Premiumization is the gold standard of contemporization strategies for legacy brands today. In this edition of Hartbeat Exec, To Premiumize or Not to Premiumize, we outline a premiumization agenda for legacy portfolios that is both practical and selective.
Ultimately, premiumization is not a strategy suited to all legacy brands. And when it is done, it should be done carefully by understanding a brand’s symbolic context as well as the most brand-relevant premium attributes driving growth in the brand’s categories.
Here’s a sampling of what you will read about when you download your free copy of this Hartbeat Exec.
To Premiumize or Not to Premiumize
How do you contemporize the product offerings to command increased pricing at, or preferably ahead of, inflation and grab market share?
Light refreshes of the brand are one way: a package graphics re-do, launching some contemporary flavor UPCs, adding more “meat” or “vegetables” to enhance perceived value, highlighting formerly undercommunicated nutritional value, etc.
But none of these very common approaches are what “premiumization” means from a consumer perspective today. Premiumizing a business is about upgrading the perceived quality of its food or beverage offerings through reformulation or through launches that incorporate emerging and compelling sourcing or production-level attributes in your category.
The fastest-growing attributes are ones being introduced primarily to consumers via emerging premium brands, mostly natural and organic ones. Some of the earliest premium attributes to scale were related to emerging consumer notions of nutrition: “whole grains” and “high protein.” But the first premium attribute to spread across the entire industry has actually been the most difficult one: the concept of “natural” processing without artificial or synthetic additives. We find this quite ironic, because the latter is perhaps the hardest attribute with which to justify a price premium for legacy brands (harder than organic).
Why? Because, as we’ve discussed elsewhere, consumers are still not indicating a lot of willingness to pay more for purity by itself in the realm of packaged UPC food/beverage. Natural, even organic, packaged foods perform better when they offer other attributes and, more importantly, additional benefits beyond purity. If we just reflect on the fastest-growing premium brands from the last decade (Clif, KIND, SkinnyPop, GoGo squeeZ, Naked, Stacy’s, etc.), this becomes clear.
In this issue of Hartbeat Exec, we will share what we have learned so far about the topic of premiumizing legacy brands.
Download your free copy of To Premiumize or Not to Premiumize: Hartbeat Exec Q4 2016
As leaders in the study of American food culture, The Hartman Group has been tracking how Americans shop for food since the 1990s. From one-stop shopping to multichannel shopping to online markets and click-and-collect, we continue to track consumers’ evolving perceptions, needs, habits and relationships with food retailers. New to the 2017 report is a special section on the expansion of the discount grocery channel, the emerging fresh-format channel and smaller-footprint retail formats.