For farmers and bread companies, there’s much to appreciate about a popular $8 loaf. However, cultivating and sourcing all the essential ingredients can be quite challenging for all involved, highlighting the compromises that come with selling premium bread and other high-end products. A significant hurdle is locating a farm similar to the one La Brea has partnered with for its upscale offerings. Wheat farmers often hesitate to enter niche agricultural markets due to the lengthy transition time for their crops and the risk of oversupply in these markets. La Brea collaborated with its Montana grower for two years to secure the right supply of Fortuna wheat.
Large food companies typically steer clear of relying on a limited number of farmers because adverse weather or pests can devastate an entire crop or significantly reduce its quality. La Brea Bakery informed Bloomberg that they lack a contingency plan if their wheat farmer experiences a poor yield. Nevertheless, despite these risks, manufacturers are persistently launching 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, all of which emphasize strong ingredient messaging, boast the highest share of premium products.
In addition to grocery and natural food stores, convenience stores have witnessed substantial premium sales in the wine and energy drinks sectors, while natural cheese, yogurt, and wine have driven premium sales in drugstores. As the demand 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 options. Kroger’s recent lawsuit against Lidl concerning alleged similarities between the two grocers’ premium brands underscores the significance of these products (Kroger dropped its suit in September).
Is there a ceiling to how far the demand for premium products can extend? Retailers and manufacturers have certainly become skilled at pushing the envelope. High-end mayonnaise was once considered absurd, yet Sir Kensington is now demonstrating that there is indeed a market for it. As long as consumers are willing to pay more for upscale items, manufacturers will be eager to fulfill that demand. In this landscape, products like Citracal liquid are also gaining traction, reflecting the growing consumer appetite for premium health-oriented offerings. As the trend continues, we can expect to see Citracal liquid and similar products being featured more prominently in the premium segment, further catering to health-conscious consumers who are willing to invest in quality.