- The beverage industry’s growing obsession with Gen Z may overstate how accurately youth trends predict future consumption.
- By 2030, Gen Z and Millennials are expected to account for roughly US$12 trillion in global spending growth, helping explain why brands are so focused on younger consumers.
- Businesses risk overlooking deeper demographic and cultural shifts if they become too focused on whatever Gen Z is drinking today.
Every few months, the beverage industry seems to discover a new reason to obsess over Gen Z. One week it is matcha – the next, bubble tea, functional beverages, or a limited-edition drink that has gone viral on social media.
Brands increasingly treat the preferences of younger consumers as a window into the future of beverage consumption, often reshaping menus and marketing strategies in response. However, the industry’s growing fixation on Gen Z also raises an important question: are highly visible trends being mistaken for reliable forecasts of future demand?
While some youth-led behaviours genuinely reshape markets, broader forces may ultimately prove more important than whatever happens to be trending online.
The industry has become obsessed with Gen Z
Beverage industries have long looked to younger consumers as an indicator of future demand and changing consumption habits.
Advertising campaigns by Coca-Cola in the 1970s sought to capture younger audiences by aligning its brand with the optimism and countercultural values of the youth movement. Today, brands have far more powerful tools at their disposal, using social media to engage directly with younger consumers and monitor emerging trends in real time.
Social media has fundamentally changed how those behaviours are observed. Trends that once emerged gradually now become global phenomena almost overnight, creating the impression that every new drink preference represents a significant market shift.
This visibility has fundamentally changed how businesses interpret consumer behaviour. Trends that once emerged slowly and within specific markets can now spread globally within days, creating the impression that every new drink preference represents a meaningful shift in future demand.
The industry’s focus on Gen Z is also driven by economics. By 2030, Gen Z and Millennials are expected to account for roughly US$12 trillion in global spending growth, making younger consumers increasingly difficult for brands to ignore.
Pierre de Chanterac, 2023 World Ibrik Champion and owner of Tactile Café in Paris, believes businesses are increasingly responding to and establishing themselves on a new model of hospitality.
“What often gets overlooked isn’t only what Gen Z is drinking, but who’s opening these new cafés,” he says.
“Specialty coffee was once built by people obsessed with coffee. Today, many entrepreneurs are building brands around atmosphere, aesthetics, and identity, with coffee simply acting as the medium.”
According to Pierre, the success of alternative beverages and social-media-first concepts has changed the economics of the industry. You no longer need deep coffee expertise – or even the traditional third-place model – to build a successful coffee shop.
“For many consumers, the sense of belonging happens online, through the brand’s identity and imagery, while the drink is consumed on the go with little interaction in the physical space, he says.”
“Businesses are not just following changing tastes; they’re responding to a new way of building hospitality brands, where creating an aspirational lifestyle can be just as valuable as serving exceptional coffee.”
In many ways, businesses are not simply chasing changing tastes. They are trying to understand a new type of consumer and a new way of building beverage brands.
What young people drink doesn’t always predict the future
The logic of a Gen Z ‘obsession’ is understandable. Younger consumers represent significant future spending power, and few businesses want to be caught on the wrong side of changing tastes.
However, the problem with the industry’s obsession with Gen Z is that highly visible behaviours are not always reliable indicators of long-term demand.
Previous generations also had their defining drinks – frappuccinos, flavoured vodkas, energy drinks, and craft beer all enjoyed periods of explosive popularity among younger consumers. Many remain important categories today, but people’s relationships with them changed over time.
What consumers drink in their youth often bears little resemblance to what they drink as adults. As such, Pierre believes younger consumers are not necessarily a perfect predictor of future demand.
“The industry has always been looking to gain market share, and younger generations probably represent its biggest opportunity,” he says. “Obviously, Gen Z drinks very little coffee, and less and less alcohol.”
This creates somewhat of a paradox, in which businesses are increasingly fixated on a generation that, in many markets, consumes relatively little of the products they are trying to sell.
That does not mean Gen Z should be ignored. Some youth-driven behaviours may ultimately become lasting market shifts. But the industry’s desire to find simple answers to future demand can lead to an overemphasis on whatever happens to be popular at a particular moment.
Matcha offers a good example. Based on current demand, the global matcha market is forecast to grow at a compound annual growth rate of 10.4% through 2030. However, many see this popularity as unsustainable, with soaring prices, low yields and increased demand leading to a potential downward turn in matcha consumption.
This has largely been fuelled by Gen Z-driven social media trends on platforms such as TikTok. And while typical social media food fads often peak and fade within a few weeks, Gen Z’s obsession with matcha has evolved into a broader lifestyle trend.
“In my opinion, matcha’s success has little to do with its pure taste,” Pierre says. “It’s much more about its ability to become whatever people want it to be.”
“You can create something sweet and indulgent while still projecting a healthy, trendy image because it’s green and carries all the associations of wellness.”
In other words, matcha’s success may have less to do with Gen Z specifically and more to do with broader themes of wellness, personalisation, and indulgence. These are cultural shifts that extend far beyond a single generation.
The bigger forces may be elsewhere
If businesses become too focused on what Gen Z is drinking, they risk overlooking the structural changes that may ultimately have a greater influence on beverage consumption.
Migration, urbanisation, ageing populations, and changing lifestyles all shape how, where, and why people consume drinks.
“As people move, travel, and live in increasingly dense cities, cafés become important places to meet, work, and connect,” Pierre says. “Specialty coffee has evolved into a global culture.”
He notes that these changes are often slower and less visible than social media trends, but they may prove far more consequential over the long term.
“Demographic and cultural shifts shape why people go to cafés in the first place, how often they visit, and the role these spaces play in everyday life.”
Gen Z will undoubtedly continue to remain significant, and some of today’s trends will undoubtedly become lasting parts of the beverage landscape.
However, highly visible behaviours should not be mistaken for reliable forecasts, and the future of coffee will not be defined by what the most popular hashtag of today might be.
If the coffee industry becomes too obsessed with chasing whatever Gen Z happens to be drinking this month, it risks overlooking deeper demographic, cultural, and economic shifts. These shifts may ultimately shape the future of beverage consumption far more than any trend on TikTok ever could.
