Generation Z consumers, born in the late 1990s and early 2000s, are shaping the future of the coffee-to-go market, according to Kate Alexander, Nestlé’s channel lead for the leisure, convenience & QSR sector.
"What do we mean by Gen Z? In Nestlé we class them as ambitious young trendies,” she told the recent IGD Live event in London.
“These guys are really driven. They are career orientated. They are always on the go. They lead really busy lifestyles. That means that most of the time they are out of home and coffee is an integral part of their lives.”
Coffee: a necessity not an indulgence
And with the saturation of coffee options on UK high streets, coffee for young Gen Zers is not the indulgence it may have been for older consumers.
“In contrast to older generations, they are drinking coffee out of home all the time. It’s the thing that keeps them moving. They plan it into their daily schedule. It’s not a treat anymore; it’s an absolute necessity. And you can get a decent cup of coffee pretty much wherever you go. What's interesting is that whether it be an independent coffee shop or a non-coffee specialist like McDonald's, being able to get a flat white is the new norm."
But despite a saturated market, there’s room for improvement in the coffee-to-go sector, she said – particularly in the machine sector.
Young coffee drinkers expect good credentials in terms of taste, explained Alexander. They demand high quality ingredients that have a provenance and also a sustainability message. And because of that they are shopping on the quality and not the price.
“When it comes to their decision tree, first of all its quality, then its convenience, then its price. What we see with Gen Z is that they’ve got quite a disposable income. So therefore coffee-to-go plays a really pivotal role in their life. They want to be able to get things on the go, hassle free, and the biggest challenge we have is that coffee-to-go is not living up to their expectations.”
At present, the coffee-to-go machine market only offers basic options for the coffee lover, lamented Alexander. “The machines aren't that impactful, the coffee isn’t great, and you haven't got a barrister saying good morning to you. So there’s a real opportunity to provide quality coffee on the go as well.”
Coffee machines are old hat
These machines must appear desperately behind the times to Generation Zers who have grown up with digital technology and personalised experiences and interactions.
"These people are digital natives, they know that they can order a cab or a pizza at the press of a button. But at the moment the machine tech is a real downfall. They are old fashioned, restrictive, they have limited user experience, and that again represents a real opportunity.”
Nestlé has been using these truths to inspire its out-of-home coffee machine channels, through which the company hopes to offer Gen Zers an enhanced, premium, personalised and frictionless experience that saves them much cherished ‘micro moments’.
Taking inspiration from Uber, Deliveroo, Netflix and Amazon
“Given that Gen Z have these busy, time pressured lives, saving those micro moments is a massive win for them. Basic convenience factors like easy access, reasonable speed, aren't enough anymore,” explained Alexander.
“Some of the places we're finding inspiration for this are Uber, Deliveroo, Netflix, Amazon are really leading the way on this. They remember preferences, they have one click payment, you can omni-channel app integration subscription models, and it really does cue that personalisation.”
The Nescafe Azera branded out-of-home coffee machines resonates best with what ambitious young trendies are looking for in a brand, she said.
“It’s much more than a coffee machine in a box. Also there's more personalisation included so you can change the strength of the coffee, you can change the sweetness, you can add syrups, so you can have much more personalised cup of coffee. And you're waiting for your coffee to be served, the visual display tells you a story about the sustainability of the coffee as well. That’s very impactful for this consumer group.”