- Gen Z’s $360 billion spending power has brands investing in youth-driven marketing
- Dutch Bros Coffee just appointed a Gen Z and Alpha specialist to its Board of Directors
- Coffee chains are borrowing from beauty’s playbook – TikTok trends, influencers, and viral hype
FOR years, marketing to younger consumers was the domain of upstart brands – those willing to take risks with TikTok trends, influencer-led campaigns, and meme-driven advertising.
Established companies, by contrast, relied on broad, conventional messaging designed to appeal to multiple generations at once. That strategy is quickly falling out of fashion.
Now, some of the world’s biggest brands are restructuring their marketing teams, budgets, and leadership to focus on Gen Z and Gen Alpha. The coffee industry is taking inspiration from the beauty sector, which has mastered youth marketing through digital-first strategies and social engagement.
The appointment of Kory Marchisotto, Chief Marketing Officer of e.l.f. Beauty, to the board of Dutch Bros Coffee, is the latest example of this shift. Dutch Bros, one of the fastest-growing drive-thru coffee chains in the U.S., has traditionally targeted younger consumers, but bringing in a beauty executive signals a more aggressive pivot towards Gen Z marketing.
“Specialty coffee has been too barista-centric, while Gen Z is pushing for a more accessible, indulgent, and expressive coffee culture,” says André Eiermann, global coffee innovator and marketing strategist. We see this shift in their habits: they start drinking coffee as teenagers, treat it as a lifestyle accessory, and expect it to reflect their individuality.”
“This generation has also broken the traditional marketing funnel, replacing it with an ongoing loop of inspiration, exploration, community, and loyalty.”
The stakes are high. Gen Z (born between 1997 and 2012) now has a global spending power of over $360 billion, according to Bloomberg. Meanwhile, Gen Alpha (born after 2013) is already shaping household purchasing decisions through their influence on parents.
Brands that fail to speak their language risk losing decades of customer loyalty.
“User-generated content (UGC), influencer collaborations, and interactive digital storytelling drive engagement,” says André.
“But coffee is not cosmetics – hospitality matters. The challenge is integrating a digital-first playbook while preserving coffee’s meaningful human connection. Keep in mind, Gen Z is the loneliest generation, according to the Cigna US Loneliness Index.”
Borrowing from beauty: The playbook for capturing Gen Z
The beauty industry has set the standard for engaging younger consumers, turning brands like e.l.f. Beauty, Glossier, and Rare Beauty into cultural superstars.
The secret? A digital-first, influencer-led, and highly interactive marketing strategy. Unlike traditional advertising, where brands broadcast messages to consumers, beauty brands have embraced participatory marketing, where Gen Z and Gen Alpha play an active role in shaping trends.
This model has proven highly effective. e.l.f. Beauty, for instance, saw a 49% surge in net sales in 2023, thanks in part to its hyper-successful TikTok campaigns and influencer partnerships. The company’s viral “Eyes. Lips. Face.” campaign generated over 10 billion views on TikTok, and nearly 7 million user-generated videos, far surpassing traditional advertising performance metrics.
#EyesLipsFace became the most viral campaign in TikTok US history. Celebrities like Ellen, Lizzo, and Reese Witherspoon joined in unsolicited. The original song hit #4 on Spotify’s global chart, and earned media passed 1.5 billion impressions.
“e.l.f. has redefined beauty marketing with inclusivity and extreme customer centricity – values that transcend industries,” says André.
“Coffee brands need to adopt this mindset by making Gen Z active collaborators rather than passive consumers. They want fun, customisation, community, and social media-worthy experiences.”
Dutch Bros’ decision to bring a beauty industry veteran onto its board suggests that coffee brands want to replicate this success. The rise of influencer-driven beverage marketing is already underway.
Starbucks, for instance, has doubled down on TikTok promotions, creating drink recipes designed to go viral. Dunkin’s collaboration with TikTok star Charli D’Amelio led to a 57% increase in app downloads, proving that Gen Z endorsements drive measurable business impact.
Even beauty brands are venturing into coffee. In 2023, actress Millie Bobby Brown expanded her Florence by Mills beauty line into coffee, partnering with Collab Coffee to tap into her existing fanbase. The move reflects a growing trend where brands blur the lines between industries to create lifestyle-driven marketing strategies.
