2 GLOBAL PREMIUIMIZATION REPORT
PREMIUM PRODUCTS ARE EXPERIENCING STRONG SALES GROWTH AROUND THE WORLD
AROUND THE WORLD• Thepremiumsegmentisexperiencingstronggrowth—outpacingtotalcategorysalesinmanymarkets—
withstrongpotentialforcontinuedgrowthasconsumerbuyingpowerandspendingrisearoundtheworld.
• Consumersaren’tjusttradinguponbig-ticketpurchases;they’realsogoingpremiumoneverydayitems.
Thepersonal-care,beauty,home-careandvariousfoodandbeveragecategoriesareexperiencingstrong
salesgrowthinmanymarketsaroundtheworld.
• Themostcommonlycitedfeaturesofpremiumproductsareexceptionalquality(citedby54%)and
superiorperformance(46%).Themostsuccessfulpremiumproductsarethosethatperformanimportant
jobforwhichpreviouslyavailablesolutionswereunsatisfactoryornonexistent.
• Productswithenvironmentalorsocialbenefitshavepremiumpotential.Roughlyfourin10global
respondentsthey’reverywillingtopayapremiumforproductsmadewithorganicorall-naturalingredients
(42%)orenvironmentallyfriendlyorsustainablematerials(39%),and31%saythey’reverywillingtopaya
premiumforsociallyresponsibleproducts.
• Consumersbuypremiumproductsforbothrationalandemotionalreasons,butthelatterresonatemore
stronglyinemergingmarketswhereaspirationsforstatusandaccomplishmentarehigh.
Aroundtheworld,consumersarelookingforatasteofthegoodlife.And
it’snotjustthosewhoarewealthy.Salesofproductsinthe“premium”
tier—whichNielsendefinesasgoodsthatcostatleast20%morethan
theaveragepriceforthecategory—aregrowingatarapidpace.Infact,
thegrowthofthepremiumsectorinmanymarketsaroundtheworldis
outpacingtotalgrowthformanycategoriesoffast-movingconsumer
goods(FMCG).Between2012and2014,thepremiumsegmentgrew
21%inSoutheastAsia,morethandoubletherateofthemainstream
andvaluetiers(8%and10%,respectively).Premiumproductsgrew23%
overthesameperiodinChina.InLatinAmerica,growthinthepremium
segmentoutpacedtotalFMCGgrowthineverymarketexceptMexico
andVenezuelaoverthe12monthsendedJune2016.
3Copyright © 2016 The Nielsen Company
Factorsonboththesupplyanddemandsidesaredrivingthegrowth
ofthepremiumsegment.First,manyconsumershavegreaterbuying
powerthaneverbefore.Consumerpurchasingpowerisgrowingat7%
and9%peryearinChina,Indiaandsub-SaharanAfrica,accordingto
datafromtheWorldBank.TheOrganizationforEconomicCooperation
andDevelopmentpredictstheglobalmiddleclasswillincreasefrom
1.8billionin2009to4.9billionby2030,withthebulkofthisgrowth
comingfromemergingmarkets,particularlyAsia.Withmoremoney
intheirpockets,manyconsumersaretradingupforproductsand
servicestheycouldn’tpreviouslyafford.Inaddition,globalization—
whichhasgivenconsumersaccesstoabroaderassortmentof
products—andanincreasedfocusonthequalityofproductsandthe
shoppingexperienceinmanymarketshavefurtherfueledconsumers’
appetiteforpremiumproducts.
“Withincreasingaffluence,consumersarecravingproductsthatoffer
atotalexperience,saidLianaLubel,seniorvicepresident,Nielsen
InnovationPractice.”Beyondbasic-needproducts,manyconsumers
alsoarebuyingbasedonhowproductsmakethemfeel,andpremium
productstapdirectlyintoadesireforproductsthatprovidespecialized,
enhancedorexclusivebenefits.Butdeliveringontheirexpectations
oftheexperienceremainscritical,andthemostsuccessfulpremium
productsarethosethatperformanimportantjobforwhichpreviously
availablesolutionswereunsatisfactoryornonexistent.”
Premiumizationisn’tjustadevelopingmarkettrend.IntheU.S.,
premiumproductsaccountforroughlyone-quarterofdollarsalesin
thepersonal-andhome-carecategories(26%and23%,respectively),
growthinthepremiumsegmentoutpacedtotalcategorygrowthfor
personalcare(8%versus2%)andfood(8%versus3%)intheyear
endedApril2,2016.ThestoryissimilarinseveralEuropeanmarkets.
Between2013and2015,premiumsegmentgrowthoutpacedtotal
growthforseveralcategoriesanalyzed,includingshampooandsweet
biscuitsintheU.K.,Germany,FranceandItaly;softdrinksinGermany
andtheU.K.;andlaundryinFrance.
Theavailabilityofnew,innovativebrandsisalsofuelinggrowthin
thepremiumsegment,asfreshofferingscanbringexcitementand
increasedmarketingspendtoacategory.Thepremiumsegmenthas
beenabrightspotinaverychallengingretailenvironment,andbrands
areconsciouslyinnovatingtocapitalizeonthetrend.Forexample,
Nielsensalestrendsshowthatbetween2012and2014,premium
productsaccountedforalmost20%ofallnew-productdevelopment
inSoutheastAsia—andasmuchas40%incertaincategories(facial
cleanser,moisturizerandinstantnoodles).
ABOUT THE STUDY
Retailsalesdataissourcedfrom
Nielsen’sRetailMeasurement
Services,whichcapturessalesand
pricedatafrommajorretailchains.
Specificcountriesandtimeperiods
fromEurope,LatinAmerica,Asia-
PacificandNorthAmericaare
sourcedthroughoutthereport.
Surveyfindingsarebasedonmore
than30,000respondentswithonline
accessin63countries.Whilean
onlinesurveymethodologyallowsfor
tremendousscaleandglobalreach,it
providesaperspectiveonthehabits
ofonlyexistinginternetusers,not
totalpopulations.Indeveloping
marketswhereonlinepenetrationis
stillgrowing,respondentsmaybe
youngerandmoreaffluentthanthe
generalpopulationofthatcountry.
Inaddition,surveyresponsesare
basedonclaimedbehavior,rather
thanactualmetereddata.Cultural
differencesinreportingsentimentare
likelyfactorsintheoutlookacross
countries.Thereportedresultsdonot
attempttocontrolorcorrectforthese
differences;therefore,cautionshould
beexercisedwhencomparingacross
countriesandregions,particularly
acrossregionalboundaries.
4 GLOBAL PREMIUIMIZATION REPORT
Whilethepremiumizationtrendisgoingstrong,someofthebig-player
manufacturershavestruggledtokeeppacewithsmallerplayersacross
allpricetiers.Forexample,intheU.S.,the25largestfoodandbeverage
companiesdroveonly3%ofthetotalcategorygrowthfrom2011to2015,
whilecompaniesbelowthetop100drovenearlyhalf(49%).Whilethese
numbersindicateanunderlyingissuewithallnewproductdevelopment,
there’smoreatstakewithpremiumproductsbecauseoftheirhigher
revenuepotential.
