Generation Z: The Growth Engine of the Consumer Health Market

The global consumer health market is growing at a remarkable pace. While the market was valued at USD 189 billion in 2019, it expanded to USD 258 billion by 2023. By 2028, the market is expected to reach a value of USD 380 billion. This growth is primarily being driven by an increasing focus on prevention, rising health awareness, ongoing innovation, and the growing importance of digital sales channels. The trend is particularly pronounced in Europe: while the global market is growing at around eight percent, the projected annual growth rate in Europe exceeds ten percent, placing it above the global average. Germany, as one of the largest individual markets in Europe, plays a key role in this development.¹

Within the consumer health market, OTC medications and supplements are emerging as key growth enablers. One especially attractive factor for manufacturers and retailers is that OTC products and supplements generate margins that are up to twice as high as those in traditional grocery categories, according to an analysis of Porsche Consulting. At the same time, the segment is characterized by high repeat purchase rates. In Germany, online pharmacies are already generating 25 percent of the market’s revenue through offerings such as subscription models for OTC medications and dietary supplements.²

In this environment, Generation Z (Gen Z) is becoming a decisive factor. This cohort, born between 1995 and 2012, already accounts for approximately USD 600 billion in global consumer spending.³ Together with Millennials (born between 1980 and 1995), Gen Z represents 41 percent of total wellness spending worldwide.¹ As a result, they are fundamentally shaping the market: not only in terms of which products are purchased, but also how they are bought. For example, Gen Z shops via mobile devices twice as often as Millennials.⁴

To gain deeper insights into Gen Z’s purchasing behavior and attitudes toward OTC products and supplements, Porsche Consulting conducted a representative survey in Germany among more than 1,000 respondents aged 18 to 30. More than 80 percent stated that they intend to maintain or even increase their spending on OTC products and supplements in the coming years.

The conclusion is clear: to secure long‑term market share in the rapidly growing consumer health sector, manufacturers and retailers must truly understand Gen Z’s needs and expectations and consistently align both strategy and operations accordingly.

How Gen Z makes purchasing decisions

Gen Z’s willingness to invest in health exceeds that of all previous generations. Priorities are unmistakable: health optimization is no longer a “nice‑to‑have,” but a non‑negotiable necessity. Porsche Consulting’s survey shows that one in five respondents (20 percent) even reports cutting back on leisure activities in order to sustain spending on OTC products and supplements.

At the core of the findings are three key insights that shape Gen Z’s purchasing decisions, reflecting behavioral patterns, attitudes, and underlying values.

A holistic view of health

First, Gen Z embraces a deeply holistic understanding of health. This generation strives to optimize health comprehensively and actively enhance overall well‑being. They use OTC medications and supplements across a wide range of purposes: in addition to symptoms and pain relief, Gen Z uses them continuously and preventively to improve physical performance, sleep quality, mental health, beauty, and fitness. OTC products and supplements are not occasional purchases – they are an integral part of their daily routines.

This consistent health focus applies across all product categories and confirms that supplements, just like OTC products, have become a core component of Gen Z’s shopping basket.

Trustworthiness and transparency are decisive

Second, the analysis shows that Gen Z makes health and self‑care purchasing decisions in a value‑driven yet pragmatic way. Trust and transparency are the most important brand values when selecting OTC products and supplements. Gen Z expects clear, comprehensible information on ingredients and sourcing and favors products of natural origin. A critical requirement is that product effectiveness is credible and backed by evidence.

At the same time, around 60 percent of respondents stated that value for money is a key purchasing criterion for both OTC products and supplements. This reflects a generation that is neither naïve nor purely price‑driven. Instead, Gen Z expects a clear and verifiable benefit for every dollar spent. Higher prices are accepted only if added value is transparently explained and supported by data, reviews, or clinical evidence. About 41 percent of respondents said they are willing to pay a premium for products with proven efficacy.

Digital, convenient ordering

Third, Gen Z expects the same seamless digital experience from OTC and supplement providers that they are used to from lifestyle and tech retailers. Convenience is non-negotiable for them. While nearly half of respondents still view pharmacies and drugstores as key anchor points for purchasing OTC products and supplements, their dominance is declining. Gen Z is increasingly diversifying where they shop, with digital purchases through online pharmacies and marketplaces like Amazon or eBay gaining importance. For around half of respondents, fast delivery and easy digital ordering processes are particularly critical. Health-related purchases are no longer accepted as slow, bureaucratic transactions – they must be seamless, responsive, and available with just a few clicks.

How manufacturers and retailers need to position themselves now

A focus on holistic, personalized offerings

Gen Z expects a product portfolio that addresses its holistic health goals and integrates seamlessly into daily routines. To meet this expectation, manufacturers need to realign their portfolios and position them around overall well-being. The survey shows that products addressing multiple health goals at once – such as supporting the immune system while improving sleep quality – are just as in demand as personalized solutions tailored to individual needs.

For retailers, both online and offline, this shift highlights the need to align shelf space, digital assortments, and marketing with the growing importance of “lifestyle health.” Supply chains and inventory management must be flexible enough to enable product bundles and personalized recommendations. Companies that strategically leverage data to identify cross-selling opportunities and respond quickly to consumer preferences will stand out from the competition.

Building trust by putting quality first

At the same time, credibility is becoming the new currency: product quality and effectiveness must be backed by solid evidence, and product origins must be transparently disclosed. For manufacturers, this requires a structural shift that begins in research and development. The focus must be on ensuring the highest quality standards. For OTC products, this means demonstrating efficacy through clinical studies. For supplements, it involves combining natural ingredients with clearly traceable sourcing, supported by verifiable quality certifications and independent testing. At the same time, transparent communication is essential – placing proven effectiveness at the core of the brand message.

For retailers, this means pharmacies and drugstores must transform from transactional outlets into trusted health experience hubs, leveraging personal consultation, diagnostics, and loyalty programs. Meanwhile, online platforms and marketplaces must invest in trust-building measures, such as verified product sourcing, medically sound content, and transparent supplier credentials.

The new formula for success: fast, smart, flexible

To meet Gen Z’s demand for greater convenience across channels, companies must realign their operations. For manufacturers, this means designing production and supply networks for flexibility, smaller batch sizes, and rapid fulfillment. Successful players will combine efficient cost structures with mass customization capabilities, enabling them to offer personalized formulations, packaging, or subscription bundles at scale. Integrating real-time data from retail and e-commerce into R&D and demand planning will become a key competitive advantage – closing the loop between consumer feedback, product iteration, and production planning.

Integrating real‑time data from retail and e‑commerce into R&D and demand planning will become a critical competitive advantage, closing the loop between consumer feedback, product iteration, and production planning.

For retailers and online platforms, the message is equally clear: speed, simplicity, and reliability are the decisive success factors. Investments in last‑mile partnerships, predictive inventory management, and intuitive user experiences are essential to eliminate friction across the entire customer journey.

In short, long‑term success requires a clear commitment to innovation, evidence, data, and speed – always with the goal of delivering not just a product, but a credible health promise to Gen Z.