Influencer-backed beverages, limited-edition collaborations, and meme-worthy marketing campaigns seem to be a winning recipe to capture the Gen Z and Alpha audiences.
But this aggressive targeting of younger consumers raises a crucial question: Does generational marketing risk alienating older, more traditional customers?
The risk of alienation: Who gets left behind?
Unlike beauty, where products are often tailored to specific demographics, coffee has long been a universal product, catering to consumers across all age groups.
While younger consumers may enjoy the gamified, influencer-driven marketing strategies now dominating the industry, older customers – who still make up a significant portion of the coffee market – may feel left behind. The coffee industry’s rapid shift toward youth-oriented digital engagement comes with potential downsides.
A 2024 study by GWI found that 37% of US Gen Zs use loyalty or reward programmes. That’s a smaller proportion compared to other generations like millennials (46%) and baby boomers (58%) – but a growing trend is emerging here. The number of US Gen Z who say they’re members of a loyalty programme has jumped 15% year-on-year – except that as digital natives, they want app-based reward systems.
Starbucks, for example, recently revamped its loyalty programme to include more app-based incentives, causing frustration among older customers who preferred the original structure. Similarly, as brands lean into meme-driven advertising and TikTok challenges, they risk creating an environment that alienates longtime patrons who value consistency over novelty.
Other factors like use of AI for live chat customer support – embraced by Gen Z but overall feared by millennials and boomers, banking on “young” cultural references, and leaning into politics may work well with Gen Z, but lose older customers.
Beyond generational concerns, hyper-focusing on Gen Z also assumes a level of homogeneity that doesn’t exist.
Not every young consumer wants a highly stylised, social-first experience, just as not every older consumer rejects digital marketing. A miscalculation in strategy could mean alienating one audience without fully capturing another.
The financial implications are significant. If coffee brands over-invest in Gen Z marketing at the expense of other customer segments, they could erode brand equity among loyal, higher-spending demographics.
“Influencer-driven and digital-first marketing can risk alienating older or traditional customers, but the solution isn’t to slow down – it’s to create layered marketing strategies,” says André. “Gen Z and Gen Alpha respond to fast-moving, influencer-driven content, while older consumers value personal service and brand heritage. The key is to bridge generations through shared experiences.”
The challenge for brands is not whether to engage Gen Z, but how to do so without alienating other demographics. The most successful companies will be those that integrate generational marketing into broader brand strategies, rather than making an abrupt shift that risks disenfranchising older customers.
How to get it right
Coffee brands, for instance, could take a dual-track approach – offering youth-focused promotions while maintaining traditional customer engagement. Dutch Bros’ appointment of Marchisotto signals an embrace of Gen Z tactics, but its long-term success will depend on its ability to balance digital innovation with broad customer appeal.
“Specialty coffee can learn from brands like Hermès, which transitioned its Birkin bag to a younger audience while maintaining their prestigious positioning,” says André. “Traditional Third Wave marketing appeals to older consumers, while new formats and digital engagement attract the next generation.”
“Most importantly, hospitality remains irreplaceable. Technology should enhance, not replace, human connection. A coffee shop isn’t an e-commerce store – it’s a space where brand experience is built through people.”
Other industries are already demonstrating how to navigate generational shifts without losing their core identity. Fast-food chains like McDonald’s and Taco Bell have successfully integrated digital marketing and influencer partnerships while still catering to older consumers through traditional advertising and menu stability.
“Gen Z wants shareable, immersive coffee experiences, while older consumers value craftsmanship and education,” says André. “The challenge is delivering both.”
“Gen Z thrives on co-creation, user-generated content, and engaging storytelling. Older consumers prefer education, expertise, and trust. Personalisation bridges the gap – whether through AI-driven recommendations or flexible menu options. The goal is not to choose one generation over another but to build a brand that evolves with its audience.
Specialty coffee still leans too much into Millennial-driven third-wave ideals, prioritising education over engagement. But Gen Z isn’t looking for a lecture – they want an experience. Espresso, for them, is not a ritual; it’s an ingredient in fun, indulgent drinks. The future of coffee branding is about making people fall in love with coffee in their own way.”
In the race to capture younger consumers, the brands that succeed won’t be the ones that pivot exclusively to generational marketing – they will be the ones that adapt their strategies without forgetting the customers who made them successful in the first place.
Coffee Intelligence
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