The complex consumer

Premium, value and mainstream

Consumers want more and more. In the past few years they’ve come to expect retailers to offer them a selection of price bands: premium brands alongside cheaper “value” options, as well as mainstream brands. This has been particularly evident in categories such as ready meals, snacks – and soft drinks.

Even own-label products now come in layers. While many own-label goods are still seen as a value offering, ranges like Tesco Finest and Sainsbury’s Taste the Difference have emerged as premium brands in their own right – and several supermarkets have launched “value” ranges below their mainstream own-brand offering.

But it would be wrong to think that each layer corresponds to a different type of shopper. Increasingly, consumers are choosing premium brands for special occasions, mainstream and value brands for others. These days, Britain is a nation of triple-decker shoppers.

Since we raised this occasion driven behaviour in last year’s Soft Drinks Report, the trend has become increasingly apparent. Indeed, a good selection of price bands has become a key issue when people are choosing their preferred retailer.

As the chart (below) shows, three-quarters of consumers now fill their shopping basket from all three price bands, depending on the occasion. And 85% will buy premium brands at one time or another – while virtually the same proportion will sometimes buy value brands.

The mix has been gradually moving upmarket. Recent sales trends show clear growth for premium brands – and also for the mainstream sector as consumers look for good value from their brand purchasing. This growth has been at the expense of value brands, which declined slightly in both sales value and market share last year.

Industry expert

“A key feature of the current consumer landscape is the theme of naturalness. This barely existed as a front of mind concept five years ago – although natural products were around, there was greater preoccupation with using sweeteners, preservatives and processing to meet demand for low fat, low sugar and greater convenience. Now it’s almost as if we’re returning to “the way things used to be”. Whether this consumer shift has been driven by media attention or other factors, one thing is clear – soft drinks manufacturers that make naturalness more accessible will prosper.”

85% will buy premium brands at one time or another