What Makes a Food Premium?

There is much talk of consumers buying more premium food.

Producing a premium, added value product can deliver bigger profit simply because the higher amount that consumers pay means more money to be distributed through the food chain. Research published by the Institute of Grocery Distribution (http://www.igd.com/) in spring this year provides useful data for farmers wrestling with the problem of how to add value to their produce. So what makes a food premium? Here are some figures.

% consumers saying what makes a premium product:

High quality ingredients used - 41%

Well known brand - 33%

Free range - 23%

Organic - 21%

Locally produced - 19%

Fair trade - 17%

Added health benefits - 17%

Packaging looks good - 13%

Environmentally friendly - 12%

Retailers best own brand - 10%

Quality assurance standards - 10%

High animal welfare - 8%

The figures highlight that many consumers feel that ethical standards also mean premium, whether high animal welfare, environmentally friendly, free range or fair trade. It is also clear that locally produced and organic also equate to premium, and it is likely that ethical considerations influence this also. Other research indicates that consumers buy local because it is better for the environment (less food miles), and they can check for themselves that the farmer is committed to high welfare standards. Organic research also indicates that people buy for ethical reasons.

However two factors stand out as reasons that consumers see a food as premium. First, the product has to be made from high quality ingredients. This means that however ethical the product is it will not be seen as premium unless it is top quality. And second, the product has to be strongly branded, and stand for something consumers can trust. Which means a consistently good eating experience, wrapped up in good looking packaging, with a crisp name and a persuasive reason for the consumer to buy again and again.