumer, bringing in ideas and trends into their favourite spaces and hoping that the operators can deliver them. They are looking to build relationships with their cafés, actively seeking spaces that embrace their creativity and find ways to build on it. This demographic’s curiosity and appreciation for novelty presents an opportunity for cafés and retailers to explore new products and deliver innovative experiences. They are reinventing the way that beverages are created, consumed, and shared, and inviting others to join them in seeing that beverages are not just about function, but can bring joy, connections, and build community.

Anne-Marie Hardie is a freelance writer, professor and speaker based in Barrie, Ontario. She may be reached at: [email protected].