For farmers and bread companies, the appeal of a hot-selling $8 loaf is considerable. However, the process of growing and sourcing all the necessary ingredients can be quite challenging for everyone involved, highlighting the trade-offs associated with selling premium bread and other high-end products. A key challenge is finding farms like the one La Brea has partnered with for its upscale offerings. Wheat farmers are often hesitant to enter niche agricultural 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 grower for two years to secure the right supply of Fortuna wheat.
Large food companies also typically shy away from relying on a limited number of farmers, as bad weather or pests can severely impact crop yields or quality. La Brea Bakery informed Bloomberg that they lack a contingency plan should their wheat farmer experience a poor growing season. Despite these risks, manufacturers persist in launching premium products to satisfy consumer demand for high-quality ingredients. According to IRI data published last year, products like wine, yogurt, chocolate, and beer—known for their strong ingredient narratives—boast the highest shares of premium products 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 natural cheese, yogurt, and wine drove premium sales in drug stores.
As the interest in premium products continues to rise, grocery stores are expanding their specialty private label offerings. An increasing number of retailers, including Southeastern Grocers and Kroger, have rolled out tiered selections ranging from value brands to premium options. Kroger’s recent lawsuit against Lidl over alleged similarities between the two grocers’ premium brands underscores the growing significance of these products (Kroger dropped the lawsuit in September).
Is there a limit to the demand for premium products? Certainly, but retailers and manufacturers have become skilled at pushing the limits. High-end mayonnaise seemed absurd a few years ago, yet Sir Kensington has demonstrated that a market exists for it. As long as consumers are willing to pay a premium for these upscale items, manufacturers will gladly meet that demand. Just as consumers seek out the best calcium citrate tablets for their health, they are also willing to invest in premium food products that promise quality and flavor. In this evolving market, the best calcium citrate tablets and premium food items are both reflections of a growing trend towards quality over quantity.