Years of inflation at the grocery store has made it harder that ever to convince consumers to pay extra for value-added attributes. How can premium tea navigate such a challenging environment and convince consumers to spend on high-quality tea when they are watching every dollar? In this session, we will look at what the rise in grocery prices has done to consumer mindsets and shopping patterns in the last few years and then describe the strategies that are working in the premium space: Leading with wellness, embracing “Little Treat Culture”, and targeting the luxury segment. Description: The attendees at the expo tend to be selling tea that is higher-quality and they all face a real challenge from consumers very frustrated with inflation and turning to mass brands, private labels, etc. This is true even if the Federal Reserve does bring inflation back down to 2% by the Expo because what consumers are reacting to is not inflation but price levels (it’s not that things are getting more expensive, it is that they have gotten more expensive and the reference point for what things “should cost” remains that of 2019). Of course, it is still possible for value-added categories to succeed and tea basically has three options. The first is wellness, because data indicates where consumers are willing to spend extra their top choice is wellness because it is “investing in themselves” and so makes financial sense even in tough times. The second is “Little Treat Culture” or what in traditional economic terminology is known as the “Lipstick Effect” or the idea that if budgets are stretched, people turn to small, affordable splurges to make themselves feel better. The third is to appeal to consumers whose incomes are high enough they do not really feel the sting of inflation, who are not numerous but who do have high spending power. The idea of this presentation is to lay out the consumer mindset as it currently stands and then take them through the routes where premium tea can succeed, with the idea the attendees will figure out which path makes the most sense for their own brand given its positioning.
You will better understand how consumers:
- currently shop for food and beverage products
- under what circumstances they will pay more for higher-quality teas
- what strategies might work for them specifically to appeal to consumers in this environment
