Is premium the future of FMCG?

Is premium the future of FMCG?

Consumers are looking for premium brands and premium brands are the most successful worldwide. Premium products grew by 21% in Southeast Asia, by 23% in China between 2012 and 2014 and 26% in the USA from Apr 2015 to Apr 2016 across the home care and personal care categories, (Nielsen, 2016a). Different factors helped the growth of premium products:

  • Economic growth of middle class: Middle class is massively growing especially across emerging countries (Brazil, China, India, Indonesia, Mexico, Malaysia, Thailand, Vietnam, etc) and by 2030 (Reuters, 2012) will almost count 5 billion people worldwide (two times the current middle class population). This will encourage people to access a many different products and to expand their shopping basket with highest probability to trade up for premium products.


  • Urbanization: many people will move from the countryside or rural areas to cities and towns (from the current 2 billion to 5 billion by 2030, Nielsen, 2016b) gaining access to more services who will help to raise the premium products consumption. For instance, even more people will access Internet to be informed and buy and even more people will access convenience store or specialised stores to purchase premium products.


  • Digitalization: At the beginning of 2017 more than half the global population uses a smartphone, almost two-thirds has a mobile phone, more than half of all mobile connections are now ‘broadband’ and arond 20% of the world’s population shopped online in the past 30 days (We Are Social, 2017) Thanks to this data and thinking about the massive digital future growth more and more consumers will be affected by the effects of the omnichannel. The combination of different and many touchpoints any time and anywhere will make information more accessible and, as a result, many consumers more influenced by advertising, educational information, promotions, etc.


  • Wider offer available (private labels and brands). If in the past only manufacturers offered premium brands in last 10 years we saw a new phenomenon showing how even retailers could launch premium labels on the market moving from aggressive promotion and discounting to better and higher quality in their offer (especialy on food and beverage).On top, we can also talk about the rising of local brands and smaller countries which, although a different impact depending on the countries and regions, massively contribute to increase the percentage of premium products on the market.


1. What are consumers looking for?

According to Nielsen (2016a) many reasons encourage consumers to buy premium products. Results are different across different countries, regions and consumers generations:

  • Overall there is no always a correlation between highest incomes and premium products purchase rate. Indeed, the study (Nielsen, 2016a) shows how in many countries and regions a better salary doesn’t always influence the attitude to spend more.
  • Price is not the only attribute consumers link to premium products. Only 31% of global respondents declared to think about a premium product when the price is high. On the other hand quality and performance are considered a plus. Quality and performances change depending on the product category we are talking about. For food quality is made by the ingredients used to make that product, while for a home care product by the effectiveness of a formulation. Other factors are the design or the brand name. The bottle design for a detergent or the brand awareness might be decisive to encourage consumers to purchase a product in a certain category regardless the quality and the performance. Even sustainable attributes are relevant especially among the youngest generations (Millennials and Generation Z).
  • Social aspirations and status are important: many respondents, especially in emerging countries, declared that buying premium products increases their self-esteem, feel them better or more confident about themselves as individual or as members of social groups.

2. Private Labels vs brands: what’s the status?

The relevant growth of the premium fmcg products on shelf has been also facilitated by the launch of premium private labels. From the report (Nielsen, 2014) we can see how Europe, North America and Oceania, are the main region wolrdwide in terms of private labels presence. In Italy (Il Sole 24 Ore, 2016) premium and bio private labels products generated €1.32 billion (13.2% of the total private label segment value of the market in Sept 2016, respectively + 14% and +16.1%, vs Sept 2015). On the other hand low cost private labels lost share (-22% in value vs Sept 2015) only representing 2.6% of the total private label segment.

Figure 1: Premium Private Labels products in Italy, branded “Top Esselunga” 

premium products in italy prodotti_top


Local retailers massively invested in brand management and innovations in recent years building a high brand equity across different categories, with the main goal of creating store loyalty and getting better trade terms conditions vs manufacturers. However, there are categories (such as personal care) showing highest and similar value share across different regions around the world.

