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Archives (2005 to 2008)


	6/4/2009 The Value/Premium Brand Dichotomy: IRI Research Finds Growth at Both Ends of the Spectrum Shoppers are "Sophisticated Splurging" on Premium Brands in Tough Economy CHICAGO, June 4, 2009 - It is far from a surprise that shoppers of all demographics have flocked to value brands as a strategy to save money in the current recession. What is a surprise is that many are also increasing their purchasing of premium brands. The latest IRI Times & Trends Report, "The Value/Premium Dichotomy," reveals that value brands are growing rapidly in terms of dollars, while mid-tier brands lag. Premium brands are also picking up steam. On a unit sales basis, value brands enjoyed more growth in 2009 than 2008, while premium brand sales shrank just over 1 percent and mid-tier brands shrank nearly 3 percent. What's happening here? "Several shopper trends have converged to create this dichotomy," says President of IRI Consulting and Innovation Thom Blischok. "The most obvious trend is the move to trade down. Shoppers have moved away from their traditional brands to value brands, including both retailers' private brands as well as economy brands from national brand manufacturers." But, shoppers are also focused on premium brands, through what IRI has dubbed "sophisticated splurging." Shoppers are holding onto the premium brands they crave but are purchasing them at value stores. Premium brand purchases have grown the most at dollar stores, supercenters and Walmart, while shrinking at grocery, drug, mass merchandise and club stores. In addition, retailers have dramatically increased the sophistication of their private brand strategies. Many now offer high-end private brands that offer a premium experience at a lower cost versus premium national brands. Shoppers' concerns about health and wellness are also driving the spike in premium brand sales. For example, while bottled water unit sales decreased 3 percent during the last year, premium bottled water unit sales jumped 11 percent, driven by innovations, such as Glaceau's vitaminwater. Similarly, yogurt sales were essentially flat during the last year, while premium yogurt sales grew 34 percent. One would think "doing well" shoppers, which are single member households earning more than $35,000 annually and two or more member households earning $55,000, would be driving premium brand growth. In fact, the opposite is true. Those "living comfortably" increased premium brand spending while the "doing well" segment actually dropped by 1.4 percent. Shoppers have swapped dining out for maintaining at least a few indulgences. And, they haven't lost their sweet tooth. Of the top 10 items where brand preference beats out price as the most important decision influencer, chocolate candy is number one, and cookies and ice cream/sherbet also make the list. "These findings remind us that shoppers often act in unpredictable ways, and that the results of one action, such as dining out less, often has repercussions in other CPG segments," adds Blischok. "It underscores the need for CPG manufacturers and retailers to build and maintain a highly-detailed understanding of shopper attitudes and behaviors." About the Report The IRI Times & Trends Report, "The Value/Premium Dichotomy: Growth at Both Ends of the Spectrum," is available from IRI, the leading global provider of consumer, shopper, and retail market intelligence and insights for the consumer packaged goods (CPG), retail, and healthcare industries. The findings of this report were compiled based on the IRI Consumer Network™ and IRI AttitudeLink™. To download the report, visit http://us.infores.com/page/news/times_and_trends. About Information Resources, Inc. IRI is the world's leading provider of consumer, shopper, and retail market intelligence and insights supporting 95 percent of the FORTUNE Global 500 consumer packaged goods (CPG), retail and healthcare companies. Only IRI offers the unique combination of integrated market information, automated and predictive analytics, innovative enabling technologies, and domain expertise. With IRI, leading retailers and manufacturers are able to quickly discover breakthrough insights driving smarter decisions and actions across the enterprise for breakthrough results. Companies around the world depend on IRI for improved productivity, stronger brands, and dramatic revenue growth. For more information, visit http://us.infores.com. # # # IRI CONTACTS: John McIndoe E-mail: john.mcindoe@infores.com Phone: (312) 474-3862 Fax: (312) 726-1091 Shelley Hughes E-mail: shelley.hughes@infores.com Phone: (312) 474-3675 Fax: (312) 726-1091

Archives (2005 to 2008)

The Value/Premium Brand Dichotomy: IRI Research Finds Growth at Both Ends of the Spectrum