“Premiumperceptionsarenotnecessarilydrivenbyastronglegacy
brand,andexistingbrandequitiescansometimesbeatoddswithshifting
perceptions,”saidLubel.“Asmallercompanybuildsbrandandproduct
perceptionssimultaneously,soitcanmoreeasilyadapttoconsumer
demand.Ontheotherhand,anestablishedbrand’simagemaybe
inconsistentwiththeneedsofanewerlaunch,andreconcilingthese
canbeadifficulttask;awell-knownmass-marketbrandmaystruggleto
establishitsofferingaspremium.Nonetheless,hugeopportunitiesremain
forestablishedbrandsinthepremiumspace,especiallywhenthereis
sizeablegapbetweenmass-marketofferingsandtheexistingpremiumtier.
Byleveragingtheirinfrastructureandretailpartnerships,largecompanies
areuniquelypositionedtoreachalargeconsumerbasewithlower-tier
premiumofferings.”
Thisstudyidentifiestheattributesconsumersarelookingforinpremium
productofferings,andrevealstheunderlyingsentimentbehindthe
reasonsforpurchase.Weexplorewhat“premium”meanstoconsumers,
andweidentifythecategoriesforwhichthey’remostwillingtopaya
higherprice.Inaddition,becausewillingnesstopayapremiumislargely
shapedbyhowconsumersfeelabouttheirfinancialsituation,welook
atperceptionsofspendingcapacity.Finally,weofferbestpracticesto
considerwhencompetinginthepremiumproductspace.
SMALL MANUFACTURERS (TOP 101 AND BELOW)
MID-TIER MANUFACTURERS (TOP 26-100)
RETAILERS (VIA PRIVATE LABEL)
LARGE MANUFACTURERS (TOP 25)49%
25%
23%
3%
BIG U.S. MANUFACTURERS STRUGGLE TO KEEP PACE WITH SMALLER PLAYERSSHARE OF CATEGORY GROWTH FOR U.S. FOOD & BEVERAGE MANUFACTURERS (2015)
Source:Nielsen2016BreakthroughInnovationReport,U.S.Edition
5Copyright © 2016 The Nielsen Company
SPENDING FREELY OR TIGHTENING PURSE STRINGS? SENTIMENT IS NOT NECESSARILY INCOME-DEPENDENTNearlyasimportantasconsumers’incomeishowtheyfeelabout
theirabilitytospend.Whenitcomestothosewhosaythey’redoing
wellfinanciallyandthosewhoarefeelingincreasinglycash-crunched,
responseratesvarybetweenemerging/developinganddeveloped
markets.
Inmuchoftheemerginganddevelopingworld,themiddle-class
populationisincreasing,soit’snosurprisethatmorerespondentsin
thesemarketsthanindevelopedmarketssaythey’vemadefinancial
gainsinthepastfiveyears.Morethansevenin10IndianandChinese
respondents(78%and72%,respectively)saythey’refinanciallybetter
offthantheywerefiveyearsago.Thissentimentisechoedbymorethan
halfofrespondentsineverySoutheastAsiancountryinthestudy,with
thehighestratesinVietnam(82%)andIndonesia(74%).Likewise,more
thanhalfofrespondentsinAfrican/MiddleEasternmarkets(55%)and
halfinLatinAmericanmarkets(50%)saythey’reinabetterfinancial
situation.
Indevelopedmarkets,perceivedfinancialgainshavebeenmoremodest.
RespondentsinNorthAmericaarethemostpositive,drivenprimarily
bythoseintheU.S.Forty-sixpercentofrespondentsintheU.S.say
they’refinanciallybetterofftodaythanfiveyearsago(comparedwith
36%inCanada).IntheadvancedPacificmarkets(AustraliaandNew
Zealand),sentimentissplitintothirds:aboutone-thirdofrespondents
(32%)believethey’rebetterofftoday,whileone-third(34%)thinkthey’re
worseoff,andanotherone-third(34%)saytheirfinancialsituationis
nodifferentthanitwasfiveyearsago.ThestoryissimilarinWestern
Europe:30%saythey’rebetteroff,and34%saythey’reworseoff.
RespondentsinCentralandEasternEuropearemorepositiveabout
theirfinancialsituationthantheirneighborstothewest.Fortypercent
ofCentralandEasternEuropeanrespondentssaythey’rebetterofftoday
thantheywerefiveyearsago.
6 GLOBAL PREMIUIMIZATION REPORT
PERCEIVED FINANCIAL GAINS ARE HIGHEST IN DEVELOPING MARKETS
ASIA-PACIFIC SUBSEGMENTS EUROPE SUBSEGMENTS
HOW RESPONDENTS FEEL ABOUT THEIR FINANCIAL SITUATION TODAY COMPARED WITH FIVE YEARS AGO
55%
25%
21%
66%
21%
12%
34%
31%
35%
55%
21%
23%
50%
21%
29%
45%
33%
22%
GLOBAL ASIA-PACIFIC
EUROPE AFRICA/MIDDLE
EAST
LATIN AMERICA
NORTH AMERICA
BETTER OFF
ABOUT THE SAME
WORSE OFF
Note:Percentagesmaynotequal100%duetorounding
Source:TheNielsenGlobalPremiumizationSurvey,Q12016
*Seepage24forlistingofcountriesincludedintheregionsandsubregions
CENTRAL AND EASTERN
EUROPE
WESTERN EUROPE
34%
36%
30%40%
36%
23%
ADVANCED PACIFIC
MARKETS
SOUTHEAST ASIA
ADVANCED ASIAN
MARKETS
CHINA INDIA
32% 70% 23% 72% 78%
34%
17%
40%
20% 16%34%13%
36%
8% 6%
7Copyright © 2016 The Nielsen Company
Perceivedfinancialimprovementsdon’talwaystranslatetoanabilityto
spend.Globally,only14%ofrespondentssaythey’reabletospendfreely.
Another52%saythey’reabletobuysomethingsjustbecausetheywant
them,while35%claimonlyenoughmoneytocoverthebasics(foodand
shelter).
Moreimportantly,spendingconsiderationsarenotnecessarilyconnected
toincomelevels.Forexample,inIndia,wherethegrossnationalincome
percapitabasedonpurchasingpowerparity1isonlyone-tenthofthelevel
intheU.S.,morethanone-thirdofrespondents(36%)saythey’reableto
spendfreely,comparedwithonly17%intheU.S.InseveralSoutheastAsian
markets,too,onlinerespondentsaremorelikelythantheglobalaverageto
saythey’reabletospendfreely;examplesincludeVietnam(23%),Thailand
(20%)andIndonesia(19%).InChina,spendingsentimentisnotably
different.Fewerthanonein10Chineserespondentssaythey’reableto
spendfreely(8%),but72%saythey’relivingcomfortably;onlyone-fifthof
onlineChineserespondents(20%)saytheycanonlyaffordbasics.
Incontrast,respondentsinEuropeandLatinAmerica—regionshit
particularlyhardby“GreatRecession”—feelmorefinanciallystrapped.
Fifty-eightpercentofrespondentsinCentralandEasternEuropeand46%
inWesternEuropesaytheycanonlyaffordthebasics,butsentimentvaries
withintheseregions.InWesternEurope,whilethemajorityofItalian(66%),
Finnish(60%)andFrench(57%)respondentssaytheycanonlyaffordthe
basics,only29%ofNorwegianandDanishrespondentssaythesame.The
patternissimilarinCentralandEasternEurope:78%ofSerbianand75%
ofUkrainianandGreekrespondentssaytheycanonlyaffordthebasics,
butagreementismuchlowerinTurkey(37%)andIsrael(35%).Fifty-four
percentofLatinAmericanrespondentssaytheycanonlyaffordthebasics,
withthehighestpercentagesinVenezuela(71%)andArgentina(58%),two
countriescurrentlyineconomiccrisis.
