Consumers willing to pay more for premium products

Almost one in three consumers in New Zealand would consider spending more on a premium offering in key grocery categories, recent Nielsen research has shown.

Nielsen Scantrack data highlights that consumers are trading up everyday products in their shopping trolleys, with meat and seafood being the top choices when considering a higher price tag, and tea and coffee coming in at second with one in four Pacific consumers treating themselves to a premium beverage. 

In particular, coffee pods in supermarkets have doubled to $15 million in the past two years – growing eight times faster than total coffee. 

Julianne Westaway, Director at Nielsen said: “A premium product is one that costs at least 20 percent more than the average price for the category.”

Dairy products were also revealed as the third category where consumers are willing to pay more, with 23 percent of consumers saying they would purchase a premium product.  

“Pacific shoppers are socially conscious when it comes to top tier goods, with more than two in three consumers spending more on products that contain environmentally friendly or sustainable materials. They are also choosing products that are organic or have all natural ingredients,” Westaway added. 

Three in five consumers demonstrated a willingness to pay more for products that deliver on social responsibility claims. 

“’Green’ attributes justify a higher price tag in many consumers’ minds and they show a willingness to pay for them,” included Westaway. 

Marketers can capitalise on this premium trend and brands can drive growth in their premium offerings, or support a higher price point, by tapping into Fair Trade and responsible practice certifications. 

“Premium products should be activated in a way that amplifies the product’s unique proposition,” Westaway concluded. “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.”