If you want to instantly reveal your age, just order a hot black coffee — seriously. Gen Z is flipping the script on how coffee is consumed, and spoiler: they like it cold, sweet, and loaded with creamer.
For a lot of younger drinkers, that very first cup of coffee was just as likely to be iced as it was hot. And get this—about 85% of Gen Z coffee fans are adding creamer, compared to just 70% of coffee drinkers overall. That shift in taste is making waves in the industry. Nestle, for example, has been rolling out new products to keep up—from cold-dissolving instant coffee to liquid espresso concentrates and all kinds of flavored toppings.
“We’ve done a lot of things in cold coffee the last two years to really meet this need of Gen Z and young millennials,” Daniel Jhung, president of Nestle’s USA beverage division, tells Fast Company. “That’s a big trend that we’re pushing into.”
COMBINING COFFEE AND CREAMER
The coffee world is “booming” and the opportunity to innovate, while still providing value for a broad spectrum of consumers, makes for a fun time to be in this industry, says Jhung, whose role recently expanded to oversee the Swiss company’s coffee and broader beverages portfolio.
One of the reasons why it made sense for Nestle to unite coffee and creamer under one team is because there’s such a natural connection between these products now. Or, as Jhung likes to quip: “What’s more Americana than peanut butter and jelly or milk and cereal? It’s actually coffee and creamer.”
Industry data from Circana backs this up: Coffee and creamer are co-purchased together 60% of the time versus 40% of the time for milk and cereal, and 20% of the time for peanut butter and jelly.
While it’s easy to offer coffee-and-creamer bundles to online shoppers, in brick-and-mortar grocery stores, coffee and creamer are often found in far-flung aisles—and this is a point of friction Nestle has heard about from shoppers. That’s why Nestle is thinking about how to bring coffee and creamer closer together in stores, Jhung notes.
“That’s something that we will tackle together with retailers in the future,” he says. “They’re open to it; we definitely want to push it because that’s where consumers are going naturally.”
THE FOURTH WAVE OF COFFEE
In what’s perhaps a sign of the times, this year’s Super Bowl featured a handful of commercials for coffee-related brands, including Nestle-owned Coffee mate, which advertised its new line of Cold Foams with disembodied tongues dancing to a Shania Twain song. Coffee’s prominence in the biggest advertising day of the year is fitting: Daily coffee consumption hit a 20-year high last year, according to a report from the National Coffee Association.
In addition, Nestle recently opened a 675 million coffee-creamer factory in Glendale, Arizona which is indicative of the company “putting our money where our mouth is,” Jhung says, adding that it’s designed to be flexible to respond to fast-moving consumer trends. “It’s going to meet the growing demands of this new coffee consumer for the next decade.”
While such investments are indicative of overall strength in the coffee industry, Nestle is also eager to ride what it’s calling the “fourth wave of coffee” that’s being driven by the youngest coffee drinkers. This era is defined by “the four Cs” of coffee: cold, convenient (or instant), craft and customizable.
“We think customization, experimentation is the crux of this fourth wave,” Jhung says. “These consumers really like to customize their cup, it’s really their own personalized cup.”
That trend has continued since the early days of the Covid-19 pandemic, as creators and connoisseurs converge on social media to swap recipes and at-home barista types try to replicate coffee drinks they ordered elsewhere, Jhung says. Gen Z coffee drinkers are also introducing their older-generation parents to new products for their coffee, he adds.
“What we hear sometimes is that the Gen Z [consumer] brings it into the house, and then you get the adoption from Gen X and even Boomer,” Jhung says. “It’s kind-of a cool thing to see that with the reverse mentoring.”
INSTANT IS A HIT
But what might surprise some people is the popularity of instant coffee, in particular, with the youngest of coffee drinkers. Instant coffee still trailed drip and single-cup brewers for at-home coffee preparation methods in 2024, but saw a 31% jump from 2023, according to figures from the National Coffee Association.
Instant coffee is projected to be one of the fastest-growing coffee segments in the next three years, according to industry estimates, which tracks with trends at Nestle. While it’s long been popular around the world, instant coffee has “blown up” among American coffee drinkers in recent years, Jhung says. Nestle-owned Nescafe has experienced double-digit annual sales growth, and the company launched Nescafe Ice Roast and Nescafe Gold in recent years.
Despite some misconceptions to the contrary, instant coffee is coffee—it’s freeze-dried—and consumers are increasingly drawn to it because it now marries convenience with craft offerings, Jhung says. “That’s a bubble burst [that] over the last three or four years.”
INNOVATION ABOUNDS
All of these coffee trends are indicative of a renaissance of sorts in various segments of food and beverage driven by younger consumers who see food as art, as Jhung notes. And Nestle is putting a lot of money behind keeping up with the tastes of these coffee drinkers—including launching specialty flavors like Thai iced coffee and a lavender coffee—which makes for a fun time to be at the helm of Nestle’s business, he adds.
“It’s not a boring category,” he says. “You talk with the retailers, you talk with the consumers, it gets peoples’ energy up when they talk about how they drink their cup of coffee.”
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