5 ways to boost sales of luxury food and drink

19 May 2021, 08:01 AM
  • The Lipstick Effect, the ‘self-treating’ movement, the premiumisation trend – whatever you call it, demand is growing for small luxuries, and the fine food sector is well placed to cash in
5 ways to boost sales of luxury food and drink

You would be hard-pressed to find a trend that the fine food sector is better suited to cater to than the premiumisation of food and drink. Our retailers have long sung the praises of speciality and artisan products to any shopper who would stop and listen, and since Covid-19 hit, the revival of high-end food has proved to be a boon to the independent.

Forced to eat at home, shoppers have been keen to stock up on higher-quality storecupboard ingredients, top cuts of meat and the finest artisan cheeses to spice up mealtimes. Luxurious foods have also made for indulgent treats, bringing a smile during what’s been a very challenging year.

Elsewhere, the edible gifting trend, which kicked off over the holidays, hasn’t shown any sign of stopping. Consumers have been marking family milestones and other important events by sending their loved ones hampers packed with local treats, surprise boxes of chocolate and confectionery, or small-batch boozy bottles to be enjoyed over a video catch-up. It’s the Lipstick Effect – the swapping of large, expensive purchases for more affordable ‘treats’ – in action. For retailers, the convergence of all of these trends means one thing: demand for small luxuries is high, and it’s likely to keep growing. We look into five ways that retailers can maximise their opportunities with premium food and drink.

1. Rethink the in-store experience

As essential retailers, food shops have been lucky enough to keep their doors open throughout the lockdown, making them the ideal venue for consumers to indulge in a small treat for themselves, a gift for a loved one or just a simple bit of retail therapy. For this reason, shops will benefit from a fresh makeover that places premium products front and centre.

Demand for high-end food and drink gifting has been so great at iconic London retailer Partridges, that John Shepherd, managing director, has reworked his store layout to make the most of the trend. “Where our in-store café used to be, we have now put in a gift section full of small luxuries like chocolate, panettone, candles, household products and home decorations and bespoke small hampers. Because it has worked so well, we are not thinking of bringing our indoor café back,” he tells Speciality Food.

Reevaluate the layout of your shop floor to determine the value of existing spaces and what a new section focused on luxury food gifting could bring to the table. Retailers don’t have to go as far as replacing whole segments of their stores, however – these treats could make up the basis of a visual merchandising revamp, or even a small display by the tills. However you choose to incorporate premium gifts, John recommends going big on the display, especially for holidays or occasions. “In-store decorations and signage highlighting the special products are very important. If you’ve got it, flaunt it during special events. The desire for luxury food items is alive and well.”

2. Open the door to online gifting

As Partridges’ sales prove, gifting offers fine food retailers a significant opportunity to cash in on the growing desire for premium food and drink, especially during a year when many have been unable to celebrate occasions with their friends and family. “Since the start of this year, we have noticed a real rise in customers using our website to send small luxury gifts to loved ones,” says a spokesperson for Daylesford. “From biscuits and boxes of chocolates to homeware, gardening items and bodycare, there has been an increase in sales for small luxuries as presents.”

And gifting is not just restricted to the big holidays any more – consumers want to mark an array of life events with edible mementos. “Whilst Mother’s Day and Valentine’s Day were both key gifting dates, we can see that get-well-soon and thinking-of-you messages have risen in popularity throughout the last few months,” Daylesford’s spokesperson explains.

Retailers can capitalise on this trend by rethinking their online offering and considering how to provide a simple and straightforward digital shopping experience. “When it comes to e-commerce, make sure you have the ability for customers to send something as a gift along with a personal note,” the spokesperson adds. “Plus, if you have the capacity to offer a gift-wrapping service, this is a simple and thoughtful way to upsell a service.”

Hampers and themed boxes are always beloved gifting options, and this year they’re proving incredibly popular by providing consumers with exactly what they want – a bundle of high-end foodie gifts in one convenient package. Demand has been so high that luxury retailer Fortnum & Mason warned ahead of last Christmas that it was almost completely sold out of its range of hampers.

“It’s fair to say that demand this year has been unlike any other,” outgoing chief executive Ewan Venters told The Telegraph at the time. But while he added that it was not surprising to see this rise in demand for gifts during the pandemic, he was shocked to find that more consumers were buying luxury hampers for themselves. “We have also seen more demand for hampers for self-consumption this year as they seek to make the most of their own festive period,” he said.

