Key facts
- Gen Z and millennials are increasingly influencing product development, M&A, and labeling strategies in the FMCG sector.
- Companies are acquiring youth-focused brands and aligning portfolios to cater to younger demographics.
- Health consciousness, digital savviness, and sustainability are key purchasing drivers for Gen Z.
- Gen Z accounts for approximately 35% of consumption spending in India.
- Young consumers are actively scrutinizing product labels and ingredients before purchasing.
Gen Z consumers are increasingly dictating product development, M&A strategies, and labeling decisions within the Fast-Moving Consumer Goods (FMCG) sector, according to industry executives. This demographic's influence, once confined to categories like fashion and lifestyle, is now extending to everyday grocery essentials.
Companies are actively realigning their portfolios to capture this demographic. Marico India, for instance, acquired three direct-to-consumer, youth-focused brands for approximately ₹800 crore earlier this year. Saugata Gupta, Marico India's managing director, stated that aligning with Gen Z and millennials is crucial for doubling revenue and future-proofing the organization.
A report by Ipsos and the Plant Based Foods Industry Association highlights that health consciousness, digital savviness, and sustainability are the primary drivers shaping Gen Z consumers' choices. This generation, comprising individuals in their mid-teens to late twenties, accounts for a significant 35% of India's consumption spending.
Nestle India managing director Manish Tiwary observed that young shoppers meticulously examine product labels and ingredients, no longer accepting claims at face value. This trend is also reflected in marketing efforts, with Nestle's parent company appointing Dua Lipa as a brand ambassador for Nespresso to appeal to a new generation.
Orkla India's managing director Sanjay Sharma noted that India is on the brink of a generational consumption shift, with Gen Z and millennials driving a dominant share of spending and being less conservative than previous generations. Even product shortages, such as the scarcity of Diet Coke cans in April and May, were partly attributed to the demand from young consumers.