InAfrica/MiddleEast,spendingsentimentisdividedalonggeographiclines.
OnlinerespondentsintheMiddleEasterncountriesaresignificantlymore
likelythanthoseinAfricatosaythey’relivingcomfortbaly.Morethanhalfof
respondentsinSouthAfrica(55%),Morocco(53%)andEgypt(51%)saythey
canonlyaffordthebasics,butfewerthanfourin10respondentsinSaudi
Arabia(38%),Pakistan(36%)andUnitedArabEmirates(31%)saythesame.
Differencesalsoshowupamongthegenerations.Thefinancialstruggles
ofMillennialsarewell-documented.Yetacrosstheworldwidestudy,the
Millennialgeneration(ages21–34)istheagesegmentmostlikelytosayit’s
abletospendfreely(18%)andtheleastlikelytosayit’sonlyabletoafford
thebasics(29%).ThisholdstrueineveryregionexceptEurope,where
SilentGeneration(ages65+)respondentsaretheleastlikelytosaytheycan
onlyaffordthebasics.
1Source:TheWorldBank.GNIpercapitaisdollarvalueofacountry’sfinalincomeinayear,dividedbyitspopulation.Itreflectstheaverageincomeofacountry’scitizens.PPPGNIisgrossnationalincomeconvertedtointernationaldollarsusingpurchasingpowerparityrates;itisusedtoallowcomparabilityacrosscountries.
GLOBALLY, ONLY
14% OF RESPONDENTS SAY THEY’RE ABLE TO SPEND FREELY.
8 GLOBAL PREMIUIMIZATION REPORT
6%
40% 54%
16%
56%
28%
9%
40% 51%
17%
59%
24% 14%
52%
35%
13%
41% 46%
GLOBAL ASIA-PACIFIC EUROPE
LATIN AMERICA
ADVANCED PACIFIC MARKETS
CHINA INDIA
SOUTHEAST ASIA ADVANCED ASIAN MARKETS
CENTRAL AND EASTERN EUROPE
WESTERN EUROPE
NORTH AMERICAAFRICA/MIDDLE EAST
9%
57%
35% 18%
49%
33%
9%
45% 47%
8%
72%
20%
36%
50%
14%
ASIA-PACIFIC SUBSEGMENTS EUROPE SUBSEGMENTS
6% 37%
6%
58%
11%
42% 46%
MUCH OF THE WORLD HAS SOME DEGREE OF DISPOSABLE INCOME
PERCEIVED FINANCIAL SPENDING ABILITY TODAY
Note:Percentagesmaynotequal100%duetorounding
Source:TheNielsenGlobalPremiumizationSurvey,Q12016
*Seepage24forlistingofcountriesincludedintheregionsandsubregions
I’M ABLE TO SPEND FREELY
I LIVE COMFORTABLYAND AM ABLE TO BUYSOME THINGS JUSTBECAUSE I WANT THEM
I ONLY HAVE ENOUGHMONEY FOR FOOD,SHELTER AND BASICS
9Copyright © 2016 The Nielsen Company
CONSUMERS DEFINE PREMIUM BY MORE THAN PRICEWithmanyconsumerssayingtheyhaveatleastsomediscretionary
income,thepremiumsegmentisrifewithopportunity.Andwhen
itcomestopurchasingpremiumproducts,forthevastmajorityof
respondents,it’snotaboutthehigher-than-averagepricetag.Infact,
lessthanone-thirdofglobalrespondents(31%)saytheyconsider
aproducttobepremiumbecauseit’sexpensive—aclearwarning
tocompanieswhopushuppriceswithoutprovidingaveryclear
valuepropositiontosupportthechange.Rather,respondentsdefine
premiumproductsbyexceptionalqualityandperformance.Fifty-
fourpercentofglobalrespondentssayapremiumproductismade
withhigh-qualitymaterialsoringredients.Thisisthemostcommon
responseineveryregionandnearlyeverycountryinthesurvey.In
addition,46%ofglobalrespondentssayapremiumproductisdefined
bysuperiorfunctionorperformance.
Nearlyfourin10globalrespondentssaypremiumproductsare
definedbysuperiordesignorstyle(38%)orbyawell-knownbrand
name(38%),buttheseattributesaremoreimportantinsomemarkets
thanothers.Superiorstyleismorecommonlycitedinemerging
markets,includingVenezuela(50%),Vietnam(49%),China(47%),
Egypt(45%)andafewCentralandEasternEuropeanmarkets(Croatia,
46%;Serbia,45%;andTurkey,43%).Atrustedbrandnamealsois
morecommonlycitedinAsiaandinemergingmarkets,including
Vietnam(61%),thePhilippines(59%),SouthAfrica(57%),Malaysia
(51%),Estonia(50%)andKazakhstan(50%).
“Connectiontoabrand’svaluesremainsparticularlyimportantin
emergingmarkets,forbothpracticalandemotionalreasons,”said
Lubel.“Asconsumersmoveuptheeconomicladder,they’reattracted
toaspirationalbrandsthatsignalthey’veachievedacertainlevelof
success.Nonetheless,formany,disposableincomesremainlimited,
andfortheseconsumers,trustedbrandsprovideanassuranceof
quality,minimizingtheriskofwastingmoneyonaproductthat
doesn’tfulfillexpectations.”
10 GLOBAL PREMIUIMIZATION REPORT
Whileahighpricetagfallsrelativelylowonthelistof
definingfeaturesforpremiumproductsglobally(eighthout
of11featuresintermsofthepercentagewhoselectedeach
attribute),itissignificantlymoreimportantinEurope,cited
by45%ofrespondentsinCentralandEasternEuropeand
33%inWesternEurope.Infact,thenotionthataproductis
expensivetopsthelistofmostcommonlycitedpremium-
productattributesinRussia(63%),Ukraine(tiedwith
qualitymaterialsat62%)andFrance(56%),andit’ssecond
inSwitzerland(43%),Germany(41%),Austria(39%)and
Belgium(37%).Sentimentdoesvarywithintheregion,
however.InmanyotherEuropeanmarkets,includingItaly
(15%),Bulgaria(12%)andFinland(9%),thepercentageof
respondentswhosayapremiumproductisdefinedbycost
iswellbelowtheglobalaverage.