For brands the premium fmcg path is almost mandatory. Brands should continue to raise investments in brand management through marketing investments in communication and innovations, to better communicate the uniqueness of their value proposition and make their brand equity stronger. In order to do so, heavily marketing research investments looking for new and unmet needs among consumers are required to get the right consumer insights.

However perception of brands vs private labels even for premium products changes depending on the region and on the country. In Europe, Latin America, North America and Oceania, there is a high qualitative perception of private labels, considered as key SKUs able to drive brand differentiation and store loyalty. On the other hand the situation is completely different in Africa, Asia and Middle East, where consumers show the highest willingness to pay premium prices for brands. Most of the respondents still consider buying private labels too risky.


3. Management Implications


  • Only some products can be upgraded (Nielsen, 2016a): Personal Care is the main category across many regions showing highest differentation and innovations rate vs other products categories. Regardless this trend, differences and opportunities across categories are different depending on the country and on the region. Premium perceptions are not the same worldwide for all products and categories.


Figure 2: Premium’s Value share per Category across different global regions (Nielsen, 2016a)

Premium products growth

  • Think global act local: Differences are relevant depending on the market and the region we are taking into account. This implies how even marketing strategy should be locally adapted to support the launch of a premium product on the long-term, depending on the market area to be served.


  • Focus on digital and optimize your in-store visibility: In order to get highest results and makes the product successful an excellent quality, distribution or price are not enough. Firms and professionals need to find the right communication. Depending on products peculiarities firms need to find a balance between touchpoints showing highest awareness and trials (typically TVCs and high store visibility) and touchpoints showing a high degree of persuasion (e.g. digital). In many cases both brands and private labels are still struggling to achieve these goals.





Il Sole 24 Ore (2016), Private Label, la corsa è premium, December,

Nielsen (2016a), Moving on Up, December

Nielsen (2016b), The Dirt on Cleaning, April

Nielsen (2014), The State Of Private Label Around The World, November

Reuters (2012), The Swelling Middle,

We Are Social (2017), Digital in 2017: Global Overview

Top 10 food trends in Europe

Top 10 food trends in Europe

Top 10 food trends in Europe:

Dried vegetables, protein-rich yogurt, burger without beef. These products are not only the core of organic shops, they become alternatives increasingly popular with consumers who aspire to a generally healthier diet … even if sugary is still a venial sin assumed. Overview of these top 10 food trends observed in Europe with Innova Market and Nielsen insights.

1 – Go with Transparency

27% of Europeans would like to stop eating transformed products. Consumers want a clear list of ingredients and transparency of the recipe. Some supplier don’t hesitate to highlight the recipe. In France, Marie made the brand name of one their product “All Simply “, where the ingredient list intends to be as short as reassuring. In US, for jerky products, local producer, Wild Merman, highlights  the nutrition facts.

top10food_marie        salmonjerky_1

2 – Go with Flexitarian

The soft vegetarian which consume meat in small quantity, has grown by 25% between 2011 and 2015. Vegetable Nuggets for kids, vegan salami and other alternatives are under expansion. Retailer like Carrefour adopted this trend with its private label “Carrefour Veggie” in France. In US, Hilary’s Mediterranean vegan burgers were recognized as a lighter and healthier version of a fried falafel.

top10food_veggie       hilary veggie

3 – Go with“0%”

There is now 12% desired gluten-free products, with an increase of 30% between 2011 and 2015. If these customers still a niche, the image is such that some products naturally gluten or lactose, even boast of his absence! The offer is growing, Innova Market’s insights noted, indeed a huge 26% increase of products bearing the words “without” the last four years. Recently in UK, Coca cola launched its new brand ‘Coca Cola Zero Sugar’ to highlight the fewer calories. In 2020 they target more than 50% of their sells from Diet coke range. Bjorg, widely known for their Gluten-free assortment, are present in 1/3 home in France.

top10food_zero top10food_bjorg

4 – Go with Natural Process

Key success is to enhance naturalness of the products, betting on natural and ancestral manufacturing methods. Fresh prepared goods are highly valued by retailers. Nestlé yogurt brand “La Laitière” use this image of ancestral fabrication indicating that only the fermentation participated in rendering its dairy product. Private label as “Carrefour Lunch Time” highlights this natural made image.

