The Relentless March to Premium

June 26th, 2015 Posted by Food Trend, Healthier habits, Healthy Living, Indulgent brand strategy, Insight, Navigation, Retail brand building, retail brand relevance, Uncategorized 0 comments on “The Relentless March to Premium”

Part 3: Reimagining Food and Beverage in America

At the very center of the remarkable and unstoppable change reinventing food and beverage in America, is the advance to higher quality. It is a cultural shift up. And when food culture elevates, you must move with it or risk losing relevance.

This prompts a very fundamental question: Is the broader American population becoming increasingly “foodie”? The answer is yes. And the shift is in motion. What constitutes a higher quality food and beverage experience is changing, and with it comes a host of opportunities to redefine existing categories and create new ones.

Historical Artisan

Some categories have long-standing tradition and natural aura about them – imbued with the characteristics of quality, care and artisanal craftsmanship. Here, the stories of quality ingredient sourcing and production care resonate most readily. These are all growth categories at the high end.

  • Cheese (specialty)
  • Bread
  • Beer
  • Wine
  • Chocolate

Consumers will spend 4 to 5 times more than the average price of commodity forms and not bat an eye. The value proposition rings true. It’s just worth it because people value the experience.

Hedonic wins: The highest quality tier is positioned against indulgence and flavor adventure. Premium brands in these categories can be product driven growth engines.

Where the business expansion action is: health and wellness

Nowhere can the influence of culture on food be seen more vividly than the seismic move towards health and wellness. Once characterized as addition (better for you) by subtraction (taking something away), now healthier is an amalgam of addition by addition – better quality, real food ingredients, fresh, local, simpler recipes, a focus on more protein and portion size.

According to a recent report from Hartman Group: “where we find the most intense amount of premium market share today, we have generally found categories oriented indigenously – from their market inception – to health and wellness.”

Hartman goes on to declare nutrition bars and yogurt will continue to out-perform in the long term as a result of their strong connection to daily health and wellness goals and aspirations. Interestingly, as consumers have fully connected the dots between what they consume and their desires for higher quality lifestyles, this understanding has replaced the notoriously short-lived weight-loss motivation.

Conversely. this cultural shift works to de-position and diminish business opportunities with any categories seen as highly processed while also married to heavy calorie uptake. This is essentially different than indulgent foods where the high quality story over-rides any added calorie consideration.

In sum, the growth businesses ahead in food and beverage lie along two premium tracks:

  • Health and wellness
  • Indulgent and sensory

Mining these two areas for innovation and business development offers upside opportunity for new category creation and alignment with cultural relevance.

Action Step: Incubation

At Emergent, we see the challenges some organizations have as they face transitions from the traditional packaged foods model to the new focus on fresh, less processed.

Launching incubator teams focused on this may be the best way to allow ideas to flourish without getting marginalized along the development path – free from the potential influence of traditional methods, culture, processes and stipulations on how to go to market.

Said another way, create some insulation and distance in the development effort that permits conceptual thinking and ideas to blossom. The very path to innovation may fly in a different direction than custom would normally dictate.

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Bob Wheatley is the CEO of Chicago-based Emergent Healthy Living. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies.  Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for  higher quality lifestyles. For more information, contact Bob@Emergent-Comm.com and follow on Twitter @BobWheatley.

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