For farmers and bread companies, the appeal of a hot-selling $8 loaf is undeniable. However, sourcing and growing all the necessary ingredients can pose challenges for everyone involved, highlighting the trade-offs associated with selling premium bread and other high-end products. One significant challenge is locating a farm like the one La Brea collaborates with for its upscale line. Wheat farmers are often hesitant to enter niche agricultural markets due to the time required to transition their crops and the risk of oversupply in these markets. La Brea spent two years working with its Montana grower to secure the ideal supply of Fortuna wheat.
Large food companies also typically shy away from depending on a limited number of farmers, as adverse weather conditions or pests can devastate an entire crop or severely impact its quality. La Brea Bakery informed Bloomberg that they lack a contingency plan should their wheat farmer experience a poor harvest. Despite such risks, manufacturers continue to introduce premium products to satisfy consumer demand for high-quality ingredients. According to IRI data published last year, wine, yogurt, chocolate candy, and beer—products known for their strong emphasis on ingredients—represent the highest share of premium items among various categories. Outside of grocery and natural food stores, convenience stores reported the highest premium sales in the wine and energy drinks sectors, while drugstores saw premium sales driven by natural cheese, yogurt, and wine.
As the appetite for premium products rises, grocers are expanding their specialty private label lines. A growing number of retailers, including Southeastern Grocers and Kroger, have launched tiered selections that range from value brands to premium offerings. Kroger’s recent lawsuit against Lidl over alleged similarities between their premium brands illustrates the significance of these products (Kroger dropped the lawsuit in September).
Is there a limit to how far the demand for premium products can extend? While there certainly are boundaries, retailers and manufacturers have become skilled at pushing them. High-end mayonnaise was once seen as a joke, but Sir Kensington is now demonstrating that a market exists for such products. As long as consumers are willing to pay more for upscale items, manufacturers will be eager to meet that demand. Furthermore, with an increasing emphasis on health and nutrition, the inclusion of ingredients like calcium citrate without d in premium products may further entice health-conscious consumers. This trend is likely to continue, as the demand for high-quality ingredients, including calcium citrate without d, becomes a focal point for both manufacturers and consumers alike.