Having clocked on to the growing gifting trend early, Daylesford introduced smaller boxes and bundles in a range of prices to allow customers to treat their nearest and dearest whatever the occasion. By hitting a number of different price points, retailers will ensure that their range appeals to the widest possible audience. To drive sales even further, the shop’s spokesperson recommends taking a considered approach to your e-commerce offering. “In the same way that you might visually merchandise groups of items in-store, apply the same approach to your website. Create a category specifically for gifting so it is easy for website users to search the range. Similarly, if certain items such as candles and chocolates are often bought as gifts, you could include the option to add a bottle of wine to cross-sell.”

3. Think outside the box

Traditional, high-end food and drink gifts have certainly proved popular during the pandemic. “Own label products always sell well for us, including wines, champagne and gin, chocolates and gift baskets,” John says. “As summer starts, our Chelsea Flower Show-related products do well – tea, fudge, jams etc – and items with the Royal Warrant have been selling well.” But with gifting and self-treating occasions expanding, retailers should think about how they can push the limits of the category.

For instance, luxury hot cross buns make a low-key Easter spent at home that much more special. “Find new products that either symbolise the special event or tell an interesting story. Innovation added to tradition is a powerful asset,” John advises. “It is time for the luxury brands to come to the fore.”

The message is similar at Daylesford: classics, such as the shop’s Tea, Jams & Biscuits, Daylesford Prosecco and Thinking of You boxes have sold out since their launch in January, and wines, spirits, confectionery and cookbooks have seen strong demand, too. But customers are also looking for premium options that stray from the beaten path. “In addition to the traditional gifting options, we have seen customers sending grocery orders and fresh broth bundles as luxurious yet nourishing alternatives.”

4. Consider comfort and health

Gifting aside, the self-treating trend is the other major driver of demand for small luxuries. Al Overton, buying director at Planet Organic, noticed that despite customers shifting to healthier habits at the start of the year, which drove demand for plant-based products and no and low alcohol drinks, within those categories the retailer noted that sales were rising for comforting and premium foods – from high-end vegan truffles to dairy-free cheeses to artisan no-alcohol spirits.

With the health trend still going strong, retailers must walk the line between indulgent treats and products with strong health and ethical credentials. According to research from GlobalData, stress often causes consumers to have one of two distinct reactions: either they will restrict their diets or indulge more in confectionery and comforting foods. With one in four global consumers currently feeling anxious, Amira Freyer-Elgendy, consumer analyst at GlobalData, says it’s important to seek out “guilt-free indulgences and highlight health or ethical credentials” to target both types of consumers.

“As consumers do not want to compromise on the taste of their comforting indulgences, one way to target both the diet restrictors who may be looking for healthy alternatives and the indulgers who are keen on familiar comfort foods is by developing and marketing the ‘guilt-free indulgence’,” Amira adds.

5. Prepare for the future

As demand for small luxuries was impacted by the pandemic, a post-Covid world may look different. But retailers are hopeful that after living with high-quality food products over the past year, and seeing the delight that luxury food gifts bring, consumers will continue to treat themselves and their friends and family.

Planet Organic’s Al believes that consumers have begun to link premium food products into their daily rituals. “I think we are looking for rituals to enliven things – how to mark the end of the working day when it just means leaving the spare bedroom, whether it be a non-alcoholic cocktail at 6 o’clock, or vegan truffles for after dinner. That ritual may even just be extra time spent preparing a meal, and in fact one of our biggest sales increases through lockdown has been in our only-organic fruit and veg.” The key for independents will be ensuring that these rituals are here to stay in the months and years ahead and retaining the customers who have ventured to their local shops to try something new for the very first time during the pandemic.

Partridges’ John is also hopeful that after witnessing strong demand for luxury food gifts – as well as cross-selling products such as wrapping paper, ribbons and greeting cards – retailers can hang on to these customers – Covid or not. “If we can get it right, I think this trend will outlast lockdown as we can offer lots of items not available elsewhere. By capturing the imaginations of shoppers and inspiring them with the quality and flavour that artisan products can bring to the table, independents will ensure that the desire for small luxuries does not fade. “The last year has made us all rediscover the joy that small luxuries can bring,” Daylesford’s spokesperson says, “so we think this trend may well be here to stay.”

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