Can a premiumization strategy help in the time of inflation?

At first glance, promoting premium offerings during a period of inflation seems like a contradiction. When wallets are tight, who’s going to spend more? But what if we stop equating “premium” solely with “higher price” and start viewing it as “greater value”? Once we factor in the rapid growth and increased presence on shelf of private label products, premiumization starts to make more sense—not less.

Premiumization isn’t the only strategic lever available. But in a time when shoppers—especially younger generations—are seeking products that feel indulgent, purposeful, and fun (without breaking the bank), it’s a direction worth exploring.  

However, if you decide to take that road, the true challenge will be at that first moment of truth - at the shelf. Faced with dozens of choices and a price-sensitive mindset, will your premium product stand out? Behavioral research tools like Virtual Shopping, Eye Tracking, , Implicit Timed Response Exercises and Surveys allow brands to see exactly how consumers engage with products in a real-world context—before going to market.  

Rethinking value in the face of private label pressure

Private label brands are no longer the budget-friendly, no-frills options they once were. With multi-tier offerings and more polished brand strategies, private label brands now challenge national brands in both value and quality. This growing competition is putting traditional price gaps under the microscope—and making it harder for branded products to stand out.

That’s why premiumization today is not about slapping on a higher price tag. It’s about building perceived value that consumers can actually feel. That might mean elevating the product formulation, introducing rare ingredients, offering limited-edition versions, or even tapping into sustainability advantages with eco-conscious packaging.

Brands that have the muscle to invest in marketing and brand-building have a distinct edge here. With the right narrative and clear product benefits, they can reclaim value share and even lead category growth. The brands that will survive this inflationary moment are the ones that evolve—not just react.

Balancing act: Premium but accessible

Let’s be clear: successful premiumization isn’t just about climbing the price ladder. It’s about making consumers want to climb it with you. This strategy works best when there’s a genuine improvement in quality or experience (deriving greater perceptions of added value) —and when the product remains attainable.

The sweet spot? Innovations that feel luxurious yet practical. Think skincare that doubles as wellness, snacks with functional benefits, or ready-to-drink coffees that bring café quality to your kitchen. These products offer affordable indulgence and emotional payoff—something consumers crave when everything else feels uncertain.

Retailers also play a crucial role in this equation. They're not just looking for high-margin products—they want innovation that drives traffic, boosts basket size, and keeps shoppers coming back. For brands, this means that premium innovation must tick both consumer and retailer boxes: compelling, differentiated, and profitable.

Category-specific opportunities

Economic downturns don’t hit all categories equally. Some, in fact, thrive. The “lipstick effect” is a perfect example—where consumers cut back on big-ticket items but still treat themselves to small luxuries. Premium chocolate, beauty products, and yes, coffee, continue to perform well in tight times.

Take coffee as an example: what was once an aisle of instant jars is now a layered market of artisanal beans, sleek machines, and nitro cold brews. That transformation wasn’t just about charging more—it was about elevating the entire experience. Brands introduced value cues—aroma, origin stories, barista-style rituals—that made consumers willing to trade-up and spend more.

So before jumping into premiumization, brands must assess: is my category ripe for it? And can I build a narrative that connects with the emotional needs of consumers in this economic moment?

The shelf: Where strategy meets reality

All strategies look good on paper—until they hit the shelf. That’s where the real consumer judgment happens. Faced with dozens of choices and a price-sensitive mindset, will your premium product stand out?

Key questions arise:

• Does your product’s premium angle enhance decision-making at the point of sale?

• What benefits are truly worth paying more for in today’s climate?

• How can you convince shoppers that your brand offers real, differentiated value?

To answer those questions with confidence, testing is critical. Behavioral research tools like Virtual Shopping and Eye Tracking,  allow brands to see exactly how consumers engage with products in a real-world context—before going to market.

At EyeSee, we help brands quantify the performance of new innovations by testing them in realistic, competitive environments that reflect actual shopper behavior. This ensures that bold brand ideas—like product premiumization—are validated and executed in ways that drive in-market impact and retail success.  

In conclusion

Premiumization during inflation isn’t a contradiction—it’s an opportunity. But only if it’s done thoughtfully. Shoppers today expect more: from functionality and sustainability to packaging and storytelling. Brands that deliver more—not just charge more—will earn their place in the cart.

The goal isn’t to out-price your competition. It’s to out-value them.

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