Is Gen Z rewriting the rules of value?

Key takeaways:

• Gen Z is not rejecting premium, but it is demanding visible justification for every price increase.
• Private label growth shows that younger shoppers will switch quickly when branded differentiation feels cosmetic rather than tangible.
• Despite financial pressure, Gen Z continues to protect small indulgences, proving that value now blends economics with emotional return.

Generation Z doesn’t dislike brands; it simply refuses to give them the benefit of the doubt. Across the food universe, value is being redefined – not as cheap and not as premium either, but as proportionate. If the price goes up, something else had better rise with it.

That recalibration didn’t appear overnight. The aftershocks of the pandemic, compounded by inflation and prolonged cost-of-living pressure, have shaped how this cohort thinks about money. According to Deloitte’s 2024 Gen Z and Millennial Survey, 48% of Gen Z respondents say they don’t feel financially secure, with cost of living their primary concern. That statistic lingers in the background of every supermarket trip. When nearly half a generation feels exposed, brand loyalty becomes conditional.

PwC’s Global Consumer Insights Pulse Survey adds another layer. It identifies ‘value for money’ as the leading purchase driver worldwide and notes widespread trading down and brand switching in response to higher prices. This isn’t the occasional belt-tightening exercise. Gen Z isn’t just reacting to inflation – it’s recalibrating expectations.

Senior executives are seeing it, too. As PepsiCo CEO Ramon Laguarta put it during earnings commentary, “We are seeing consumers becoming more value conscious.” That shift is showing up in mix, pack choice and frequency.

And yet, spending hasn’t disappeared: it’s simply been redirected. NIQ reports private label dollar sales growth of 5.6% over the latest 12-month period, alongside rising perceptions that retailer brands match – or even outperform – national labels. For younger shoppers in particular, own label is no longer a compromise. It signals savvy thinking.

The new maths of value

In practice, this means that value is calculated. McKinsey’s description of Gen Z as pragmatic and analytical shows up in the aisle. A premium biscuit has to justify its price in tangible ways. Is the cocoa content actually higher? Does it offer a functional lift, such as added protein? And what about sourcing – is there real substance behind the claim? If the differentiation is aesthetic rather than substantive, the comparison with private label is immediate.

Dairy tells a similar story. A yoghurt priced at double the standard SKU cannot lean on typography and pastel tones alone. Functional clarity – digestive support, protein density, satiety – matters. So does taste. If either falters, the premium becomes fragile.

The same tension runs through beverages. Functional drinks, speciality coffees, flavoured milks – they can command higher price points, but only if consumers feel the uplift. Premium hasn’t disappeared: it’s just under interrogation.

This is the shift. Gen Z isn’t against things that are high quality. What it is against is things that aren’t clear. People still choose to indulge because it feels good. It’s something they do when they want to treat themselves. Indulgence is still very popular.

Why indulgence still wins

There is, of course, an apparent contradiction. If Gen Z is so cautious, why do indulgence categories remain resilient?

If Gen Z is so financially cautious, why are indulgence categories still thriving? Here’s where the picture gets more interesting. Circana reports that one in five Gen Z consumers purchases a ‘little treat’ daily, and 36% say they struggle with self-control when it comes to small indulgences. Mondelez International’s State of Snacking report reinforces the emotional dimension. Globally, 73% of consumers say they prefer snacking to large meals, and most associate snacking with comfort during uncertain times. Among younger consumers, that emotional role intensifies.

Under economic pressure, small luxuries become coping mechanisms. A premium chocolate bar, a flavoured iced coffee, a bakery item with a nostalgic twist aren’t reckless splurges. They’re controlled bursts of reward. Gen Z may not stretch to a large discretionary spend, but it will allocate budget to what feels emotionally worthwhile. These purchases deliver mood lift without destabilising the weekly budget.

That’s the paradox brands need to understand. This generation will scrutinise a £3 price point on cereal but happily pay a similar amount for a single indulgent snack that delivers taste, texture and social shareability. Value, in this context, includes emotional return.

This is critical for confectionery and snacks, in particular. The product doesn’t just compete on grams per penny. It competes on mood lift, escapism and cultural relevance. Beverages face the same scrutiny. Functional drinks, speciality coffees and flavoured milks can still command higher prices, but only when the benefit feels real.

Mondelez CEO Dirk Van de Put has been candid about shifting consumer behaviour. On a recent earnings call, he described US shoppers as “very concerned in general about the economy” and “frustrated with the pricing they’re seeing,” noting that this pressure was weighing on snacking volumes. That pressure, however, doesn’t mean that premium has gone away. It’s simply become harder to bluff.

Industry bodies are seeing similar resilience. SNAC International has highlighted sustained snack category demand despite economic headwinds, while the American Bakers Association has underscored bakery’s role as an accessible comfort category in challenging periods. The data aligns with what retailers already see: consumers cut back in some areas so they can preserve small, controlled indulgences.

Retailers aren’t waiting

The competitive landscape has shifted accordingly. NIQ’s observation that private label is now widely perceived as equal to national brands signals more than growth – it signals confidence. Retailers have invested heavily in formulation, packaging and positioning. The stigma has faded.

Euromonitor’s Voice of the Consumer research shows more consumers reporting deliberate, planned purchasing compared with pre-pandemic years. Impulse hasn’t vanished, but intention has strengthened.

For branded bakery, that translates into higher expectations. If your chocolate chip cookie offers a comparable eating experience to the supermarket version, the premium must be anchored in something real – demonstrable quality, functional benefit, verified sustainability or distinctive innovation. Without that, switching is easy.

Packaging sits at the centre of this recalibration. Quiet downsizing is quickly exposed. Social media accelerates accusations of shrinkflation. Transparency is no longer optional.

The legal backdrop reflects that scrutiny. In The Wonderful Company LLC v. Nut Cravings Inc. (2023), the maker of Wonderful Pistachios argued that a competitor’s packaging copied the overall look and feel of its branded bags. A lower court had examined colours, fonts and layout separately and found no infringement. On appeal, however, the Second Circuit said that approach was too narrow, stressing that courts must assess the “overall visual impression” rather than dissecting elements in isolation. The ruling didn’t decide the infringement question outright, but it underscored how seriously packaging identity is treated.

For food brands, that distinction matters. Value is not conveyed by one design element alone – it emerges from the combined impact of colour, layout and shelf presence.

So what does Gen Z actually want?

The cohort isn’t necessarily calling for lower prices but alignment. Deloitte points to financial anxiety. PwC highlights value for money as the dominant driver. NIQ documents private label’s rise. McKinsey describes analytical purchasing. Circana captures daily indulgence habits. Mondelez shows the emotional centrality of snacking. Together, the message is clear: Value now sits at the intersection of economics, experience and evidence.

For snacks, bakery, beverage, confectionery and dairy brands, that means clarity has become a competitive advantage. If a product costs more, the reason must be visible. Better ingredients. Stronger functionality. Clearer ethics. A distinct experience. Something that travels beyond the price tag. If the answer isn’t obvious, Gen Z substitutes without hesitation.

Price sensitivity isn’t weakness; it’s literacy. This generation grew up benchmarking everything. It expects transparency and coherence, and it rewards both.

That doesn’t imply a race to the bottom but a race to alignment. The brands that succeed won’t simply be cheaper, but clearer. They’ll demonstrate, not imply. And they’ll understand that value is no longer a static number on a shelf edge label, but a relationship between cost, benefit and belief.

So yes, Gen Z is rewriting the rules of value. Quietly. Rationally. And with far more precision than many brands anticipated.