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Quality, Indulgence, and Premiumization Strategies in Alcohol, Soft Drinks, and Hot Drinks - defending against margin erosion

  • January 2015
  • -
  • GlobalData
  • -
  • 84 pages

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Synopsis
Quality, Indulgence, and Premiumization Strategies in Alcohol, Soft Drinks, and Hot Drinks - defending against margin erosion”provides a comprehensive overview and strategic analysis of how brands can effectively defend their profits despite the emergence of value competitors. The report focuses on the strategy of premiumization, to encourage consumers to trade-up in terms of both price and quality. The growing popularity of private label alternatives is also addressed - and what brands can learn from them, and ultimately defend themselves against discounters by offering consumers the highest quality, and drive sales.

Summary
- The global financial crisis has affected consumer spending, and despite economic improvement across much of Europe and the US, consumers have not reverted to previous spending habits. Manufacturers must consider the austerity needs of these consumers by providing value, in terms of both low cost, and trading up for better quality.

- Taste and indulgence will continue to drive consumption across Drinks categories, and manufacturers should ensure that their products offer the best overall experience. Consumers are unwilling to sacrifice taste for other concerns, such as health, re-enforcing the need to offer products that offer uncompromised moments of pleasure and indulgence, particularly in non-BRIC countries.

- In BRIC countries in particular, consumers increasingly seek products that offer assurances of quality, and manufacturers should respond by ensuring transparency in terms of sourcing, production, and ingredients, to drive sales, as the desire for authentic and trustworthy products increases.

- Many consumers no longer view private labels as cheap, lower-quality imitations of branded products, instead perceiving them to be of an equal, and sometimes higher, quality. Brand manufacturers can defend against the growing popularity of private labels by accelerating innovation, or cornering a niche market that holds no attraction for private labels. In addition, the growing premiumization of private label offers means that these products could improve the profitability of some manufacturers.


Scope
Weak consumer confidence, rising production costs, and the rise of discounters and private labels are threatening the profit margins of drinks manufacturers worldwide. However, there are occasions when consumers will trade up to a more expensive than average product that offers a lot for the additional amount paid. This means that manufacturers need the correct premiumization and indulgence strategies now, in order to not just protect profit margins, but to also position themselves to make the most of future growth opportunities. “Quality, Indulgence and Premiumization Strategies in Food - Defending Against Market Erosion”provides manufacturers with the insight and knowledge to protect, and drive their sales.

In particular, this report includes:

- Identification of trading-up opportunities for manufacturers, where consumers whose stated desire for indulgence and quality is not being met.

- How manufacturers of branded products can appeal to price-conscious consumers by providing everyday low-prices, as opposed to offers and deals.

- The necessity of ensuring that products focus on taste and ultimately experience, as consumers still seek the most indulgent products, despite their best intentions to eat more healthily.

- How private labels are becoming a genuine threat to even the biggest brands, and how these brands can defend against market erosion from lower-priced competitors through premiumization.


Reasons To Buy
- This report provides the knowledge and insight to aid branded manufacturers to defend against margin erosion from the competition and consumers value-seeking behavior.

- This report identifies the future directions for manufacturers to target changing consumption habits, as ethicality, quality, and craftsmanship become increasingly influential.

- The growing popularity of private labels can be detrimental to brands; this report will identify the key areas in which to defend against incursion from private label products, and regain lost market share.


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