The concept of ‘premium’ is rather loose, shifting depending on the context. But as a general rule, it implies something extra that a consumer receives for a product. Most commonly that’s assumed to be quality (perhaps the craftsmanship) but it can also mean something with additional features.
‘Premium’ once meant an affordable luxury: a treat that consumers were prepared to pay extra for.
Yet inflation means they’re tightening their belts. And they’re thinking much more carefully about what they’re prepared to pay money for.
Alcohol is a classic example here: while people are clearly drinking less for health reasons, they’re also cutting back for financial ones too.
Does this mean the age of premiumisation is finally over?
New definition: value
Premiumisation is not dead: but it is changing.
Crucially, premiumisation is going from a vague, undefinable term to one where each dollar, pound or euro is justified.
“The era of easy price-led growth is ending,” says Nataly Kelly, CMO of Zappi. “Brands can’t assume consumers will simply absorb higher prices anymore: they increasingly have to prove why something is worth paying more for.”
In alcohol, that might be about highlighting the provenance or brand story. In soft drinks, it might be about highlighting functionality (and, furthermore, backing that up with science).
In short, it’s about being very clear on what consumers are paying for. That means ‘premium’ is now about ‘value’: not in the sense of being cheap or a bargain, but in clearly delivering the extra value it promises.
“The brands that win will likely be the ones that make premium feel tangible: whether that’s through better experience, stronger quality cues, more thoughtful formats, or offerings that feel customized, convenient, or genuinely differentiated,” continues Kelly.
“Premium today is less about luxury for luxury’s sake, and more about whether consumers feel the experience actually justifies the price.”
Adapting what 'premium' looks like
Craft beer is, arguably inherently, a premium product - and one that rode the premium wave in the early 2000s. So does craft beer stand up with this new concept of premium?
Matt Gacioch, chief economist at The Brewers Association, acknowledges that Americans are not feeling very optimistic about the economy: and that the pressures are mounting in 2026.
“Beer is not immune to these forces, but, at the same time, craft beer volumes declined slightly less than beer overall,” he notes (craft beer declined 5% whereas overall beer declined 5.7%). In other words, craft beer has maintained its market share of the overall beer category - despite the move away from premium.
How so? One of the reasons is that craft beer is adapting. Two of the biggest growth brands in craft beer in 2025 were light lagers: Garage Beer and Outlaw (by Tivoli Brewing Company) - beers that are priced within range of of what a mainstream beer consumer might be prepared to pay.
Premium private label
In an age where consumers’ wallets are under pressure, private label is growing. And at the same time, its identity is evolving.
Private label was once about ‘cheap alternatives’ to mainstream brands. Now, these retailer-owned options are gaining market share across the board.
And again, it’s down to value. Private label products are increasingly proving to consumers that they can be a good product, at a good price point.
Wine is a perfect example. For decades, wine has struggled to break through in private label: failing to compete with the premium, luxury image built up by alcohol over hundreds of years. But Lidl, for example, now boasts a range of wine and spirit awards.
That creates a conundrum for brands, says Graham Staplehurst, director at Kantar BrandZ. In 2025, the world’s top alcohol brands saw their collective value decline 7%: indicative of the pressure on the category.
The problem is that brands don’t have the option to cut prices to compete with private label - they need to maintain their premium pricing to maintain their premium position.
Private label, however, is increasing its quality and recognition and therefore its ‘premiumness’ - all while maintaining a lower price - narrowing the gap between premium and private label.
“Own label has done incredibly well in many, many categories,” he says. “Actually, alcohol is one of the lower adoption of own-label, but it is coming. It has been building.”
That success has to prompt people to re-think how they think of private label, and the crucial question now is: can private label be premium?
“Yes, absolutely,” says Staplehurst, pointing to the rise of flavoured gins, high-end imitation products and award wins.
What can brands offer that private label can’t? It’s about showcasing a brand story, point of difference and emotional connection - and, most importantly, convincing consumers this is worth paying for.