Source:TheNielsenGlobalPremiumizationSurvey,Q12016
IT’S MADE WITH HIGH-QUALITY MATERIALS
OR INGREDIENTS
IT OFFERS SUPERIOR FUNCTION OR
PERFORMANCE
IT HAS SUPERIOR STYLE OR DESIGN
IT’S FROM A WELL-KNOWN OR TRUSTED
BRAND
IT PROVIDES SUPERIOR CUSTOMER
EXPERIENCE
IT OFFERS OR DOES SOMETHING NO OTHER
PRODUCT PROVIDES
IT’S FROM A LOCATION KNOWN FOR SUPERIOR
QUALITY
IT’S EXPENSIVE
IT’S HANDCRAFTED OR MADE USING
ARTISANAL METHODS
IT’S ONLY AVAILABLE TO PEOPLE OF A CERTAIN
STATUS/EXCLUSIVITY
IT’S HARD TO FIND/SCARCE
54%
46%
38%
38%
37%
37%
33%
31%
29%
22%
21%
PREMIUM PERCEPTIONS ARE ABOUT MORE THAN PRICE
PERCENTAGE WHO SAY ATTRITUBE IS WHAT MAKES A PRODUCT “PREMIUM”
GLOBAL
11Copyright © 2016 The Nielsen Company
PERCENTAGE WHO SAY ATTRIBUTE IS WHAT MAKES A PRODUCT “PREMIUM”
MILLENNIALS VS. BOOMERS: PREMIUM PERCEPTIONS RANK SIMILARLY, BUT SENTIMENT ABOUT QUALITY AND EXCLUSIVITY VARIES
MILLENNIALS(21-34)
BOOMERS(50-64)
Source:TheNielsenGlobalPremiumizationSurvey,Q12016
Thedefiningfeaturesofpremiumproductsareremarkablysimilaramong
respondentsofallages.High-qualitymaterialsoringredientsarethe
mostcommonlyselectedfeaturesforeverygeneration,thoughBoomers
(ages50–64)andSilentGenerationrespondentsaremorelikelytocite
thisfeature(69%and61%,respectively)thanMillennialandGeneration
Z(ages20andunder)respondents(50%and45%,respectively).Younger
respondentsaremorelikelytocitesuperiorstyleordesignandsuperior
customerservice.
50%
45%
40%
39%
39%
37%
33%
31%
29%
24%
24%
61%
47%
31%
34%
32%
38%
33%
31%
31%
15%
18%
IT'S MADE WITH HIGH-QUALITY MATERIALS OR INGREDIENTS
IT OFFERS SUPERIOR FUNCTIONOR PERFORMANCE
IT PROVIDES SUPERIORCUSTOMER EXPERIENCE
IT'S FROM A WELL-KNOWN ORTRUSTED BRAND
IT HAS SUPERIORSTYLE OR DESIGN
IT OFFERS OR DOES SOMETHING NOOTHER PRODUCT PROVIDES
IT'S FROM A LOCATION KNOWNFOR SUPERIOR QUALITY
IT'S EXPENSIVE
IT'S HANDCRAFTED OR MADE USINGARTISANAL METHODS
IT'S HARD TO FIND/SCARCE
IT'S ONLY AVAILABLE TO PEOPLE OF ACERTAIN STATUS/EXCLUSIVITY
12 GLOBAL PREMIUIMIZATION REPORT
CATEGORICAL IMPERATIVE: UPGRADABLE GOODS WITH PREMIUM POTENTIALThecategorieswithpremiumpotentialareasdiverseasanyretailstore
shelf,butthereisneverthelessacommonthread:Forfast-moving
consumergoods,everydayconsumablesrisetothetopofthelistof
categoriesforwhichglobalrespondentsmostoftensaythey’rewillingto
tradeup.
Whileelectronicsandclothing/shoestopthelist(citedby37%and
36%,respectively),respondentsinmostregionsalsoarewillingto
considertradingupforbettermeatorseafood.Infact,thiscategory
iscitedmostoftenindevelopedmarkets,andit’samongthetopfive
categoriesforwhichrespondentswillconsidertradingupinSoutheast
Asia,LatinAmericaandAfrica/MiddleEast.Inaddition,threein10global
respondents(30%)saythey’llconsiderpayingmorefordairyproducts.
AnanalysisofsalesdataintheU.S.showsconsumersarebackingupthis
sentimentwiththeirwallets.Between2014and2016,premiummilksales
grew52%,drivenbythesaleofmilkalternatives,suchasalmondmilk.In
fact,salesofalmondmilkgrew250%between2010and2015,whilethe
totalmilkmarketshrankbymorethan$1billion.
“Inmanycases,successfulinnovationresultsfromreimaginingtraditional
categorydefinitions,”saidLubel.“Forexample,thedairycategoryin
theU.S.wasstagnantbut,byredefiningthecategorytoincludedairy
alternativessuchasalmondmilk,brandswereabletooffermorepremium
products,andthereforebringnewconsumersintothecategoryand
reengagelapsedconsumers.”
Personal-careandbeautycategoriesalsohavestrongupgradepotential,
andinnovationcanplayanimportantpartinfulfillingunsatisfiedneeds.
Morethanaquarterofglobalrespondentssaythey’llconsiderbuying
premiumhair-care(27%),body-care(26%)andoral-care(26%)products,
andananalysisofsalesdatainseveralmarketsaffirmsthepotential.
Indeed,thepremiumsegmentaccountsforroughlyaquarterofdollar
salesinthepersonalcategoryintheU.S.andSoutheastAsia(26%and
23%,respectively),anditsshareisevenhigherinsomesubcategories.In
theU.S.,fortheyearendedApril2,2016,morethanhalfofdollarsalesin
theshaving-needscategory(52%)andnearlyone-thirdintoothpaste(32%)
13Copyright © 2016 The Nielsen Company
werefrompremium.InSoutheastAsia,premiumaccountedfor55%of
facemoisturizer,39%offacecleanserand36%oftoothpastesales,and
salesinallofthesecategoriesgrewbymorethandoubledigits(24%,
24%and18%,respectively)between2012and2014.Shampooisanother
brightspotforpremiumproducts.Thepremiumsegmentaccounted
for31%ofshampoosalesinSoutheastAsia;13%intheU.K.,Germany,
FranceandItalycombined;and10%intheU.S.Andthepremium
shampoosegmentgrewbydoubledigitsintheU.S.(42%overtheyear
endedApril2016)andSoutheastAsia(14%from2012to2014).Inthe
fourEuropeanmarketscombined,premiumshampoosalesgrew9%
from2014to2015.
Outsidethesecategories,however,willingnesstoconsiderapremium
offeringvarieswidelybymarket,duetoculturaltastesandpreferences.
InChina,cosmeticsaresecondonthelistofcategoriesforwhich
respondentsaremostlikelytoconsiderapremiumproduct.InIndia,
fruitjuiceandriceorgrainsaresecondandthird,respectively,onthe
listofcategoriesforwhichconsumerswillconsidertradingup.In
SoutheastAsia,vitaminsareamongthetopthreepremium-potential
categories;thisistheonlyregioninwhichvitaminsareamongthetop
fivecategories.
RespondentsinthePacificandEuropesaythey’rewillingtopaymorefor
abettercupofcoffeeortea;inbothregions,thisisamongthetopfive
categoriesforwhichconsumerssaythey’rewillingtoconsiderpayinga
premium,citedby28%and27%ofrespondents,respectively.Justover
one-fifthofNorthAmericanrespondentssaythey’llconsiderbuying
premiumcoffeeortea(21%),andananalysisofsalesdataintheU.S.
showspremiumliquidcoffeeandteaaregrowingatatremendousrate.
Salesofliquidcoffeegrew203%,whilerefrigeratedandnon-refrigerated
liquidteagrew129%and116%,respectively,between2014and2016.
InNorthAmerica,consumerswantthebestfortheirpreciouspets,and
anotablepercentagesaythey’llconsiderpayingmoretogetit.One-fifth
ofrespondentsintheregionsaythey’llconsiderbuyingpremiumpet
food,eightpercentagepointsabovetheglobalaverage.Salesdatashows
thatU.S.petownersareputtingtheirmoneywheretheirmouthsare.
Between2012and2015,salesofsuper-premiumdogfoodbrandsgrew
atacompoundannualgrowthrateofover9%.
