Move Over Millennials: Restaurant Operators Are Finding Ways to Cater to Generation Z

Restaurant operators who are growing tired of catering to Millennials can rejoice: There’s a new, perhaps more important, generation taking a seat at the table: Generation Z.

Born after 1995 — just kids and teens right now — Gen Z are the biggest population swell since the Baby Boomers, and officials at market-research firm The NPD Group say Zs are already making a big impact on the restaurant industry.

“Gen Z are very important and only going to get bigger,” said NPD analyst Bonnie Riggs. “Now is the time to start building loyalty with them. They’re going to drive your business in the years to come.”

In the year ended February 2016, Gen Z accounted for $78 billion spent at restaurants, according to NPD. Additionally, the group makes up the second-largest share of restaurant visits — Boomers are the largest.

Although still very young, Zs are a group that is digitally and socially connected. A recent report from Sparks & Honey, a culturally focused ad agency, shows Zs have the ability to multitask across more screens then Millennials, including TV, cell phones, laptops, desktop computers and iPods/portable music players. They also use YouTube and other social media sites to conduct research for school assignments.

“[Operators] have to be on the leading edge with older Gen Zs,” Riggs said.

This group is also self-reliant, entrepreneurial and socially conscious, with 26 percent of teens ages 16 to 19 volunteering in 2013, according to Sparks & Honey’s Gen Z report.

Like Millennials and Gen X, Zs make the majority of their restaurant visits at quick-service chains, although older Zs — those between the ages of 11 and 19 — tend to visit fast-casual chains more, NPD found. In the year ended February 2016, 7 percent of the per capita visits made by older Gen Zs were to fast-casual chains, compared with 6 percent of per capita visits for Millennials and 5 percent for Gen X.

When visiting restaurants, these kids and teens tend to go out as a group and share their food. According to NPD, their average party size is 2.4, and they have a higher percentage of shared meals than any other generation.

Gen Zs are also eating better than Millennials were at their age. NPD’s new Generational Study: The Evolution of Eating Report, indicates a shift among Gen Z toward more healthful food choices and snack foods, while maintaining perennial favorites. For example, while hamburgers are among the top three foods Gen Zs eat at quick-service restaurants, they eat them less than Millennials, favoring chicken and pizza instead, NPD found.

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