STAMFORD, CONN. – Despite inflationary and other pressures, demand for premium products in grocery fresh perimeter departments continues to surge.

Consultancy Daymon reports strong pull in categories like premium meat, said Andrew Moberly, the company’s senior director for strategic advisory.

Prime beef, for instance, has seen an 11% volume increase as of April 2022 vs the prior year, Moberly said.

“Consumers are limiting their intake of red meat, and as a result are more selective when purchasing it at the store — opting for more premium or high-quality varieties. Additionally, with many consumers continuing to eat at home, they’re looking for an upgraded experience comparable to eating out.”

That behavior, Moberly said, will drive shoppers to continue purchasing these premium meat options as they look for restaurant-quality offerings to enjoy at home.

Inflation, of course, does continue to impact purchasing decisions, with 75% of consumers ranking inflation as the most serious economic problem, according to Daymon. With inflation top of mind for shoppers, Moberly said, consumers are turning to private brands to provide savings while not sacrificing on quality.

“Nearly 70% of consumers say private brands are a better value for their money, marking this purchasing environment as a time to increase private brand trial and loyalty. However, we expect demand for premium perimeter products within private brand to continue, especially with inflation perceptions varying across generations.”

Gen X and millennials in particular, he added, are least concerned with food inflation compared to all other generations, with 37% of those 25–31-year-olds having high hopes for their finances a year from now, compared to 22% of the general population.

An omnichannel perspective

The keys to marketing and merchandising premium products rests in having a strong omnichannel strategy that centers on product attributes and cooking usage, Moberly said.

As 56% of food shoppers say they are willing to pay more for products that fit their lifestyle, retailers must elevate premium product attributes through effective instore signage, along with callouts on product display pages within the digital shelf.

“Consumers are shopping across instore and online channels looking for full meal solutions, making it imperative for retailers to elevate not only their marketing strategies but their merchandising strategies as well,” Moberly said. “For instore, this includes cross-merchandising items such as meat with marinades, seasonings and fresh sides, promoting complete private brand meal solutions.”

For online shoppers, retailers must strategically incorporate complimentary items at the digital shelf, providing an opportunity to cross-promote premium purchases with fresh private brand additions, he said.

Finally, the more retailers use their instore and online platforms inclusive of social media channels to promote recipes, usage tips, and full meal imagery, the further they can induce premium purchases.

Within grocery fresh, prepared foods are coming into focus with year-over-year unit growth of 11% as of June, with heat-and-eat options becoming a strong segment, according to Daymon.

Prepared foods fulfill the growing consumer need for convenience, with nearly 9 in 10 consumers now purchasing freshly prepared foods and almost one-third saying they are purchasing them more regularly, Moberly said.

To support this shift, Daymon is tracking an increase in prepared food quality as consumers are looking for convenient meal options that also have added health and wellness attributes.

“We’re excited to see how retailers enhance prepared food options for prolonged shopper engagement and growth—from including premium restaurant-quality ingredients, from-scratch sauces, and authentic recipes with clean label formulations,” Moberly said. “As shoppers look to customize their prepared food selections to prevent meal boredom, we anticipate cross-merchandised pre-marinated premium meat and vegetarian options with prepared meal sides to continue becoming elevated solutions in the coming months.”