Premium purchases are not just made in glamorous, luxury product categories. In the Pacific, it is the grocery sector that has the most premium potential. Consumers are trading-up everyday products in their shopping trolleys; and marketers can capitalise on premiumisation trends and consumers’ willingness to consider a higher price tag in key categories.
Nielsen defines ‘premium’ products as those that cost at least 20% more than the average price for the category. Meat and seafood are the top choice when considering a higher price tag. Just under one-in-three consumers (30%) in both Australia and New Zealand would consider spending more on a premium offering in these categories.
This is followed by coffee and tea; more than one-in-four Pacific consumers (28%) are prepared to treat themselves to a top-dollar drip. In New Zealand, coffee pod sales in supermarkets have doubled to $15 million in the past two years – growing eight times faster than total coffee.
Dairy products round out the top three, with 23% of consumers that say they would consider paying more than average. Nielsen’s recent analysis on the ice cream in Australia revealed that consumers are spending more on the category, driven by a trend toward premium, indulgent ice cream flavours.
Pacific shoppers are very socially conscious when it comes to top-tier goods. ‘Green’ attributes justify a higher price tag in many consumers’ minds – and they show a willingness to pay for them.
More than two-in-three consumers in the Pacific are willing to spend more on products that contain environmentally friendly or sustainable materials; and products that are organic or have all natural ingredients. Three-in-five demonstrate a willingness to pay more for products that deliver on social responsibility claims.
This has big implications for top-ranking category, coffee and tea. Brands can drive growth in their premium offerings, or support a higher price point, by tapping into Fair Trade and responsible practice certifications. Social responsibility is a key factor in managing consumers’ willingness to spend more for their daily coffee.
Higher prices set a higher bar for product performance; when a product is positioned as premium, consumers have less tolerance for poor performance or undesirable attributes. Premium products should be activated in a way that amplifies the product’s unique proposition. Several considerations should be kept in mind when optimising how these brands are marketed including how consumers see the products on the shelf, pricing promotions and emotional resonance of brands in managing perceptions.
ABOUT THE NIELSEN GLOBAL SURVEY
The Nielsen Global Premiumisation Survey was conducted March 1–23, 2016, and polled more than 30,000 online consumers in 63 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample includes internet users who agreed to participate in this survey and has quotas based on age and sex for each country. It is weighted to be representative of internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.6% at the global level. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% internet penetration or an online population of 10 million for survey inclusion.