top10food_lalaitire top10food_salad

5 – Go with Vegetables & Fruits

These plants have never been so good news! If their benefits are globally well communicated, its hegemony is now spread in many product categories. For example fruit juice, a quarter of new products marketed in 2015 has at least one vegetable in their composition, against 16 % in 2011. Another trend that follows, the soup acquires acclaim . In Spain, the cold & hot soups are increasingly premium, like the brand Tio or Mucho Gazpacho

vegetable souptop10food_tio

6 – Go with Labels

The origin is a new recurring motif in the marketing of food products. Recognized labels linked to the origin of products tend to comfort consumers. The development of protected geographical indications (PGI) help brands to seduce shoppers. In France, as each year, Herta (Nestle) and Fleury Michon still the most loved brands, their labels play a large part of this success.

top10food_ham top10food_herta

7 – Go with Local

Local taste preference dominates: Local companies often have a deeper understanding of consumer tastes in their market and can respond more quickly to changing needs. Local products are a great way through which to differentiate, able to reinforce the link with local farmers and producers and provide a guarantee of food security. Retailers know how to link local farmer to shopper mostly through private label. Carrefour has one especially for Italy (Terre d’Italia) and France (Reflets de France). Virginia Tea company is a popular start up which promotes the American East Coast tea with an exclusive local sourcing.

top 10 food trends  top 10 food trends


8 – Go with Protein

Rich-protein products keep healthy. These products, originally created to satisfy athletes, are now desired by the mass market. Rich protein yogurt are a good example in terms of diversification as Danone did with Light & fit assortment. In a more local format, Think Jerky got funded in two month in 2015 by proposing a creative and healthy snack offer.



9 – Go with Fun

In 2020, Millennials will be the largest group of shoppers worldwide. Global mobile penetration will be 70% and the main influencing device will be online video. Buzz create an emotional link with the product, well-executed humor appeal, enhances recollection, evaluation and the intent to purchase. Doritos Roulette is a famous case, containing some ultra-spiced chips, makers claims they are the hottest sold in the UK. Jelly Belly is also well-known among younger in this concept, they even created a board game with their candies. In YouTube they are both doing the buzz with more than ten millions views.

top10food_jelly top 10 food trends


10 – Go with Exoticism

Discovering new foreign flavours still a famous trend and constantly renewed. Exotic products remain a niche market which contributes to renew the offer. It’s important for retailer and supplier to find the exotic touch of the moment. As Asian flavours are quite trendy in Europe nowadays, Unilever with his local brand Conimex in the Netherlands and global brand, Knorr Asia.



Source: Innova Market Insights, Nielsen, Kantar TNS, top 10 food trends

Amazon creates its own private label range

Amazon creates its own private label range


Amazon started selling its own private label range in the U.S:

Since June, the e-commerce giant is launching three different ranges of product with their own specialty offer. “Happy Belly” becomes a food & beverage brand offering snacking, tea, coffee and different oils for cooking; “Wickedly Prime” will be devoted for Meal-to-go, “Mama Bear” will contain a wide selection of baby products. Once again this offensive will fortify the dominance of the company in the e-commerce landscape.


According to the Wall Street Journal, Amazon targets also selling spices, housewares, vitamins, detergents and even layers. For Amazon, Millenials consumers not only have much better opinion on private-label brands than older consumers, they are also more likely to purchase grocery products online.

This move could prove to be significant event in online food retailing

Therefore this could have serious consequences for competitors and for brands. Because the giant obviously has leadership positions in sales and niche sectors, generating the best profits, as did the modern trade before him. This new offensive should allow Amazon to get ahead of its current suppliers for at least two reasons:

mama bear amazon

A mastered launch with data insights

First, the company is already popular enough and will not need to spend millions of dollars in marketing and advertising. Second, Amazon has a phenomenal database that allows it to predict what products will be best seller. The giant e-commerce platform can thus launch its new brands with low risk.


Amazon Prime has about 50 million members.

