by Dave Rudman, Executive Director, WSET Americas
The Millennial generation has been cut off. The Pew Research Center places the demarcation line on January 1, 1997. They are Generation Z, the children of Generation X’s latchkey-kid cynics. As their parents were in the shadow of the much larger Baby Boomer cohort that preceded them, Gen Zs are coming of age very much in the shadow of the self-celebrated, by-others-derided Millennials. According to a Pew Research analysis, Gen Z will be the most diverse, best-educated cohort we have seen.
The eldest of the Zs are turning 21, and as they do, the time is now for the hospitality industry to begin adapting. To attract and retain these diverse and educated hospitality customers and workers, different approaches may be needed. In order to do so, three early observations stick out as opportunities:
- Millennials use lifestyle brands that target them as opportunities to signal their values to others. For Millennials, it is all about ‘me’. They came of age during great economic prosperity, and their parents famously gave everyone a trophy for their effort. But according to a report by McKinsey & Company, Generation Z values self-expression over brand signaling, and they make decisions based on what they perceive to be the truth, not the truth they want to hear. Therefore, wine and cocktail programs will need to deliver real quality at an honest price. For Generation Z, it won’t be enough to have flashy brand names on the menu. They will see through marketing that has held Millennials rapt. For staff, the importance of education and professional development that is unbranded, such as qualifications through the Wine & Spirit Education Trust (WSET), will help to ensure Z’s buy-in.
- Gen Z eschews many of the given social constructs of prior generations – and this includes drinking. According to Business Insider, sales of nonalcoholic beer and cocktails are exploding, and the decreased drinking habits of Gen Z are partially responsible. Bars and restaurants that put off introducing sophisticated non-alcoholic drinking options will miss the boat. Future Generation Z employees and customers will be attracted to establishments that take alternatives to alcohol seriously in their beverage programs.
- When it comes to employment, McKinsey also reports that Gen Z may be considerably more pragmatic that Millennials. Whereas Millennials are more likely to freelance and partake in the “gig economy,” Gen Z may prefer regular, stable employment even if the stability comes at a premium. Bars and restaurants are already keenly aware of movements to eliminate tips and server minimum wages in favor of regular wages. If Generation Z has their way, there may be an increasing demand for this type of arrangement, with less earning potential but more predictability. To be truly competitive in the employment market, emphasizing benefits that play to Gen Z’s preference for stability and security—such as training with recognized awarding bodies, health insurance and parental leave—can give employers an advantage.
For more information about WSET, please visit www.wsetglobal.com.
About David Rudman: David Rudman is the Executive Director for WSET Americas, the global leader in wine, spirits, and sake education. Previously he was Director of Education and Account Development for a major U.S. wholesaler, and began his career in the wine business in the on-premises. Dave documents his writing, travels, and the things he drinks on his multimedia platform “Drinking Things” (http://www.drinkingthings.com, @drinkingthings on everything). He is currently an MBA Candidate at Yale University, and a DipWSET candidate. He will defend to the death the proposition that riesling is the greatest varietal.
References:
Francis, T. & Hoefel, F. (2018, November). ‘True Gen’: Generation Z and its implications for companies. Retrieved from McKinsey & Company: https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/true-gen-generation-z-and-its-implications-for-companies
Fry, R. & Parker, K. (2018, November 15). Early Benchmarks Show ‘Post-Millennials’ on Track to Be Most Diverse, Best-Educated Generation Yet. Retrieved from Pew Research Center: https://www.pewsocialtrends.org/2018/11/15/early-benchmarks-show-post-millennials-on-track-to-be-most-diverse-best-educated-generation-yet/
Taylor, K. (2019, February 14). Sales of nonalcoholic booze are on the rise — and it reveals a dark truth about social-media surveillance culture. Retrieved from Business Insider: https://www.businessinsider.nl/millennials-gen-z-drinks-less-drags-down-alcohol-sales-2019-2/