“It’snotjustbig-ticketitemsforwhichconsumersaretradingup,”said
Lubel.“Manyarelookingforeverydayitemsthatperformbetterorfulfill
theiremotionalneedsorsocialaspirationsatapricethatdoesn’tbreak
thebank.Thisisaripeopportunityspaceformainstreambrandsto
providepremiumproductsthatarestillaffordablecomparedtohigher-
tierpremiumservicesandofferings.”
14 GLOBAL PREMIUIMIZATION REPORT
SOUTHEAST ASIA
PERSONAL CARE BEVERAGE HOME CARE FOOD
22%
23%
10%
3%
34%
9%
11%
20%
Source:Nielsenretailmeasurementsalesdata,2014-2015
CATEGORIES WITH POWERFUL PREMIUM PRODUCT POTENTIAL
PREMIUM’S SHARE OF CATEGORY SALES AND TWO-YEAR* GROWTH RATE FOR SELECTED MARKETS
PREMIUM SHARE OF CATEGORY SALES PREMIUM SALES GROWTH
UNITED STATES
PERSONAL CARE
8%
26%FOOD
8%
13%BEVERAGE
7%
9%HOME CARE
2%
23%
Source:Nielsenretailmeasurementsalesdata,2014-2015
EUROPE
SHAMPOO SOFT DRINKS LAUNDRY SWEET BISCUITS
9%
13%
4%
20%
2%
26%
7%
11%
Source:Nielsenretailmeasurementsalesdata,2014-2015
Note:Seepage25forlistingofcountriesandcategoriesincludedintheanalyses*InEurope,categorysalesandgrowthrateisbasedononeyear.
15Copyright © 2016 The Nielsen Company
FEEL-GOOD GOODS: EMOTIONAL DRIVERS RESONATE STRONGLY IN EMERGING MARKETSConsumersbuypremiumproductsforbothrationaland
emotionalreasons,butthelatterresonatemorestronglyin
emergingmarketsthandevelopedones.
Fifty-twopercentofglobalrespondentssomewhatorstrongly
agreethatbuyingpremiumproductsmakesthemfeelgood,
withthehighestagreementinIndia(78%),China(66%),Africa/
MiddleEast(57%)andSoutheastAsia(53%).Agreementis
significantlylowerinWesternEurope(28%),thePacific(34%),
LatinAmerica(37%),theadvancedAsianmarkets(38%)
andNorthAmerica(43%).Asimilarpercentageofglobal
respondents(50%)saybuyingpremiumproductsmakesthem
feelconfident.Onceagain,agreementishighestinIndia(76%),
China(62%),SoutheastAsia(58%)andAfrica/MiddleEast
(55%).
Statusalsoisamoreimportantpurchasingconsideration
inemergingmarketsthanglobally.Nearlythree-quartersof
respondentsinIndia(74%)androughlyhalfinChina(54%),
Africa/MiddleEast(50%)andSoutheastAsia(47%)say
theybuypremiumproductsbecausetheseitemsshowother
peopletheyhavegoodtaste.Butpremiumproductsdon’t
justcommunicatesophisticationandtaste;they’realsoan
importantindicatorofaccomplishment.Roughlysevenin10
Indianrespondentssaytheybuypremiumproductsbecause
theseproductsmakethemfeelsuccessful(73%)orshowother
peoplethey’resuccessful(69%).AgreementislowerinChina
(56%foreachbenefit),Africa/MiddleEast(48%and40%,
respectively)andSoutheastAsia(47%and41%),butit’sstill
significantlyhigherthanindevelopedmarkets.
Source:TheNielsenGlobalPremiumizationSurvey,Q12016
BUYING PREMIUM PRODUCTS MAKES ME
FEEL GOOD
BUYING PREMIUM PRODUCTS MAKE ME
FEEL CONFIDENT
BUYING PREMIUM PRODUCTS SHOWS OTHER
PEOPLE I HAVE GOOD TASTE
BUYING PREMIUM PRODUCTS MAKES ME
FEEL SUCCESSFUL
BUYING PREMIUM PRODUCTS SHOWS OTHER PEOPLE I AM SUCCESSFUL
I BUY PREMIUM PRODUCTS TO
EXPRESS MYSELF
I BUY PREMIUM PRODUCTS SO I AM
SEEN AS A TRENDSETTER
MY FRIENDS’ PERCEPTIONS OF LUXURY BRANDS OR
PRODUCTS ARE IMPORTANT
I BUY PREMIUM PRODUCTS TO DIFFERENTIATE MYSELF
FROM OTHERS
I BUY PREMIUM PRODUCTS BECAUSE MY FAMILY AND
FRIENDS DO
52%
50%
45%
44%
41%
39%
36%
35%
34%
31%
PREMIUM PRODUCTS CAN BUY ME LOVE
SELF-ESTEEM
PERCEPTIONS/STATUS
GLOBAL AVERAGE PERCENTAGE WHO STRONGLY OR SOMEWHAT AGREE WITH STATEMENT
16 GLOBAL PREMIUIMIZATION REPORT
EMOTIONAL DRIVERS RESONATE STRONGLY IN SOME DEVELOPING MARKETS
PERCENTAGE WHO STRONGLY OR SOMEWHAT AGREE WITH STATEMENT
SELF-ESTEEM PERCEPTIONS/STATUS
ASIA-PACIFIC EUROPE AFRICA/MIDDLE EAST LATIN AMERICA NORTH AMERICA
Source:TheNielsenGlobalPremiumizationSurvey,Q12016
BUYING PREMIUM
PRODUCTS MAKES ME
FEEL GOOD
BUYING PREMIUM
PRODUCTS SHOWS OTHER
PEOPLE I AM SUCCESSFUL
63% 35% 57% 37% 43%
52% 26% 40% 26% 31%
55% 29% 48% 28% 36%
54% 31% 50% 35% 36%
61% 33% 55% 38% 39%
47% 18% 32% 25% 27%
BUYING PREMIUM
PRODUCTS MAKES
ME FEEL SUCCESSFUL
BUYING PREMIUM
PRODUCTS SHOWS OTHER PEOPLE I HAVE
GOOD TASTE
BUYING PREMIUM
PRODUCTS MAKES
ME FEEL CONFIDENT
I BUY PREMIUM
PRODUCTS SO I AM SEEN AS A
TRENDSETTER
17Copyright © 2016 The Nielsen Company
BUYING PREMIUM PRODUCTS
MAKES ME FEEL GOOD
BUYING PREMIUM PRODUCTS SHOWS OTHER PEOPLE I HAVE GOOD TASTE
BUYING PREMIUM PRODUCTS
MAKES ME FEEL CONFIDENT
BUYING PREMIUM PRODUCTS SHOWS OTHER PEOPLE I AM SUCCESSFUL
BUYING PREMIUM PRODUCTS
MAKES ME FEEL SUCCESSFUL
I BUY PREMIUM PRODUCTS SO I
AM SEEN AS A TRENDSETTER
I BUY PREMIUM PRODUCTS
TO EXPRESS MYSELF
I BUY PREMIUM PRODUCTS TO
DIFFERENTIATE MYSELF
MY FRIENDS’ PERCEPTIONS OF
LUXURY BRANDS OR PRODUCTS
ARE IMPORTANT
I BUY PREMIUM PRODUCTS
BECAUSE MY FAMILY AND
FRIENDS DO
Ineveryregion,youngerrespondents(GenerationZ,Millennialsand
GenerationX)aremorelikelythanoldergenerationstoagreethat
theypurchasepremiumgoodsforemotionalandsocialreasons.For
example,59%ofglobalMillennials,54%ofGenerationXand48%of
GenerationZrespondentsagreethatpurchasingpremiumproducts
makesthemfeelgood,comparedwith37%ofBoomersand26%of
SilentGenerationrespondents.
