High quality ingredients define premium food product
making a product premium, concludes a new report from UK market
analysts IGD, writes Lindsey Partos.
Far from fancy packaging, or celebrity endorsed products, consumers the definition of a premium food lies in the quality of its ingredients.
Confirming the drive by food manufacturers to use such value-added ingredients, the IGD study finds that shoppers, while still price conscious, are willing to pay the extra for something special "as it authenticates their own feelings of success".
IGD, like other market observers, believes the 'premiumisation' of the food and grocery market represents a major opportunity for the industry.
Shoppers will expect a more engaging experience and may seek a more diverse offer within the retail environment, they comment.
"Creating differential advantage through innovation and service improvements will be key in maintaining shopper loyalty," adds the report.
According to the 'Shopportunities' survey, the latest in a series of similar research studies from IGD that assesses shopper attitudes to various issues. 51 per cent of shoppers expect a premium product to use high quality ingredients.
By comparison, only 17 per cent of participants responded 'more expensive' to what makes a food premium.
Fair trade, packaging, organic and free range also all fell far behind 'high quality ingredients' as the definition of premium food.
An apparent trend in the food industry, many retailers are enhancing their premium label range as a way of differentiating their offer to appeal to the increasingly demanding consumer.
In addition to the food makers and retailers looking for added gains from their premium ranges, high margin value-added ingredients are currently the holy grail for ingredients makers looking to boost the bottom line in an increasingly competitive business climate.
For many shoppers, premium is a comparative term. Premium products or services must continually innovate to provide added value and justify their higher price, reports IGD.
'Value-added' ingredients have the scope to meet these ongoing, and increasingly urgent, needs.
