Would you pay £14 for a KitKat? The trend for premiumisation hots up

02 Oct 2019

What do we need in times of political uncertainty? According to consumer brands, the answer lies in premiumisation, as Marketing Week discusses.

 

This move towards premium products can be seen across the board – from consumer goods and technology to food and drink.

 

A pint of Speedway Stout costs £22.50 (apparently, it’s made from very expensive ingredients). And Heineken UK has published a report in response to the boom in premium lager, helping retailers maximise sales.

 

Earlier this year, Gillette launched it premium division Gillette Labs hoping to encourage customers to pay £199 for a heated razor. The brand admits it’s “not for everyone”.

 

Even pet food is getting the premiumisation treatment. With 76% of pet owners saying they would spend any amount to keep their pets healthy, the humanisation of pet food and meat-free varieties is gaining in popularity in various markets and pet food is going premium.

 

However, leading the premiumisation pack is the confectionery industry. Galaxy’s Darker Milk range hit the shelves in March this year, and Cadbury’s Darkmilk (‘chocolate for grown-ups’) arrived in the UK in September last year.

 

And now it’s the turn of Nestlé. Eight-finger, hand-crafted, customised KitKats, with a £14 price tag, are available in 1,500 flavour combinations and available to order online or via pop-up shops in 30 John Lewis stores in the run up to Christmas.

 

If £14 is a bit pricey for a bespoke KitKat, Nestlé is also offering special edition bars for £7.50. According to the brand, this is the biggest thing to happen in the world of KitKats since the introduction of the Chunky 20 years ago.

 

Inspiration is being taken from the market in Japan, where consumers have been able to choose from 300 KitKat flavours since 2000. This taps perfectly into the country’s culture of gift giving.

 

By contrast, KitKats are sold in most supermarkets and corner shops for about 70p a pop. With the tagline ‘Have a break, have a KitKat’ the brand has its work cut out to market the bars as gifts or luxury confectionary.

 

Of course, Nestlé will be hoping to emulate the success of its pick and mix Quality Street pop-up stations in John Lewis (btw, the personalised tins are back again this year). However, Quality Street and the humble KitKat are seen as two very different chocolate products by consumers.

 

Unlike other confectionery brands that have focused their premium ranges on affordability, Nestlé is going all out with its top-end pricing. Consumers looking for a novelty Christmas present (for the person who has everything) might be happy to pay £7.50 or £14 for a bespoke KitKat, but it seems unlikely they would do that any other time of the year.

 

No doubt, this uber-Instagrammable move will generate endless social media interest and plenty of column inches, but it would be interesting to see Nestlé’s long-term premium strategy.

 

As Marketing Week points out, premiumisation is not simply a case of replicating what works in one market into another. There is no guarantee it will work. Time will tell whether Nestlé’s high price tag will pay off, or whether they decide KitKats are just fine as a cheap and cheerful treat for all.

 

If you’re thinking of pursuing a premiumisation strategy and need some fresh marketing talent to help you execute it, Stopgap can help. Get in touch with the team today or brief us on a role today.