Why Gen Z Is Rejecting Traditional FMCG Brands for Homegrown Labels

In the aisles of supermarkets and on e-commerce platforms, a quiet revolution is unfolding. Traditional FMCG giants—once household staples—are facing an unexpected challenge: Gen Z consumers are turning to homegrown brands. The rise of direct-to-consumer (D2C) startups like mCaffeine, Minimalist, and Sugar Cosmetics is reshaping India’s consumer landscape. But what’s driving this shift? Is it just marketing, or is there a deeper change in buying behavior? Let’s unpack why Gen Z is breaking away from legacy brands and embracing local alternatives.

The Changing Consumer Mindset of Gen Z

Unlike previous generations, Gen Z consumers (born 1997-2012) make purchasing decisions based on values rather than just brand recognition. Several key factors contribute to their unique approach to consumption:

• Authenticity Over Legacy: Gen Z prefers brands that resonate with their personal identity and lifestyle rather than those with decades of history.
• Transparency & Ingredients: They demand complete transparency about what goes into their products, favoring brands that openly share ingredient lists and sourcing methods.
• Digital-First Shopping: A majority of Gen Z’s buying journey happens online, whether through Instagram, YouTube reviews, or direct-to-consumer websites.
• Sustainability Matters: Environmentally conscious consumption is a priority, with preference given to cruelty-free, vegan, and sustainable products.

These behavioral shifts have given homegrown brands a competitive edge, allowing them to innovate and disrupt traditional FMCG market leaders.

Gen Z FMCG Brand Shift: The Rise of Homegrown Brands

mCaffeine: India’s First Caffeinated Personal Care Brand

mCaffeine capitalized on ingredient-led branding, focusing on coffee-based skincare products. With a strong digital presence and influencer collaborations, it built a cult following among young consumers who sought natural, cruelty-free alternatives to traditional skincare.

Also Read: The Decline of Business Cards: Are LinkedIn and QR Codes Making Them Obsolete?

Minimalist: The ‘Indian The Ordinary’ Revolution

Minimalist entered the skincare market with a scientific approach, offering high-performance, no-nonsense formulations. With clear ingredient transparency, affordable pricing, and a focus on educating consumers, it gained credibility among skincare enthusiasts who sought an alternative to commercialized beauty brands.

Sugar Cosmetics: From D2C to Market Domination

Starting as a direct-to-consumer brand, Sugar Cosmetics leveraged Instagram, YouTube, and influencer-led marketing to target young Indian women. With bold branding and India-specific makeup formulations, it successfully positioned itself as an affordable yet premium alternative to legacy beauty brands like Lakmé and Maybelline.

Why Legacy FMCG Brands Are Losing Relevance

Lack of Innovation & Slow Adaptation

Legacy brands often struggle to innovate at the pace demanded by digital-first consumers. While homegrown brands are quick to launch new products based on direct consumer feedback, traditional FMCG companies rely on lengthy R&D cycles and mass-market appeal, making them slower to adapt.

Failure to Connect with Gen Z’s Digital Habits

Gen Z consumes content on Instagram, YouTube, and short-video platforms like Reels and TikTok (where available). Homegrown brands invest heavily in digital storytelling, influencer collaborations, and relatable marketing—something traditional FMCG giants fail to execute effectively.

Perceived Lack of Transparency

Consumers today are more aware and skeptical of mass-market products that do not disclose full ingredient lists. While brands like Minimalist and mCaffeine proudly showcase every component in their formulations, legacy players often rely on broad claims like ‘natural’ or ‘herbal’ without clear proof.

The Role of Social Media, Influencers & Community Marketing

Gen Z does not rely on TV commercials or print ads for product recommendations. Instead, they turn to influencers, social media reviews, and peer recommendations. Platforms like:

• Instagram: Product reels, user-generated content, and brand collaborations drive visibility.
• YouTube: Honest skincare and beauty influencers reviewing products in-depth.
• Reddit & Discord Communities: Forums where beauty and wellness enthusiasts share experiences and compare products.

Homegrown brands invest directly in this ecosystem, building a loyal community around their products rather than spending heavily on traditional advertising.

Also Read: The ₹99 Revolution: How Indian Consumers Became Addicted to Micro-Payments

Gen Z FMCG Brand Shift: Price vs. Perceived Value

Unlike previous generations, Gen Z does not just seek the cheapest option; they prioritize value, ethics, and experience. While legacy FMCG brands focus on mass affordability, homegrown brands balance price and perceived premium quality—allowing them to command higher price points without alienating budget-conscious consumers.

Sustainability & Ethical Shopping Trends

One of the biggest reasons behind this shift is sustainability consciousness. Gen Z is:

• Actively choosing cruelty-free, vegan, and sustainable packaging.
• Supporting brands with fair-trade and ethical sourcing policies.
• Willing to boycott brands that have environmental controversies or unfair labor practices.

Brands like Bare Necessities and The Switch Fix have also gained popularity for their zero-waste, plastic-free approach, reinforcing the demand for sustainable alternatives.

What This Means for the Future of FMCG in India

1. Traditional FMCG brands must adapt or risk losing relevance. Expect legacy brands to launch sub-brands that mimic D2C success (similar to how Hindustan Unilever introduced ‘Love Beauty & Planet’ as a sustainable alternative).
2. Omnichannel presence will be critical. While D2C brands thrive online, traditional players are expanding aggressively into e-commerce and quick commerce platforms like Blinkit and Zepto.
3. Innovation will drive survival. Gen Z demands ingredient innovation, sustainability, and digital engagement—brands that fail to deliver will fade away.

The rejection of legacy FMCG brands by Gen Z is not just a trend—it’s a fundamental shift in consumer behavior. Brands that understand and adapt to Gen Z’s values—transparency, digital-first engagement, sustainability, and authenticity—will thrive.

As traditional FMCG brands scramble to regain lost ground, the next decade will be a battle between legacy and agility, and homegrown brands are already proving they have the edge.