Products Strive for a Balance of Health and Indulgence

In our July cover story, we look at how premium food has evolved as a combination of better-for-you aspects with better taste.

By Pan Demetrakakes, Contributing Editor

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Can food have it all?

It used to be that if food tasted good, it wasn’t good for you. And vice versa. “Better-for-you” and “indulgent” supposedly were diametrically opposed terms; you endured the former and rewarded yourself with the latter.

But food has evolved to where many products combine those two concepts, or at least aspects of them. This marriage often comes under the banner of “premium.” Products considered top-tier—and usually commanding top prices—offer consumers both an enjoyable eating experience and at least the perception of better nutrition.

“Personally, I think a product can be premium, indulgent and better-for-you all at once,” says Phil Kafarakis, president of the Specialty Food Assn. (www.specialtyfood.com).

As always, defining terms is half the battle. The problem is that there is no hard-and-fast, universally accepted definition of what “better-for-you,” “indulgent” and “premium” mean.

To Bill Bishop, head of retail consultancy Brick Meets Click (www.brickmeetsclick.com), the definition of premium food is simple: It costs more. “‘Premium’ is a statement about price,” he says. “Generally speaking, premium price products are being asked to carry a higher margin because they’re not selling as fast as popular items.”

Dave Donnan, a senior partner in the consumer and retail practice of A.T. Kearney (www.atkearney.com), has a more nuanced take. “There are no definitive definitions of these three terms, so different people will interpret them in varying ways,” he says. “For me, ‘premium’ is around higher quality ingredients, better packaging and a level of high quality positioning.”

“Indulgent” is a little easier to agree on, perhaps because of the meaning of the word itself. Its Latin root means “to grant as a favor,” and an indulgent food is a favor that you grant yourself (or whomever you’re feeding). As Donnan puts it: “Indulgent is emotional with attributes of high flavor and mouthfeel, not necessarily nutritious but with better taste and emotional attributes.”

As for “better-for-you,” the meaning of the words may be plain, but their application has many forms: lower in calories, fat, sodium, etc.; minimally processed; without artificial ingredients; with positive nutrients like vitamins and antioxidants, and other aspects.

Slippery impact

Because the terms are slippery, so is the assessment of their impact. It’s hard to survey the product field for concepts that don’t have strict definitions. But some research has been done, and it indicates that both premium and indulgent are at least somewhat ascendant over better-for-you.

In its Total Consumer Report for 2018, Nielsen (www.nielsen.com/us) divided foods (and other consumer goods) into five pricing tiers. Among branded products, the top tier, with 17 percent market share, showed 6.3 percent growth, by far the most of any segment. Among private label products, the top tier, which had just a 7 percent share—unsurprising, since lower price is a primary appeal of private label—showed growth of 10.6 percent.

In its 2018 State of the Industry report, IRI (www.iriworldwide.com) reveals that with snacks, the categories of “true indulgence” and “treat” showed positive sales growth, at 1.9 percent and 1.8 percent respectively. “Wellness” snacks, on the other hand, fell by 0.4 percent. Interestingly, the largest sales growth, at 2.5 percent, was for “permissible” snacks—which IRI’s Sally Lyons Wyatt, executive vice president and practice leader, defines as “products consumers feel are more permissible because they have less of [detrimental nutrients] or added benefits to their indulgent favorites.”

This idea of giving indulgent products a better-for-you tweak, either by reducing negative nutrients or adding positive ones, isn’t exactly new. But industry observers say it’s being now practiced to an unprecedented degree—and is redefining the major food categories.

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