Amid the current cost of living pressures in Australia, consumers are scrutinising product value more than ever, carefully weighing whether premium drinks are worth their higher price tags. But what does “premium” truly mean to consumers?
Quality ingredients and reputable brands
Consumers state that there are several key attributes that they use to help define a premium drink to them, including:
- High-quality ingredients – Almost two thirds (62%) of consumers believe premium drinks should contain high-quality ingredients.
- Expert preparation – 41% associate premium with being expertly made or prepared.
- Venue specificity – More than a third (35%) are impressed by something unique to a venue.
When consumers decide to treat themselves to a premium drink, category switching is the most common method with 44% of consumers stating that they are more likely to choose a different drink category compared to what they would usually drink. This is more likely than to switch to a brand considered more premium within the same category (38%) – which highlights how consumers attribute ‘premium’ to certain categories more than others.
Premium preferences for occasion types
There’s an opportunity for brands to increase their presence in high-value channels where consumers are more likely to trade up to premium options. For example, over half (54%) of consumers are more inclined to choose premium drinks in formal dining settings, while 41% associate premium consumption with rooftop bars, and over a third (35%) with holiday resorts. (Suggesting a holiday area premium strategy is important for brands)
In addition, there are further opportunities during the occasions when consumers are more likely to choose premium drinks. For this reason, brands and operators need to resonate during special moments such as:
- A birthday or anniversary (51%)
- A romantic meal (44%)
- A formal dining experience (43%)
Maximise the premium portfolio
A “with food” strategy is particularly crucial in fine dining and other food-led channels and for dining/special occasions, where pairing premium drinks with meals heightens the overall experience.
Furthermore, drinks brands and suppliers aiming to succeed in the premium category need to develop targeted strategies to align with both consumer expectations and market dynamics, focusing on:
- Activation and education – Consumers proactively look for information about the quality of ingredients, the expertise involved in crafting drinks, and unique production processes.
- Brand messaging – Brands capturing the essence of what makes a product premium are better placed for success.
There are compelling opportunities for growth as premiumisation continues to prevail in the Australian On Premise sector. Understanding the nuances of what consumers perceive as premium – whether it’s brand trust, quality, or uniqueness – will help to capture attention and drive sales.
CGA by NIQ’s OPUS (On Premise User Survey) provides comprehensive insights into On Premise occasion, channel and category opportunities to enable you to build a winning On Premise strategy.
To learn more about consumer perceptions and interactions with the On Premise in 2024, get in touch with Ryan.Winslade@nielseniq.com or download more information about CGA’s OPUS (On Premise User Survey) here.
