Premium brands: how did they fare lately?

Winners among premium brands focus on value, innovation and reach

Small decline in the number of premium brands

Over the past four years the number of premium brands (those that charge 60% more than the average category price) among the Top 10 brands in a category has declined by about 5% in six European markets. This decline is similar across category tiers – and is a consequence of more price-driven shopper choices which pushed some of the premium brands in 2019 out of the Top 10. Also, some brands ceased to be premium because their price increase was lower than for the category in total.

Fewer players also reduced the share of premium

The decline in the number of premium brands also reduced the average share captured by premium Top 10 brands in the category. Their aggregated value share dropped from 6.5 to 6.1% while their volume share declined from 3.3 to 3%. This decline is slightly more pronounced than the decline in the number of brands which signals that the average Top 10 premium brand has lost market share.

Winning premium brands: more distribution and better innovation

Amongst premium brands that won share from 2019 to 2023, we see a strong emphasis on increasing distribution (+9% vs -2% for share losers) and choice (+14% vs -16%). They also had more success with new products (in spite of launching less) and implemented substantially lower price increases. Times were tough and, at least for the average premium brand, modest price increases paid off in terms of market share.