KANSAS CITY — While most of Generation Alpha, the demographic cohort defined as those born between 2010 and the present, are too young to directly impact food and beverage purchasing patterns, many in the generation do influence where their parents eat and the brands they buy. As this group matures, their expectations around customization and personalization may have a profound influence on food and beverage marketing and product development.
The market researcher Datassential late last year identified the rise of Gen Alpha as one of its 2023 macro-trends, noting the oldest members of the group are reaching their teenage years and are at the development stage where they are making purchasing decisions for themselves and developing their own preferences.
The consultancy McCrindle Research Pty Ltd., Sydney, is credited with identifying Gen Alpha and described the demographic as one of the first to be immersed in digital technologies.
“Generation Alpha began being born in 2010, the year the iPad was launched, Instagram was created and app was the word of the year — and so from their earliest years, they have been ‘screenagers,’” McCrindle said.
Gen Z, those born between 1995 and 2010, was identified as the first digitally native demographic. They grew up as the internet was developing.
What makes Gen Alpha different is the group has grown up with computer technologies and devices as an integral part of their development. For some, screens — whether a phone, tablet or desktop computer — have served not only as entertainment but as near-constant companions.
This relationship with technology will shape Gen Alpha’s expectations as they mature and enter adulthood. A hallmark of digital technology today is personalization and customization — the ability to tailor an experience to one’s specifications. It is not a leap to see how Gen Alpha’s digital expectations may translate to overall purchasing patterns.
Some in the market already may be meeting these expectations. Brady Brewer, chief marketing officer for Starbucks Corp., said during a Feb. 2 conference call, that customization continues to be a differentiator for the company.
“Modifier sales were up 28% year-over-year in our US company-operated stores, showing that customers are visiting Starbucks for beverages customized to their preferences that they cannot find anywhere else,” Mr. Brewer said.
Starbucks also has one of the most successful app-based rewards programs in the food and beverage marketplace with approximately 30 million members and more than $3.3 billion loaded on Starbucks cards in the United States. The company has created a seamless digital ecosystem seemingly well situated to satisfy the perceived needs and expectations of Gen Alpha.
To be relevant to Gen Alpha, other companies need to follow in Starbucks’ footsteps and create digital environments to “meet” these new consumers on their terms. For many companies, much of this work has been ongoing.
The bigger challenge will be offering personalization and customization. For foodservice operators like Starbucks, it is the ability to modify a menu choice. Other companies like Chipotle Mexican Grill successfully have adopted similar practices. Whether traditional consumer packaged goods manufacturers are able to meaningfully adapt in a way that meets the growing customization and personalization expectations of consumers remains to be seen.