How can luxury food brands succeed?

Luxury brands are on the rise. According to data platform Statista, the market for luxury goods is expected to grow by an annual growth rate (CAGR 2024-2029) of 9.75%. One step above ‘mass premium’, luxury brands are in the stratosphere – think a bottle of wine that costs €150.

While in the realm of beverage, luxury brands are well established – luxury wine and whiskey, for example, already has its devotees – luxury food brands, according to Ben Black, executive director at investment company Verlinvest, are less prominent.

This could change, he suggested, as there is enormous potential for several premium foods to make it into the big leagues.

What is a luxury brand?

While a ‘mass premium’ brand is a brand with a slightly higher price point and a perception of quality attached – think Lindt in food – a luxury brand is more rarefied. Luxury brands in the beverage space, for example, include whiskey brand Macallan and champagne brand Dom Pérignon.

While a premium product is usually priced at 20-50% above the mass market product, the luxury brand is the stage above this, around 70-100% more. “We look at it through the lens of pricing power,” Black told FoodNavigator.

Private label chocolate

Private label brands have recently seen a significant uptick in popularity amongst consumers. One sector that hasn’t done as well in private label, however, is chocolate​.

This, Circana’s Ananda Roy told us, is because consumers see chocolate as a treat. During a time of economic uncertainty, consumers would rather splash out on premium chocolate on rare occasions than buy more affordable chocolate more frequently.