What makes a brand premium?

Premiumisation has been one of the most significant On Premise trends of recent years. But what exactly makes a brand feel special to consumers? CGA by NIQ’s BrandTrack solution reveals the key factors and the levers that suppliers should pull to gain share in the ultra-competitive premium space.

For most consumers, taste is the all-important thing. Two in five drinkers of spirits (39%) and beer (40%), and a third of cocktail consumers (33%) say a high-quality taste is the key way to decide if a brand is premium. Brand reputation and heritage are important too—especially for beer (23%) and spirits drinkers (22%). In addition, roughly one in eight consumers are influenced by factors like glassware, bottle design and endorsements by staff. 


Interestingly, price is not always a signifier of premium. Only 11% of beer and cocktail consumers say cost is an important factor in their recognition of premium. This also means that many consumers are not put off by higher prices, and are happy to pay more for a drink if they know they will get a high-quality and well-served product in return. 


In a similar way, consumers who want good value are not always seeking low prices. Roughly half say a drink is value for money if it is good quality (53%) or worth the price that was paid (51%). Factors like discounts (23%) and cheap options (15%) are much less likely to be linked to value in consumers’ minds. 


BrandTrack reveals consumers perceive some categories to be better value for money than others. More than two in five (42%) think beer offers good or very good value for money—notably higher than drinks like wine (32%), cider (31%), spirits (29%) and cocktails (26%). Some people feel the longer serves like beer give them more for their money, which adds to the pressure on shorter serves like shots or spirits-and-mixers. 


The BrandTrack survey also emphasises the vital importance of delivering consistently high value—and shows what happens when people don’t receive it. More than a quarter (28%) of consumers say they would drink out less frequently if they felt their favourite drink wasn’t giving them good value for money, while a fifth (20%) would order fewer drinks when they go out. Nearly as many (19%) say they would switch to other categories of drink, like away from spirits towards beer. 


Violetta Njunina, CGA by NIQ client director, said: “Consumers’ movement towards premium drinks shows no sign of slowing—and with inflation and cost pressures easing, we can expect to see even more people paying extra for quality in the second half of 2024. However, they want to be absolutely certain they are getting good value for the money they spend—and that means brands have to meet or exceed expectations every time. It’s never been more important to know the factors behind guests’ decision-making processes, and our BrandTrack analysis is the perfect starting point for precise and effective brand targeting.” 


To learn more about CGA by NIQ’s BrandTrack service, click here and contact Violetta Njunina at here.

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