Drug Store News Mentions First Insight | Gen Z Trading Down On Household Staples to Splurge on Health, Wellness and Beauty
Gen Z still ranks national brands #1 in purchase preference across every shelf-test category — beating store brands, premium and direct-to-consumer alternatives. But 59% of Gen Z consumers actively trade down in one category to fund a premium purchase in another.
They are cutting staples like food and beverages and household goods to splurge in health and wellness (25% willing to pay a premium) and skincare and beauty (22%). What's more, 31% say they are most likely to purchase private label or store brand food and beverages to save money, and 24% say the same for household goods. These finds come from First Insight's latest study, Is Gen Z Still Choosing Your Brand? Here’s What’s Quietly Changing Across CPG.
According to the study, Gen Z consumers are significantly less driven by the prestige and name recognition of national brands. When asked which brand “stands out first,” Gen Z respondents consistently trailed Boomers in naming established national brands compared to private label, DTC and premium alternatives. For example, when shown photos of multi-purpose cleaners across these brand types, 68% of Boomers said the national brand stood out first versus 44% of Gen Z. Similarly, 79% of Boomers selected the leading national brand of facial cleanser compared to 52% of Gen Z, with similar gaps appearing with dog food and vitamins. Yet when asked to rank brands by purchase preference, Gen Z still chose national brands #1 in every category — ahead of store brand, premium and DTC challengers alike.
The more telling signal is what happens in between: national brands lose engagement from “standout” to “learn more” interest, while store brand, premium and DTC challengers gain attention. CeraVe, a national brand, stands out to 52% of Gen Z, but only 33% want to learn more. Blueland, a DTC brand of cleaning products, stands out to just 18% of Gen Z, but 30% want to learn more. Notably, national brands are not being rejected: Gen Z’s “least likely to choose” scores barely differ from the total population, never more than three points, the study finds.
The erosion is indifference at the top of the funnel, not hostility. This pattern mirrors findings from First Insight's 2025 private label research, in which 45% of consumers reported permanently switching from a national brand to a store brand when quality met expectations.
Among the findings:
Price and quality remain the top purchase drivers, but their importance shifts by category. In the household goods and food and beverage categories, the price of products is the primary motivator for making a purchase (30% and 33%, respectively), followed by quality (29% and 30%, respectively). However, quality is the top factor for skincare and beauty (33%) and health and wellness (35%) products.
Dollar stores are becoming a go-to spot for grocery shopping. Forty-two percent (42%) of Gen Z and Gen X, and 40% of Millennials, say they have purchased food/beverages from chains like Dollar General and Dollar Tree in the past month. This is significantly more than Boomers, with only 25% saying the same.
Most Gen Z and Millennials have at least one subscription. Only 25% of Gen Z and 28% of Millennials (ages 29-44) say they are not subscribed to any product-based subscription services, compared to 55% of Gen X (ages 45-60) and 69% of Boomers (ages 61+) who say the same. Food and beverage subscriptions are the most popular for Gen Z (34%) and Millennials (31%).
Even among generations most open to subscriptions, conversions require a clear value trigger. Forty-four percent (44%) say a product is worth subscribing to instead of buying in-store if there are discounts or cost savings, 34% cite exclusive product offerings not available in-store, and 33% cite convenience.
The research identifies three distinct Gen Z buyer archetypes that operate simultaneously: The Value Seeker shops for the best deal and dominates food and household categories; the Identity Shopper prefers natural, eco-friendly and premium options and dominates health, skincare and pet categories; and the Creature of Habit buys by recognition and is most concentrated in pet food — the last category where brand inertia holds.
For CPG brands, the strategic implication is significant: the same Gen Z consumer who chooses store-brand cereal will pay a premium for AG1. Understanding which archetype your brand is competing against — by category — is the difference between a preference strategy and a guessing game.
“Gen Z still picks national brands when you put four options in front of them. What this data shows is that they’re noticing them less, exploring them less, and in categories like vitamins, they’re a coin flip away from choosing a challenger instead,” said Viki Zabala, chief strategy and growth officer at First Insight. “The brands that will win the next decade are the ones that understand exactly where they stand in the Gen Z value hierarchy — by category, by channel — and take action before that gap becomes permanent. As Boomers age out of peak purchasing, this isn’t a cycle. It’s a handoff. And right now, challengers are on the receiving end.”
These erosion signals aren’t aging out — they’re aging up. Millennials (ages 29–44) show the same patterns as Gen Z with a decade more spending power behind them. Sixty-two percent trade down to store brands, 43% intend to subscribe to food and beverage products — the highest of any generation — and 18% already shop specialty and DTC channels for food. For national CPG brands, the implication is significant: the behaviors reshaping Gen Z purchasing are already operating at full force with Millennials, the generation in peak household formation, First Insight said.
