The state of early-career talent in the CPG industry
The consumer-packaged goods (CPG) industry is undergoing a significant and exciting transformation. In the past 15 years, nearly every aspect of the category has undergone a change, from the ways brands develop and launch products to how consumers discover and purchase them. Previously, legacy brands faced obstacles that safeguarded their market share and made it difficult for new players to enter the market. However, these barriers have largely been eliminated due to the increased availability of venture capital, cost-effective advertising options, and the rise of direct-to-consumer sales channels. The millennial and Gen Z consumer groups have caused a lasting shift in how brands operate.
Generation Z is the driving force behind changes in the CPG industry. With an estimated $44 billion in buying power and as the next group of mass-market consumers, a “one-size-fits-all” approach isn’t enough: the CPG sector must start thinking differently when attempting to reach, hire, and retain Gen Z workers.
An overview of the CPG industry
CPG, or consumer packaged goods, is an industry that encompasses manufacturers, sellers, and marketers of physical goods that are typically packaged in some way, shape, or form. Typically, CPG companies sell their goods to retailers (think: Amazon or Walmart), which in turn sell to consumers. Rapid changes in consumer demand and the fight over shelf space make CPG a highly competitive and dynamic industry, so marketing also plays a key role as companies look to strengthen the relationships between consumers and their favorite brands.
The term “consumer packaged goods” covers a variety of products but can be categorized into three main types: retail/apparel, food and beverage, and beauty and wellness.
In this post, we’ll unpack how Gen Z is influencing each sub-category and how companies in these spaces can begin to understand how Gen Z’s wants, needs, motivations, and behaviors as they transition into the workforce.
Understanding Gen Z as Consumers and as Employees in the CPG Industry
Gen Z is already taking the retail industry by storm - both as consumers and as employees.
As consumers, Gen Z is focused on value: with more than half reporting they would buy from a competing brand if the original product’s quality isn’t up to par. Value is also intrinsic to Gen Z, with nearly 7 in 10 of them more likely to purchase from retailers who give back to social causes. Retailers that want to attract Gen Z shoppers and employees should ensure product quality is accurately reflected in their pricing and align their business with the causes that are near and dear to Gen Z’s hearts.
Retail organizations must also think about adopting a mobile-first approach. A study by WorkJam found that 36% of retail managers still use handwritten notes to communicate with hourly associates; only 32% use text messages and less than 20% use email. WorkJam suggests that instant messaging, texting, or push notification capabilities can help managers directly communicate with their hourly associates to distribute real-time information about shift assignments, schedules, pieces of training, company announcements, or changes…all directly to Gen Z’s mobile devices.
To attract and retain Gen Z, retail organizations must show that they not only understand the importance of technology but a unified workplace environment. Pivoting to this will allow them to engage a generation that is highly connected digitally and relies on technology for communication, task management, and performance management. By embracing digital channels, retailers can demonstrate their commitment to keeping up with the needs and preferences of their younger workers.
Food & Beverage
Gen Z loves food and beverages: it’s reported that they dedicate 40% of their monthly spending towards exploring new foods, restaurants, packaged foods, and drinks. For Gen Z, food and drinks are a source of fun, social connection, and cultural association, which helps create a sense of belonging and community among this generation.
As the self-identified “foodie generation,” Gen Z’s digital affinity carries through the F&B sector as well. Online services like purchasing groceries, self-service kiosks, and ordering food through delivery services are driven by Generation Z; showing us that despite their want for face-to-face interactions, digital technology still reigns supreme.
Similar to what the retail sector is experiencing, ethics still matter when we talk about consumption. Gen Z is known for looking beyond the product and taking into account values such as transparency, ethics, and quality standards. To attract Gen Z, demonstrating your commitment to your mission, vision, and values is a must, not a nice to have. Consider your working conditions and efforts around sustainability, climate change, and managing waste. Help Gen Z understand that your organization is purpose-driven and ethical…it will help them identify more closely with your organization.
Cosmetics & Beauty
As the most diverse generation, Gen Z is constantly challenging “traditional” beauty standards and encouraging existing concepts to be more inclusive, authentic, and fluid. Case in point: a Viacom study found that 8 in 10 Gen Zs said “being yourself” is the phrase that best fits their personal definition of beauty.
For these young consumers, sustainability, and inclusivity are two top demands. 69% of Gen Z agree that the beauty industry needs to make their products in a more sustainable way and nearly 7 in 10 Gen Zers agree that the beauty industry should show greater diversity and inclusion in their marketing and advertising.
Gen Z expects to form connections and affinity by aligning their values to those of their favorite brands. Activism, diversity and inclusion, honesty, and transparency drive this relationship. To attract Gen Z, consider your recruiting and retention journeys. Are they reflective of how your company does business? Does the experience align with your organization’s mission, vision, and values? Do you provide an authentic, diverse glimpse into what it’s like to work there? It’s widely acknowledged that Generation Z desires authenticity (even more so than millennials). They strongly desire to express themselves and are quick to point out any insincerity or deception from brands, politicians, celebrities, and even their peers.
To keep up with brands that prioritize transparency, agility, and quality, CPG brands must reconsider their business models and return to the basics as Generation Z becomes part of the workforce. By doing so, they can build stronger relationships with their Gen Z customers and employees and remain competitive in an increasingly competitive and crowded marketplace.
For more insights like these or to learn more about how Abode can help support your Gen Z talent, get in touch with our team here.