What defines premium in modern eating out?

   VICUSCHKA  (Shutterstock)

VICUSCHKA (Shutterstock)

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One question that I’m consistently asked throughout January each year is which trends I predict will take over the dining and eating out industry in the coming eleven months. Throughout my years in both hospitality and big-brand analysis, forecasting was paramount to stay ahead of the curve in understanding exactly what consumers want. I have worked across several categories in the food and beverage industry, but the funny thing is that regardless whether it was coffee, chocolate bars or drinks that I worked in, the key consumer trends were always the same for over a decade now: health, indulgence and premiumisation.

While health and indulgence are straightforward to define, what constitutes premium in the eyes of consumers has rarely been defined. As Milly Stilinovic, writing for Forbes, explains: “The term premiumization was coined sometime in the nineties to open a new door in the alcohol and beverage market, redefine top shelf offering, and provide a taste of the higher life for consumers.” However, these days, so many brands dub themselves ‘premium’ for so many different reasons that the term’s true meaning has become rather ambiguous. Throughout my time in the industry, it has become clear that, for many, premium is more of a feeling than a particular list of set values.

However, it would follow that today’s mantel of premium would be influenced by these other two trends, and so it is not surprising that consumers seeking premium foods and drinks expect nutritious ingredients that retain the aspect of indulgence without compromising health. Even Mintel’s 2016 report on soft drinks focused mainly on exploring the aspects of healthier, higher price-positioned products with better quality ingredients. Well, those types of premium brands are now mainstream, and so in 2017, agents within the eating and drinking out industry who wish to prosper must harness new aspects of premiumisation.

“When people consider buying premium, they are looking for three things,” International Commercial Director for Moët & Chandon, Bertrand Steip, told Forbes. “The first is brand authenticity and heritage, followed by the embodiment of a luxurious life, and finally the element of experimentation.” I couldn’t agree more with this statement, and it is one that restaurant and bar owners must keep in mind, whether looking to make their premium offerings more accessible or more exclusive.

1. Culinary Merit is in heritage

As anyone who has served customers in a high-end restaurant will tell you, when customers are paying for premium food and drink, they like to know where it has come from. From the farm where the meat in today’s special was sourced to the story behind the chef’s choice of vegetable supplier, authenticity is integral to any premium offering. But to take this to the elite consumer, authenticity must be bolstered by heritage. Whilst new brands and restaurants can thrive on a premium customer base, they must emphasise their heritage – be it in generations of chefs or in roots in a foreign country pertinent to their offering. For longstanding names, heritage is a given, but there is more to this element than labels boasting ‘since 1808’. Heritage is earned not by years, but by merit, so it is key that restaurant and bar owners connect customers with the history of their venue, brand, or products. 

2. Owning the niche

If you are aiming to make it in the mass market, then serving a niche focus can be a write-off, but premiumisation is far from a mainstream affair. To cater to the premium market, an exclusive selling point is paramount. Think “free-from” products, a niche which has exploded in the past few years, where increasingly luxurious products based on all-healthy, organic ingredients out-sell those which simply substitute one ingredient for another. Products with a proprietary recipe are also highly sought-after, as the consumer feels as if they are treating themselves to something unique. Put simply; if the dish can be recreated at home, it’s not premium. If the brand can be purchased in Tesco or other channels of mass distribution, that’s not premium either. Premium brands must poise themselves as limited, exclusive and special editions that only those actively seeking a niche will find.

3. And how would you like that?

There’s a reason why designer clothes brands offer optional name-stamping on their premium items – customisation is key in appealing to customers looking for the next-level offering. Mary Poulakis, owner of Australia-based high end department stores, Harold’s, explains: “More and more people feel confident enough to take what the brand offers and really make it their own. Whether it’s a wide lapel, materials that they enjoy, premiumization through way of customization adds that extra touch of exclusivity and uniqueness sought after by our high end clientele.” This principle also applies in the dining sphere, but rather than adding their initials, consumers aspire to express their personality in dining through the addition of particular ingredients, cooking styles and special touches. Whether it’s substituting bread for a healthier vegetable-based alternative or asking for a meat to be cooked exactly as they like it, consumers make choices not only to enhance their culinary experience, but to express a level of taste, knowledge and style.

4. Less really is more

Once upon a time, it could be said that there were two types of diners – those who go out looking for a big, hearty meal to fill them up, whether it be a roast dinner or a burger and chips; and those who would prefer to savour a smaller dish of exquisite quality. However, the divide is no longer distinct, with more customers willing to compromise on quantity to enjoy truly quality dishes that satisfy the imagination and palate as well as the appetite. Healthy dishes and specialised dishes for specific diets are now a must for any premium restaurant, and must be of exceptional quality. This applies to the beverage industry, too. As Just Drinks explain:

“A growing trend towards moderation and greater health awareness on the part of consumers means a "less, but better" trend will be discernible but brands will have to work harder to persuade consumers that the "better brands" are worth the extra money. Factors such as provenance, tradition and a story they can relate to will be the key factors influencing consumer purchasing decisions.”

5. Storytelling: it’s central to modern premiumisation

Richard Siddle, industry analyst for Just Drinks, claims that, to truly stand out among an already-competitive premium market, brands will need to demonstrate “far more depth to their story”. With more information available to the prospective consumer, buyers and diners are increasingly knowledgeable and will only be won over by brands of substance whose narrative fits in with their expectations. He explains:

“Consumers, particularly younger millennials, want to buy in to products they can relate to and that are relevant to their lives, be it through the story, the traditions, its values and most importantly what the brand stands for.”

This must be achieved through genuine customer engagement both in-house and online, but moreover by provocative, inspiring and relatable backstories to each brand and product. Premium, after all, does not simply happen, it is crafted and honed as any great story must be.