PREMIUM-ISATION and free-from foods are two prominent trends that gained momentum in 2018, according to Nick Hickford, the new marketing and innovation director of Don Smallgoods.

Hickford, who was previously general manager of marketing and innovation at Bulla Dairy Foods, said the rise of premiumisation is being driven by the rise of budget-conscious consumers who are looking for small affordable luxuries.

“There are fewer opportunities for people to shell out large amounts of money and there are more people who are looking for ways to express status or make themselves feel good about life. We’ve seen that particularly a lot in ice cream,” he said.

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While the variety is good news for consumers, Hickford said it’s also putting increasing pressure on brands and retailers.

“The plethora of products means it can significantly reduce the visibility of a brand’s product on the shelves, especially if they only have the one SKU,” he said.

“Retailers are also now managing much more complex categories because there’s so many SKUs in a range from many different manufacturers, whereas a few years ago they only had to deal with five. Small manufacturers don’t have processes and systems that the large manufacturers do, and that brings a real level of complexity and risk for retailers.”

In addition to premiumisation, free-from foods trend took off it in the last 12 months, according to Hickford, who believes it will continue to gain traction over the next few years.

He explained how free-from foods still make up relatively small portions of sales, but as consumers’ eating habits change and are more conscious about the provenance of their food, particularly among millennials, it’s likely the free-foods market will grow.

“Some countries like Sweden are seeing north of 20 per cent of the population become vegans. But for countries like Australia and New Zealand, it’s still very small as a total percentage. My view is that free-from foods is a slow burn trend over the next 10 or 20 years before it’s a significant component of sales,” he said.

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