Source:TheNielsenGlobalPremiumizationSurvey,Q12016
GLOBAL AVERAGE PERCENTAGE WHO STRONGLY OR SOMEWHAT AGREE WITH STATEMENT
MORE MILLENNIALS PURCHASE PREMIUM GOODS FOR EMOTIONALAND SOCIAL REASONS THAN BOOMERS
MILLENNIALS(21-34)
BOOMERS(50-64)
50% 22%
53% 27%
44% 18%
40%
15%
42%
19%
43%
17%
59%
37%
52%
27%
57%
33%
47%
23%
SELF-ESTEEM PERCEPTIO
NS/STATUS
SELF-ESTEEM PERCEPTIO
NS/STATUS
18 GLOBAL PREMIUIMIZATION REPORT
STICKER SHOCK ABSORBERS: CONSCIOUS-CONSUMPTION PRODUCT ATTRIBUTES JUSTIFY A PREMIUM PRICE FOR MANYWhenitcomestothelikelihoodofpurchasingpremiumproducts,
notallproductattributesarecreatedequal.Certainproductqualities
justifyahigherpricetaginconsumers’minds—andconsumersare
morethanwillingtopayapremiumforthem.
Inaworldwhereconsciousconsumptionisgoingmainstream,
productswithanenvironmentalbenefitcanjustifyahigherpricetag
formany.Infact,roughlyfourin10globalrespondentsarehighly
willingtopayapremiumforproductsmadewithorganicorall-
naturalingredients(42%)orenvironmentallyfriendlyorsustainable
materials(39%),andjustunderone-thirdwillpaymoreforproducts
thatdeliveronsocial-responsibilityclaims(31%).
Environmentalfactorsareespeciallypersuasiveamongemerging-
marketrespondents.Infact,forproductsmadewithorganicand
all-naturalingredientsorenvironmentallyfriendlyorsustainable
materials,halformorethanhalfofrespondentsinTurkey,India,
China,Venezuela,VietnamandColombiasaythey’rehighlywillingto
payapremium.Respondentsinthesesamecountriesarealsohighly
willingtopayforproductsthatdeliveronsocial-responsibilityclaims,
althoughresponselevelsareslightlylower,rangingfrom45%to40%.
“GREEN” ATTRIBUTES HAVE PREMIUM POTENTIAL
GLOBAL AVERAGE PERCENTAGE WHO ARE HIGHLY WILLING TO PAY A PREMIUM FOR ATTRIBUTE
Source:TheNielsenGlobalPremiumizationSurvey,Q12016
COMES WITH HIGH QUALITY STANDARDS
PROVIDES SUPERIOR FUNCTION OR PERFORMANCE
CONTAINS ORGANIC/ALL NATURAL INGREDIENTS
CONTAINS ENVIRONMENTALLY FRIENDLY/SUSTAINABLE MATERIALS
OFFERS/DOES SOMETHING NO OTHER PRODUCT ON THE MARKET PROVIDES
DELIVERS SOCIAL RESPONSIBILITY CLAIMS
ORIGINATES FROM A SPECIFIC COUNTRY
48%
42%
42%
39%
34%
31%
21%
19Copyright © 2016 The Nielsen Company
Youngerrespondents(GenerationZ,MillennialsandGenerationX)are
morelikelytosaythey’rehighlywillingtopaymoreforeveryoneofthe
productattributesincludedinthesurvey.Whenitcomestotherelative
importanceoftheattributes,however,thegenerationsareremarkably
consistent,withhighqualitystandards,superiorfunctionorperformance,
andorganicorall-naturalingredientstoppingthelistamongrespondents
ofallages.
“Millennialsfaceveryrealeconomichardshipsandremainprice-
conscious,”saidLubel.“Yetmanyarewillingtopaymoreforhigher-
qualityproductsthatarecompatiblewiththeirlifestylesandvalues.
Infact,Millennialsaredrasticallyreshapingperceptionsofpremium,
withauthenticity,simplicity,healthfulness,sustainabilityandsocial
responsibilityservingasthenewindicatorsofpremium.”
MILLENNIALS MORE LIKELY TO PAY PREMIUM PRICES THAN BOOMERS
GLOBAL AVERAGE PERCENTAGE WHO ARE HIGHLY WILLING TO PAY A PREMIUM FOR ATTRIBUTE
COMES WITH HIGH
QUALITY STANDARDS
MILLENNIALS(21-34)
BOOMERS(50-64)
PROVIDES SUPERIOR FUNCTION
OR PERFORMANCE
DELIVERS SOCIAL RESPONSIBILITY CLAIMS
CONTAINS ORGANIC/ALL
NATURAL INGREDIENTS
ORIGINATES FROM A
SPECIFIC COUNTRY
CONTAINS ENVIRONMENTALLY FRIENDLY/SUSTAINABLE MATERIALSOFFERS/DOES SOMETHING NO
OTHER PRODUCT ON THE MARKET PROVIDES
Source:TheNielsenGlobalPremiumizationSurvey,Q12016
55%
35%
47%
31%
47%
31%
44%29%
40%20%
37%18%
27%11%
20 GLOBAL PREMIUIMIZATION REPORT
RESEARCH AND RECOMMENDATIONS RULE, BUT DON’T DITCH THE PITCH Whenitcomestotheinformationsourcesmostlikelytomotivateconsumers
totryanewpremiumproduct,globalrespondentsprimarilyrelyon
recommendationsfromfriendsandfamily(45%)andtheirownresearch
(37%).
Developing-andemerging-marketrespondentsaremorelikelytosaytheir
decisionsarebasedonadvertisingsources.Infact,onlineadvertisingis
themostcommonlycitedsourceinIndia,selectedby51%ofrespondents.
Innearlyallothermarkets(excepttheadvancedAsianmarkets),television
advertisingismoreinfluentialinencouragingnew-producttrialthanonline
advertising.Therearesomeregionaldifferences,however,withrespecttothe
mostimportantdriverofdecision-making.
Indevelopedmarkets,researchismorewidelycitedasadriverofnew-
producttrialthanrecommendations.InCentralandEasternEurope,53%
ofrespondentssaythey’lltryanewproductbasedontheirownresearch,
while44%sayrecommendationsfromfriendsandfamilyareanimportant
driver.InNorthAmerica,it’s38%and29%,respectively.Thegapisnarrower
isthePacificandWesternEurope.Thirty-fivepercentofrespondentsinthe
Pacificand30%inWesternEuropesaythey’lltryanewproductbasedon
theirownresearch,while32%and28%,respectively,saynew-producttrial
isbasedonrecommendationsfromfriendsandfamily.Intheadvanced
Asianmarkets,researchisthemostcommonlyciteddriverofnew-product
trialintheregionasawhole(46%),butJapanistheclearoutlier,at61%.In
HongKong(55%),Taiwan(49%),Singapore(48%)andSouthKorea(43%),
recommendationsfromfriendsandfamilyaremorecommonlycited.Research
isalsothemostcommonlyciteddriverofnew-producttrialinLatinAmerica,
byanarrowmargin(45%saytrialisbasedonresearch;42%sayit’sbasedon
recommendations).
