Gen z drives FMCG split: premium or private label, no middle
The gist
Gen Z and millennials are splitting the consumer goods market in two, driving explosive growth in both premium and private-label products while mid-priced brands fade fast.
What to know
- September 2026 data from NIQ and World Data Lab shows the US FMCG market forming a 'barbell'—with only premium and value segments growing, and the middle shrinking.
- Gen Z and millennials fueled 81% of private-label spending growth, and nearly 70% say store brands fit their dietary or lifestyle needs.
- Younger shoppers are happy to splurge for identity-driven premium goods and save on private label, redefining value and squeezing out the middle.
Barbell Market Squeezes Middle
September’s data reveals that both premium and value brands are expanding at the expense of mid-tier products, as younger shoppers drive simultaneous splurging and saving.
September’s data made the market split hard to dismiss. NIQ and World Data Lab said the US FMCG market is now “increasingly splitting between premium and value products,” with growth “concentrated at the premium and value ends” as shoppers move away from the middle, a pattern their September 2026 research explicitly described as a “barbell” market in which the middle loses relevance; in the same September window, younger cohorts were central to that shift, with Gen Z and millennials responsible for 81% of private-label spending growth and younger shoppers, according to NIQ, driving growth across beauty, soft drinks, and salty snacks.
What makes the September evidence especially consequential is that the squeeze came from both directions at once. NIQ said consumers had become more intentional, paying more in categories such as beauty, wellness, and specialty beverages while choosing lower-priced or private-label options for household staples, and it warned that retailer brands are no longer confined to entry-level value but are increasingly competing in premium segments too, leaving mainstream mid-priced national brands caught in the middle as premium and value both expand and the middle loses relevance in the “barbell” market NIQ and World Data Lab described.
Gen Z’s Double-Edged Value
Young consumers treat value as both savings and self-expression, fueling growth in private label for essentials and premium brands for identity-driven indulgence.
Younger shoppers are redefining value in ways that pull demand to both ends of the shelf, not just toward the cheapest option. As WARC notes, “value” now spans functional and emotional return, while Euromonitor’s framing of “smart choice” behavior shows the same consumer can buy private label for fit and savings yet still justify paying more elsewhere; that logic helps explain why “53% of consumers value treating themselves to things that bring them pleasure, comfort or joy,” even when budgets are tight.
That split is especially visible among younger consumers because private label increasingly wins on attributes they care about, while premium wins when it delivers identity and experience. NIQ found that “value doesn't just exist at the lowest price point. It exists across all price points,” with “about 68% of consumers say that private label quality is as good, if not better than national brands… nearly 70% say that it fits their dietary or lifestyle needs,” even as Hershey says, “This Gen Z… loves to experiment and play with food… open TikTok and you can spend three days just looking at what people are doing with snacks.”
