|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
Premiumisation in the food business: Playing the long game
|
|
Thursday, 17 April, 2025, 16 : 00 PM [IST]
|
|
Puneet Davar
|
Picture this, you’re out at a supermarket shopping for groceries. You walk into the food aisle and you’ll see that a lot of new, premium brands taking up more and more shelf space than ever before. Ever wondered why that is? The reason is “shift in consumer behaviour.” Look at a menu in a restaurant, and you’ll feel it as well. The choices people make have changed. They no longer just want food; they want an experience. They want to know where their ingredients come from, how their food is made, and whether it aligns with their values. Quality, craftsmanship, and storytelling matter now more than ever.
In business, just like in running, there are two ways to play the game. The first is to sprint, chasing short-term wins, looking for quick results, focusing only on immediate numbers. The second is to build a long, sustained, scalable approach where each step contributes to something bigger. And nowhere is this philosophy more relevant than in the food business, especially when we talk about premiumisation.
The Shift towards Premiumisation
The rise of premiumisation in the food business isn’t just about charging higher prices. It’s about delivering value that justifies the premium. It’s about taste, authenticity, health, sustainability, and indulgence—all rolled into one.
The Key Drivers of Premiumisation
1. Evolving Consumer Preferences
Today’s consumers are more informed than ever. They read labels, check ingredients, and make conscious choices. Whether it’s cold-pressed oils, single-origin chocolates, or artisanal cheeses, the demand for high-quality, differentiated products has skyrocketed.
And this isn’t just limited to high-income groups. Even middle-class consumers are willing to spend more, provided they see the value.
2. Health and Wellness
Gone are the days when “healthy” meant bland and boring. Today, nutrition is a lifestyle statement. From protein-rich Greek yogurt to plant-based meats, people are seeking products that are both indulgent and good for them. Premiumisation isn’t just about making food fancy; it’s about making it healthier, cleaner, and better.
3. The Experience Economy
Food is no longer just about sustenance. It’s about stories, emotions, and experiences. Whether it’s the hand-churned butter from a small dairy farm or coffee sourced from a single estate in Coorg, people are paying for the story behind the product.
We’ve seen it with the craft beer movement, with artisanal bread, and now, even with premium dairy, chocolates, and bakery products. When people connect with a product’s journey, they are willing to pay a premium.
4. Digital Influence and Social Media
Instagram, YouTube, and food blogs have completely transformed consumer perceptions. What was once a niche gourmet trend can become a mainstream phenomenon overnight. Premium products get visibility like never before, influencing millions of consumers globally.
Think about the rise of sourdough bread, cold brews, or gourmet cakes. These trends took off not because they were advertised traditionally but because people shared their experiences online.
The Challenges of Premiumisation
Premiumisation sounds great, but it’s not easy. It requires patience, a strong brand philosophy, and an unwavering commitment to quality. You can’t fake premium. Either you deliver the experience, or consumers will see through it.
Some of the biggest hurdles businesses face:
- Balancing Scale and Craftsmanship: How do you maintain the essence of a handcrafted product while scaling up? This is where many brands struggle.
- Sourcing the Right Ingredients: Premium products demand premium raw materials. Finding reliable sources, ensuring ethical sourcing, and maintaining consistency is easier said than done.
- Consumer Education: People are willing to pay more, but they need to understand why. Storytelling and branding are crucial in premiumisation.
- Justifying the Price Point: Price-sensitive markets can be tricky. The key is to offer a clear differentiation that consumers find worth paying for.
How to Approach Premiumisation
Premiumisation isn’t just a buzzword; it’s a mindset. When you develop products, here are a few questions to ask yourself:
- Can this product stand out on quality alone?
- Is this something we would be proud to serve to our own families?
- Are we playing the long game, building for the future rather than chasing short-term trends?
Instead of chasing cheaper alternatives, focus on innovation-developing cleaner, better, and high-performance ingredients that give chefs and businesses an edge. Your goal shouldn’t be to just sell another product or a particular key ingredient. It should rather be focused on creating exceptional food experiences.
The Future of Premiumisation in India
The premium food segment in India is still in its early stages, but it’s growing rapidly. Consumers are trading up, moving from mass-market brands to better, higher-quality alternatives. We are seeing it across categories:
- Mass-produced chocolates to bean-to-bar artisanal chocolates
- Instant coffee to specialty brews
- Regular bread to sourdough and multigrain loaves
- Factory-made dairy to organic and A2 dairy products
This shift is only going to accelerate.
Final Thoughts: Running the Long Distance
Premiumisation is about patience, it’s a long-term game that requires consistency, trust, and an unrelenting focus on quality.
And when you do it right, when you build something that truly stands apart, the market responds. Not overnight. Not in a sprint. But over time, one step at a time.
(The author is MD & CEO at Tropilite Foods)
|
|
|
|
|
|
|
|
|
|