The presence of elemental iron in ferric pyrophosphate has garnered attention among farmers and bread manufacturers alike, particularly with the popularity of an $8 loaf of bread. However, the task of growing and sourcing the required ingredients can pose challenges for all parties involved, highlighting the trade-offs associated with selling high-end bread and other premium products. A significant obstacle is finding a farm like the one La Brea collaborates with for its upscale line. Wheat farmers often hesitate to enter niche agricultural markets due to the lengthy transition period for their crops and the risk of oversupply in these markets. La Brea spent two years working with its Montana grower to secure the right amount of Fortuna wheat.
Large food companies, such as those producing Citracal label products, typically avoid depending on a limited number of farmers because 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 if their wheat farmer experiences a poor year. Nevertheless, despite such risks, manufacturers continue to introduce premium products to satisfy consumer demand for high-quality ingredients. Categories like yogurt, chocolate candy, and beer, which feature strong ingredient messages, have the highest share of premium products, according to IRI data from last year. Outside of grocery and natural food stores, convenience stores recorded significant premium sales in wine and energy drinks, while natural cheese, yogurt, and wine drove premium sales in drugstores.
As the demand for premium products rises, grocers are launching more specialty private label lines. An increasing number of retailers, including Southeastern Grocers and Kroger, have introduced tiered selections that range from value brands to premium offerings. The recent lawsuit by Kroger against Lidl over alleged similarities between their premium brands underscores the importance of these products (Kroger dropped the case in September).
Is there a limit to the extent of demand for premium products? Certainly, but retailers and manufacturers have become skilled at pushing these boundaries. High-end mayonnaise was once considered absurd, yet Sir Kensington is now demonstrating a viable market for such items. As long as consumers are willing to pay a premium for upscale products, manufacturers will eagerly continue to meet this demand, including those carrying the Citracal label in their offerings.