"We are seeing growth in dairy, deli and bakery when it comes to [Gen Z and Millennial consumers], but for us to continue that growth, we really do need to focus on their needs and not just ask them to buy the pastries and breads of yesteryear. Furthermore, when we just look at dairy, deli [and] bakery performance, Gen Z and young Millennials are currently punching under their weight when it comes to things like frequency and spend, so we have an opportunity to be gained by driving more of them and finding more relevance with them,” said Jonna Parker, principal II and fresh foods team lead at Circana.
Gen Z consumers seek global flavors, taste fusions
A third (33%) of Gen Z and millennial shoppers are more likely to try new foods than Boomers, 15% of whom say the same, according to IDBBA What's in Store 2024 and 210 Analytics data.
Young consumers are also more familiar with fusions of culinary flavors and new product types. A third of Gen Z consumers (34%) would sample a free “crookie” — a blend between a croissant and a cookie — compared to 18% of Boomers, according to the same research.
While Mexican, Italian and Chinese food are popular among age demographics, Gen Z consumers over-index Gen X and Boomers in street food, Japanese and sushi, and Korean food. Almost half (44%) of Gen Z consumers wanted more street food options in their deli-prepare foods and bakery, while 35% and 29% of Gen Z shoppers wanted more Japanese and Korean food options, respectively, per the same data.
“Food trucks and street food are another place where generational divides exist, younger generations … view them just as another restaurant, just as another meal option, and this really opens up an opportunity in the deli,” Abigail Vaerten, client insights consultant at Circana, said in the webinar.
Sushi is ‘a juggernaut’
Deli-prepared sushi surged in recent years, but sales growth slowed in the first half of 2024, especially among older demographics.
Total deli sushi market sales reached $2.6 billion, with more than 286 million units sold for the 52 weeks ending Aug. 11, with dollars up 0.7% and units down 1.9%, according to Circana MULO data. Trips for deli-prepared sushi also dropped.
While sushi growth might be slowing, one out of every five households in the US purchase deli sushi, and many young consumers enjoy sushi beyond the typical restaurant setting, Parker explained.
"Sushi, in short, has been a juggernaut. It has also been a juggernaut for the deli because it has now become a ubiquitous product, especially with Gen Z. ... Younger Millennials and seniors are actually lagging in [deli] sushi, and I think part of that is because really a grocery store sushi does not necessarily mean you love sushi. ... There are many places to get sushi," Parker elaborated.
