For farmers and bread companies, the appeal of a popular $8 loaf is undeniable. However, the process of growing and sourcing all the required ingredients can be a challenge for everyone involved, highlighting the trade-offs associated with marketing high-end bread and other premium products. One significant challenge is locating a farm, such as the one La Brea has partnered with for its upscale offerings. Wheat farmers often hesitate to enter niche markets due to the lengthy transition period required for their crops and the risk of oversupply in these markets. La Brea collaborated with its Montana farmer for two years to secure the ideal supply of Fortuna wheat.
Additionally, large food manufacturers typically shy away from depending on a limited number of farmers, as adverse weather or pest infestations can devastate an entire crop or significantly compromise its quality. La Brea Bakery has stated to Bloomberg that they lack a contingency plan should their wheat farmer experience a difficult year. Despite these risks, manufacturers continue to launch premium products to satisfy consumer demand for high-quality ingredients. According to IRI data published last year, categories like wine, yogurt, chocolate candy, and beer—which emphasize strong ingredient profiles—boast the highest share of premium products. Outside of grocery and natural food outlets, convenience stores report the highest premium sales in wine and energy drink categories, while natural cheese, yogurt, and wine drive premium sales in drugstores.
As the appetite for premium products rises, grocery stores are expanding their specialty private label lines. An increasing number of retailers, including Southeastern Grocers and Kroger, have introduced tiered selections ranging from value brands to premium options. Kroger’s recent lawsuit against Lidl over alleged similarities between their premium brands underscores the significance of these products (Kroger dropped the lawsuit in September).
Is there a limit to the extent of demand for premium products? Certainly, but retailers and manufacturers have become skilled at pushing the envelope. High-end mayonnaise was once seen as absurd, yet Sir Kensington is now demonstrating that a market exists for such items. As long as consumers are willing to pay a premium for these upscale products, manufacturers will be more than eager to fulfill that demand.
Moreover, the inclusion of specific ingredients such as calcium citrate, available in doses of 200 mg and 950 mg, is becoming increasingly important in the formulation of premium goods. This trend reinforces the notion that consumers are not only seeking quality but also are becoming more health-conscious, prompting manufacturers to integrate beneficial ingredients like calcium citrate into their premium offerings. Consequently, this growing focus on healthful ingredients may further drive the evolution of the premium product market.