How Gen Z is Reshaping Indian Consumption Trends and Impacting Luxury and Beverage Stocks

India’s Gen Z consumers are changing the way the market operates. Survey data shows they are 17% more likely to splurge compared to Millennials. This shift is influencing everything from beverage choices to luxury spending and the experience economy. For investors, brand marketers, and retail businesses, understanding these changes is crucial to staying ahead.

Gen Z’s Spending Habits Compared to Millennials

Gen Z in India saves less and spends more than Millennials, according to recent surveys. This lower savings rate means they prioritize immediate gratification and experiences over long-term financial security. This behavior drives demand for premium products and services, especially in beverages, luxury goods, and entertainment.

This generation’s willingness to spend more freely is reshaping consumption patterns. They are not just buying products; they are investing in experiences and brands that align with their values and lifestyle.

Rising Beverage Consumption Among Gen Z

Beverage consumption is rising sharply among Gen Z, with coffee, boba tea, and energy drinks leading the trend. These drinks are more than just refreshments; they represent social status, lifestyle, and convenience.

• Coffee: Brands like Starbucks have adapted their offerings to appeal to Gen Z’s taste for specialty coffee and café culture. This has helped Starbucks grow rapidly in urban India.

• Boba Tea: This trendy drink has gained popularity in metro cities, attracting younger consumers looking for unique flavors and Instagram-worthy experiences.

• Energy Drinks: With a fast-paced lifestyle, Gen Z prefers energy drinks that promise quick boosts, making brands like Red Bull and local players popular.

  
  

Companies such as Varun Beverages and Devyani International benefit directly from this trend. Varun Beverages, a major PepsiCo bottler, taps into the growing demand for soft drinks and energy beverages. Devyani International operates popular food and beverage outlets, including KFC and Pizza Hut, which attract young consumers.

The Experience Economy and Gen Z’s Priorities

Gen Z prioritizes travel, food and beverage (F&B), and entertainment experiences over material possessions. This shift fuels growth in sectors that offer memorable moments rather than just products.

• Travel: Domestic and international travel is a key priority. Gen Z seeks unique, personalized trips that offer cultural immersion and social media-worthy moments.

• F&B: Dining out and trying new cuisines are important. This generation values quality and novelty, driving demand for premium restaurants and cafes.

• Entertainment: Movie theaters, live events, and digital entertainment platforms see increased spending. PVR Cinemas benefits from this trend as it attracts young audiences with new releases and immersive experiences.

  
  

The Taj Group, with its luxury hotels and resorts, is well-positioned to capture Gen Z’s travel and hospitality spending. Their focus on experiential luxury aligns with Gen Z’s desire for meaningful travel.

How Brands Are Adapting to Gen Z’s Preferences

Brands targeting Gen Z have shifted strategies to meet their expectations. Starbucks has localized menus and digital engagement to connect with young consumers. PepsiCo focuses on innovative flavors and healthier options to appeal to health-conscious youth.

Luxury brands are also adapting by offering more accessible price points and emphasizing brand stories that resonate with Gen Z values such as sustainability and individuality.

Retailers and marketers must understand that Gen Z values authenticity and experiences. They respond better to brands that engage them through social media, influencer partnerships, and personalized offers.

Stocks Benefiting from Gen Z’s Changing Consumption

Several companies stand to gain from Gen Z’s spending habits:

• Varun Beverages: Growth in soft drinks and energy beverages driven by Gen Z’s rising consumption.

• Devyani International: Popular F&B chains attracting young consumers.

• Taj Hotels: Luxury hospitality catering to Gen Z’s travel and experience preferences.

• PVR Cinemas: Entertainment venues benefiting from increased spending on movies and events.

  
  

Investors focusing on these stocks should watch how these companies continue to innovate and engage with Gen Z consumers.

Final Thoughts on Gen Z’s Impact on Indian Consumption

Gen Z’s 17% higher likelihood to splurge compared to Millennials is reshaping India’s consumer landscape. Their preference for beverages like coffee, boba, and energy drinks, combined with a focus on travel, dining, and entertainment, creates new opportunities for brands and investors.

Savings rates are lower, but spending is higher, signaling a shift toward valuing experiences and lifestyle over traditional saving habits. Brands like Starbucks and PepsiCo, along with luxury and entertainment players such as Taj and PVR, are adapting to capture this market.