Gen Z will be the largest and wealthiest generation, with global spending expected to rise from $9.8 trillion to $12.6 trillion by 2030, according to a report from World Data Lab. Gen Z already spends significantly more than previous generations. This economic power allows them to shape market trends, particularly by demanding more from the products they purchase, including an emphasis on functional benefits that cater to their health and wellness aspirations and brands must adapt to succeed in the future.
One of the traits of this generation is their focus on wellness, particularly in areas related to overall health, mindfulness, and even their appearance, according to the Future of Wellness report. Their early exposure to health information, the impact of the pandemic and a desire for social connections through fitness have contributed to this trend. Companies are responding to Gen Z’s evolving needs by offering wellness-focused products that emphasize functional benefits and position those benefits to set themselves apart. They address key consumer questions like, “How does this product specifically benefit me?” and “What sets it apart from others in the same category?”
And it’s true that Gen Z consumers are increasingly seeking functional benefits in the food products they purchase—prioritizing products that offer more than just taste. They are often looking for items that support physical and mental well-being with added nutrients, probiotics or energy-boosting ingredients. According to Food Industry Executive, Gen Zers are increasingly embracing functional foods to support their health goals—consuming foods for energy, for mental well-being and for better sleep. Foods with these benefits fit well with their lifestyles by fulfilling their quest for “food going beyond food” with specific health functionalities.
This extends to new products in the sweets space, products that may have previously been regarded as “junk food.” Confectionary News shares more about a new market for protein-infused sweets, fiber-enriched bars, gut health-supporting treats with probiotics and prebiotics, and jellies or gummies incorporating vitamins, minerals, and CBD. These innovations align with Gen Z demands for healthier indulgence, with manufacturers emphasizing both taste and wellness in their products. These trends reflect a growing shift toward functional ingredients in the confectionery industry.
A major category being affected by Gen Z’s drive for functional benefits is the beverage industry. We talk about this in “Gen Z’s Impact on Beverage Trends”—how Gen Z is prioritizing health by choosing nonalcoholic drinks to avoid negative effects and long-term health risks, while favoring beverages with functional benefits that align with their health and wellness goals. They seek drinks with benefits like hydration, cognitive support and gut health, favoring products with natural, functional ingredients, according to nutritional company ADM’s 2024 Beverage Innovation Report. This generation also leans toward alcohol-free or low-alcohol options as they adopt sober or health-conscious lifestyles, pushing brands to innovate in both non-alcoholic and alcoholic categories by offering healthier, “better-for-me” alternatives. Beyond functionality, these beverages often tap into emotional connections, offering solutions for stress relief, relaxation, and socializing in ways that resonate with Gen Z’s values around mental health.
And the search for functional benefits and ingredients doesn’t end with food and beverage for Gen Z. Functional ingredients are often seen as carriers that enhance the delivery of active or performance ingredients in personal care products. One example is probiotics and prebiotics, in fact whole biomes, being added to beauty products. These claims are appealing to Gen Z consumers. Popular functional ingredients in make-up that they look for include exfoliants like AHA and salicylic acid, acne treatments like niacinamide, vitamin C serums for a variety of skin concerns, and natural calming agents like aloe vera and calendula. Many of these functional personal care products also incorporate clean, sustainable ingredients, a non-negotiable for Gen Z consumers who are as passionate about the planet as they are about their health.
From food to beverages to personal care, the desire for functionality spans across industries, further showing Gen Z’s commitment to holistic health and wellness.
While functional benefits are key to reaching Gen Z and their priorities, they also expect transparency and authenticity around claims. Products can’t just tout function for function’s sake, they need to be honest about the benefits to the consumer. Gen Z prefers brands that clearly communicate the functional value of their products and align with their values around sustainability and being socially conscious, in general. They rely on peer reviews, social media influencers, and brand transparency to validate their purchases, placing higher trust in brands that demonstrate authenticity and commitment to their values. Understanding these motivations is essential for brands to future-proof their strategies.
As Gen Z continues to reshape industries with their focus on functional benefits, it is important to understand what direction to take your products. Using various market research approaches, brands can meet consumers where they’re at—and meet brands where they’re at in your product development and launch process!
In the early stages of developing functional benefit products for Gen Z, Foundational Research is essential for gaining insights into consumer attitudes and behaviors. Once this understanding is established, the focus shifts to identifying key drivers and barriers within the category and exploring potential opportunities—often referred to as “white space“—in the market where a brand or product can stand out and succeed.
The next step in developing a path forward for functional products for Gen Z focuses on refining ideas through concept screening and strategic claims positioning. AMC’s MessageFilter™ tool, for example, helps identify which claims resonate most with Gen Z, ensuring that the functional benefits your product offers are both clear and compelling.Additionally, the importance of running a choice modeling study before launch could be a whole blog unto itself. Conducting choice modeling is crucial for fine-tuning elements like price and positioning before the product hits the shelf.
Finally, when a new functional benefit product comes to market for Gen Z, early feedback from purchasers immediately after launch can be gathered with AMC’s Purchaser Follow-Up™ (PFU™) research. Understanding initial purchaser reactions paired with First-Moment Mobile™ geofencing technique and/or mobile shop-alongs will provide the holistic story of the on-shelf and in-home experience for Gen Zers.
There are so many ways to do the right research to reach Gen Z. Brands looking to stay ahead in an ever-changing market must act now. Contact AMC Global to ensure your products not only meet Gen Z’s functional expectations but also thrive in a competitive landscape. Reach out to learn more!