Inemergingmarkets,withtheexceptionofLatinAmerica,respondents
conducttheirownresearchbutaremoredependentonrecommendations
fromfriendsandfamilywhendecidingtotryanewpremiumproduct.Sixty-
fivepercentofonlinerespondentsinChina,52%inSoutheastAsiaand46%
inAfrica/MiddleEastsaythey’lltryanewpremiumproductbasedonthe
recommendationsoffriendsandfamily.
21Copyright © 2016 The Nielsen Company
“Whenlaunchingnewproducts,brandsneedtoaligntheirmediatactics
withtheproduct’scorevaluepropositionandthetargetaudience,”
saidLubel.“Forexample,digitalmaybeamoreefficientchannel
thantraditionaladvertisingforabrandmarketinganenergydrinkto
Millennials.”
THE DRIVERS OF NEW PRODUCT TRIAL ARE MULTIFACETED
PERCENTAGE WHO SAY TRIAL OF NEW PREMIUM PRODUCT IS BASED ON SPECIFIC SOURCE
ASIA-PACIFIC EUROPE AFRICA/MIDDLE EAST LATIN AMERICA NORTH AMERICA
Source:TheNielsenGlobalPremiumizationSurvey,Q12016
RECOMMENDATION FROM FRIENDS/FAMILY
52% 35%
46% 42%
29%
RESEARCH
33% 41%
39% 45%
38%
IMPULSE
20% 28%
24% 16%
18%
ONLINE ADVERTISING
IN-STORE ADVERTISING
RADIO/OUTDOOR ADVERTISING
12% 5%
14% 12%
7%
29% 13%
30% 24% 23%
36% 14%
35% 24%
15%
TELEVISION ADVERTISING
37% 15%
36% 29%
23%
22 GLOBAL PREMIUIMIZATION REPORT
BEST PRACTICES FOR LAUNCHING PREMIUM PRODUCTSBrandscancapitalizeontherisingappetiteforpremiumproductsand
increasetheirbottomlinesbyputtingapremiumonpremium-focused
innovation.Basedonanextensivereviewofnew-productdevelopment,
Nielsen’sInnovationPracticehasidentifiedsixguidelinesfordeveloping
anddeployingpremiumproducts:
1. Create a highly differentiated offering.Allsuccessfulinnovations—regardlessofprice—shareacommoncharacteristic:Theyresolve
arealconsumerstruggle.Nielsenresearchhasfoundthat75%of
conceptstesteddon’taddressanyrelevantneedforconsumers,and
theseconceptshavelessthana5%chanceofsurvivalinmarket.
Differentiationisparticularlyimportantforpremiumbrands,asit
helpsjustifythehigherpricepointtheycommand.Accordingtoa
Nielsenanalysis,productconceptswithhigheruniquenessscores
tendtobelessprice-sensitive.
2. Ensure the product lives up to the promise.Allproductsneedtodeliveronexpectations,butit’sparticularlytrueforpremium
products.Higherpricessetahigherbarforproductperformance;
whenaproductispositionedaspremium,consumershaveless
toleranceforpoorperformanceorundesirableattributes.
3. Enhance the package design.Perceptionsofaproductbeginassoonasconsumerslayeyesonit.Packaginghelpsbrandsgetnoticed
and,moreimportantly,cansignificantlyelevateperceptionsofa
product.Infact,Nielsenresearchhasshownthatoptimizedpackage
designs—identifiedusingobjectiveconsumerfeedback—canboost
forecastedsalesbyanaverageof5.5%.Perceptionsofpremiumvary
widelybycategoryandculture,butseveralvisualcuescansignal
thataproductispremium.Theseincludesimpleoruncluttered
designs,moderngraphics,andpackagingthatlookshandcrafted.
Premiumpackagingmayalsoprovidefunctionalbenefits;for
example,lighter,easy-to-carrypackagesdesignedforcitydwellersor
compartmentalizedpackagesthatmakeon-the-goeatingeasier.
23Copyright © 2016 The Nielsen Company
4. Ensure the price is right.Premiumpricescanvarysignificantly
withinmostcategories—fromentry-levelofferingspriced20%to
50%higherthanaveragetoaffordableluxuries,withpricesatleast
threetimeshigher.Justasnewproductsshouldbedevelopedwith
theconsumerinmind,theyshouldbepricedbasedonconsumers’
valueperceptions.Additionally,pricingshouldfactorintherealistic
competitivecontextandretaildynamics.
Attributesthattendtolowerpricesensitivityandjustifyhigher
pricepointsincludeahighlyuniquevalueproposition,premium
packaging(i.e.,materialsandvisualaesthetics),smallerpackage
sizes,noveltyorlimited-editionpackagingandlongerpurchasing
cycles.Distributionchannelsalsocanaffectpricingexpectations.
Limitingdistributiontospecialtychannelscanenhancepremium
perceptions,butalsohaveanegativeimpactonvolumesales.
Brandscanalsojustifyhigherpricepointsbyconsciouslymanaging
consumers’frameofreference.Forexample,haircareproductsthat
promisesalon-qualityresultscanoftenchargemorethantraditional
productsbecausetheyhaveincludedprofessionalhairservicesin
theircompetitiveset.
5. Activate in a way that amplif ies the product’s unique proposition. Thereisnosingle“right”activationmodelforpremiumproducts,
butthereareseveralconsiderationsbrandsshouldkeepinmind
tooptimizetheirstrategy.First,brandsneedtobeconsciousof
howconsumersseetheirproductontheshelf:Whereisitplaced
inrelationtocompetitors,andwhatdoesthissignal?Inaddition,
brandsshouldpromotewithcaution,asdiscountingfrequentlyor
heavilycanerodepremiumperceptions.Finally,brandsreallyneed
toensurethattheirmarketingresonatesemotionally.Aswe’veseen,
thereasonsforbuyingpremiumbrandsaren’tjustfunctional,they’re
emotional(especiallyinemergingmarkets).Besidesdemonstrating
atechnicalbenefit,brandsneedtocommunicateahigher-order
emotionalbenefitthatconnectswithconsumers’aspirationsand
needs.
6. Provide sustained, long-term support.Mostnewproductsexperience
asalesdeclineintheirsecondyearinthemarket.Whatdistinguishes
theproductsthatgrowfromthosethatdecline?Thegrowthbrands
spendalmostthesameamountonadvertisinginyeartwoasthey
didinyearone.Incontrast,second-yearadspendingforbrands
thatdeclineequalsonlyaboutone-fifthoftheiryear-onebudget.
Givenpremiumproducts’higherpricetag,consumeradoptionmay
beslowerthanformainstreamorvalueproducts,sotheycould
requireevengreatermarketingsupport.Therefore,brandslaunching
premiumproductsmustplanforrobust,multiyearsupport.