These new brands are reserved exclusively for Prime service’s subscribers, which is positioning itself increasingly as the Amazon’s main growth engine. In addition to private label, Amazon Prime offers already benefit with digital content, free restaurants delivery, online Video platform and exclusive products.

We can be sure these launches will be closely watched by the CPG industry as a whole !


Turning salmon into a rich protein snack

Turning salmon into a rich protein snack

The first wild salmon jerky in protein snack

Brendan Janet and Tracy O’Brian began experimenting with their own salmon jerky protein snack on their permaculture community in Tacoma WA. The couple is passionate about pescatarian diet and design.

Wild Merman Salmon

Wild Merman Salmon Jerky uses wild caught Alaskan Keta salmon, one of the most abundant and sustainable sources of protein on the planet. Unlike mass consumption who use emulsified salmon, they use whole muscle meat, which helps preserve salmon’s delicate and valuable protein. They add wildflower honey to balance the savoriness of the jerky. The icing on the cake come with Brendan’s skill which designed the impressive packaging and logo.

As people are looking more into high protein snacks (See top trends), this concept could be interesting in convenience store and flexitarian retailer.

protein snack wild merman

The innovation:

  • Original snack with high protein
  • Gluten free, organic, GMO’s
  • Hand-crafted in small batches
  • Product transparency

protein snack wild merman

Results :

With crowdfunding, the start-up obtained the triple of funding expected, allowing them to scale up the production to deliver rewards and begin selling online and in stores around the country.

New Concept: Cereal Bar stores

New Concept: Cereal Bar stores

How to make processed food cool again ?

Opening a bar store

Cereal bars/restaurants are bourgeoning and have become very trendy. The concept seduces everyone, and recently one of the biggest supplier opened a brick and mortar store : Kellogg’s !

Named ” Kellogg’s NYC ” the permanent store is open since July 2016 in Time Squares. It is part of a push by Kellogg’s to reinvigorate US cereal sales, which have declined as consumers choose healthier foods over sugary and processed products (See our top food trends)


The menu bowls offer all kinds of the cereal’s brand, but not only. Indeed, Kellogg’s offers in this ambitious bar, a culinary creations in an attempt to improve the image of its brands. The bowls, which cost between $8 and 6, are accompanied by little surprises, like those in cereal boxes. For a full breakfast, shopper can customize the recipes by choosing among dozens of ingredients, such as fruits, nuts, skim milk, or even lemon and spices.


It’s not the first all-cereal bar to open:

New York – In Manhattan, Kith Treats is a sneaker-inspired “cereal bar” where people can eat cereals on shoes boxes in a hyper trendy store.


London – Since 2015 the Cereal Killer Café which already has two store is famous for being the inventor of the concept. The format is quite creative and young with lot of events.


Paris – Opened in January 2016 “Le Cerealiste” is a version more standardized and affordable for consumers.


Often referred as ” hipster ” , the breakfast bar concept has also won Madrid, Sydney and Melbourne.

Keep growing DTC

B-Ready : The Newest Nutella’s Chocolate Bar for your Breakfast

B-Ready : The Newest Nutella’s Chocolate Bar for your Breakfast

Finally Ferrero innovates!


After three years of testing and development, Ferrero launches in France a novelty on breakfast biscuit market: B-ready, signed Nutella filled bars. The launches are rare in Ferrero, because the tests last long and that the elect are few, but those who pass all filters are calibrated to be cash machines. The B-ready bar have just made their appearance at Auchan grocery store, which presents as an exclusive (although at Ferrero, it is emphasized that the distribution is also underway in other stores).

The first announced events are scheduled for early March. The novelty is sold € 2.10 8 bars (153 g). Ferrero has long sought to settle on the breakfast market with a specific offer to attack Kellogg innovations. In 2009 already, Linear had spotted the first bars of tests Kinder Breakfast. The adventure was cut short. In 2013, a first version of Nutella bars, called Bready, has appeared in a few targeted stores. Ferrero took his time to refine the concept, for example by adding crispy balls in the feed Nutella. B-Ready has been officially launched in Italy in 2014 and in Spain in late 2015. In 2016, it is the turn of France to host the new.

Find bellow a short video to appreciate this new product in this early wednesday!