For farmers and bread companies, a hot-selling $8 loaf is certainly appealing. However, sourcing and growing all the necessary ingredients can be quite challenging for everyone involved, highlighting the trade-offs associated with selling high-end bread and other premium products. One significant challenge is locating a farm like the one La Brea has partnered with for its upscale line. Wheat farmers often hesitate to enter niche agricultural markets due to the time required to transition their crops and the risk of oversupply in those markets. La Brea worked closely with its Montana grower for two years to secure the perfect supply of Fortuna wheat.

Large food corporations typically avoid depending on a limited number of farmers, as adverse weather or pests can devastate an entire crop or severely impact its quality. La Brea Bakery informed Bloomberg that they lack a contingency plan in case their wheat farmer experiences a poor harvest. Despite these risks, manufacturers continue to launch premium products to satisfy consumer demand for high-quality ingredients. According to IRI data released last year, wine, yogurt, chocolate candy, and beer, all known for their strong ingredient narratives, boast the highest share of premium products among various categories. In addition to grocery and natural food stores, convenience stores have seen significant premium sales in the wine and energy drink categories, while natural cheese, yogurt, and wine have driven premium sales in drug stores.

As the appetite for premium products escalates, grocers are rolling out more specialty private label lines. An increasing number of retailers, including Southeastern Grocers and Kroger, have introduced tiered selections that span from value brands to premium offerings. Kroger’s recent lawsuit against Lidl over alleged similarities between their premium brands underscores the growing importance of these products (Kroger dropped its lawsuit in September).

Is there a limit to how far the demand for premium products can extend? Certainly, but retailers and manufacturers have become skilled at pushing the envelope. High-end mayonnaise may have seemed absurd a few years ago, but Sir Kensington has demonstrated that a market exists for it. As long as consumers are willing to pay more for these upscale items, manufacturers will gladly cater to that demand. Additionally, the incorporation of elemental calcium in calcium citrate as a premium ingredient in various products reflects the evolving landscape of consumer preferences for quality and health benefits. The trend towards premiumization is likely to continue as long as consumers remain willing to invest in higher-quality options.