24 GLOBAL PREMIUIMIZATION REPORT
COUNTRIES IN THE GLOBAL SURVEY
MARKET INTERNET PENETRATION
Australia 93%
China 52%
HongKong 80%
India 37%
Indonesia 34%
Japan 91%
Malaysia 68%
NewZealand 94%
Philippines 53%
Singapore 81%
South Korea 92%
Taiwan 84%
Thailand 60%
Vietnam 52%
ASIA-PACIFIC
MARKET INTERNET PENETRATION
Egypt 37%
Morocco 61%
Pakistan 18%
SaudiArabia 65%
SouthAfrica 49%
UnitedArabEmirates
92%
AFRICA/MIDDLE EAST
MARKET INTERNET PENETRATION
Canada 93%
UnitedStates 87%
NORTH AMERICA
EUROPE
MARKET INTERNET PENETRATION
Austria 83%
Belarus 59%
Belgium 85%
Bulgaria 57%
Croatia 75%
CzechRepublic 80%
Denmark 96%
Estonia 84%
Finland 94%
France 84%
Germany 88%
Greece 63%
Hungary 76%
Ireland 83%
Israel 73%
Italy 62%
Kazakhstan 54%
Latvia 82%
Lithuania 82%
Netherlands 96%
Norway 96%
Poland 68%
Portugal 68%
Romania 56%
Russia 71%
Serbia 66%
Slovakia 83%
Slovenia 73%
Spain 77%
Sweden 95%
Switzerland 87%
Turkey 60%
UnitedKingdom 92%
Ukraine 43%
MARKET INTERNET PENETRATION
LATIN AMERICA
Argentina 79%
Brazil 68%
Chile 80%
Colombia 59%
Mexico 56%
Peru 59%
Venezuela 62%
Source:MiniwattsMarketing,InternetWorldStats,June30,2016(EuropeisupdatedthroughNov.30,2015),www.internetworldstats.com
SeveralsubregionsinAsia-Pacificwerereferencedthroughoutthereport.Groupingswerebasedoneconomicandgeographicsimilarities.ThePacificincludesAustraliaandNewZealand;advancedAsianmarketsincludeHongKong,Japan,Singapore,SouthKoreaandTaiwan;SoutheastAsiaincludesIndonesia,Malaysia,Philippines,ThailandandVietnam.
TwoEuropeansubregionswerereferencedthroughoutthereport,basedongeography.WesternEuropeincludesAustria,Belgium,Denmark,Finland,France,Germany,Ireland,Italy,Netherlands,Norway,Portugal,Spain,Sweden,SwitzerlandandU.K.CentralandEasternEuropeincludesBelarus,Bulgaria,Croatia,CzechRepublic,Estonia,Greece,Hungary,Israel,Kazakhstan,Latvia,Lithuania,Poland,Romania,Russia,Slovakia,Slovenia,TurkeyandUkraine.
25Copyright © 2016 The Nielsen Company
ABOUT NIELSEN RETAIL MEASUREMENT SALES DATASoutheast Asia:Thedataisbasedonsalesinsixcountries(Indonesia,Malaysia,thePhilippines,Singapore,ThailandandVietnam)from
August2012toAugust2014.Sixteencategorieswereselectedacross
foursupercategories.Thecategoriesselectedforanalysiswerepersonal
care,whichincludedbabydiapers,facecleansers,facemoisturizers,
shampoo,toothpaste;homecare,whichincludedhouseholdcleaning
andlaundrydetergent;food,whichincludedbiscuits,breakfast
cereal,chocolate,icecream,infantmilkformula,instantnoodles;and
beverages,whichincludedcarbonatedsoftdrinks,ready-to-drinktea,
water.Allbrandswereassessedatthepacksizeleveltodeterminewhat
wastheirpriceindexrelativetothecategoryaverage.Premiumproducts
weredefinedasthosewithapriceindexof1.2orgreaterrelativetothe
categoryaverage.
U.S.:Thedataisbasedonsalesforthe52weeksendedApril2,2016.Growthfiguresareintermsofdollarsandwerecalculatedforthetwo-
yearperiodfromApril2014toApril2016.Theanalysisincluded20
categoriesfallingintofoursupercategories.Thecategoriesselectedfor
analysiswerepersonalcare,whichincludedfemininehygiene,men’s
facialmoisturizers,men’sfacialcleansers,shampoo,shavingneeds,
toothpaste;homecare,whichincludedhouseholdcleaningandlaundry
detergent;food,whichincludedeverydaychocolatecandy,frozen
entrees,icecream,saltysnacksandsnackbars;andbeverages,which
includedliquidcoffee,liquidtea,milk,refrigeratedliquidtea,shelf-
stablemilk,softdrinks,water.Premiumproductsweredefinedasthose
withapriceindexof1.2orgreaterrelativetothecategoryaverage.
Almondmilksalesdata(page12)wasforthefive-yearperiodended
December26,2015.Dataforsalesofdrydogfood(page13)isfor
2012to2015.Super-premium,asdefinedbytheproductmanufacturer,
includesproductswithmeatormeatmealasthefirstingredient.
Europe:ThedataisbasedonsalesinfourWesternEuropeancountries:
France,Germany,ItalyandtheU.K.Growthfiguresareintermsof
euros.Dataisfor2014to2015.Theanalysisincludedfourcategories
representingpersonalcare(shampoo),homecare(laundrydetergent),
food(sweetbiscuits)andbeverages(cannedsoftdrinks).Premium
productsweredefinedasthosewithapriceindexof1.2orgreater
relativetothecategoryaverage.
26 GLOBAL PREMIUIMIZATION REPORT
ABOUT THE NIELSEN GLOBAL SURVEYTheNielsenGlobalPremiumizationSurveywasconductedMarch1–23,
2016,andpolledmorethan30,000onlineconsumersin63countries
throughoutAsia-Pacific,Europe,LatinAmerica,theMiddleEast/Africa
andNorthAmerica.Thesampleincludesinternetuserswhoagreedto
participateinthissurveyandhasquotasbasedonageandsexforeach
country.Itisweightedtoberepresentativeofinternetconsumersby
country.Becausethesampleisbasedonthosewhoagreedtoparticipate,
noestimatesoftheoreticalsamplingerrorcanbecalculated.However,
aprobabilitysampleofequivalentsizewouldhaveamarginoferror
of±0.6%atthegloballevel.ThisNielsensurveyisbasedonlyonthe
behaviorofrespondentswithonlineaccess.Internetpenetrationratesvary
bycountry.Nielsenusesaminimumreportingstandardof60%internet
penetrationoranonlinepopulationof10millionforsurveyinclusion.
ABOUT NIELSENNielsenHoldingsplc(NYSE:NLSN)isaglobalperformancemanagement
companythatprovidesacomprehensiveunderstandingofwhatconsumers
watchandbuy.Nielsen’sWatchsegmentprovidesmediaandadvertising
clientswithTotalAudiencemeasurementservicesforalldevicesonwhich
content—video,audioandtext—isconsumed.TheBuysegmentoffers
consumerpackagedgoodsmanufacturersandretailerstheindustry’sonly
globalviewofretailperformancemeasurement.Byintegratinginformation
fromitsWatchandBuysegmentsandotherdatasources,Nielsenalso
providesitsclientswithanalyticsthathelpimproveperformance.Nielsen,
anS&P500company,hasoperationsinover100countries,coveringmore
than90%oftheworld’spopulation.
Formoreinformation,visitwww.nielsen.com.
Copyright©2016TheNielsenCompany.Allrightsreserved.Nielsenand
theNielsenlogoaretrademarksorregisteredtrademarksofCZT/ACN
Trademarks,L.L.C.Otherproductandservicenamesaretrademarksor
registeredtrademarksoftheirrespectivecompanies.16/10628
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