A tale of 2 consumers: Value-seeking versus premiumisation in South Africa

New global research from NielsenIQ (NIQ) shows that FMCG consumers are increasingly moving between premium and value purchasing mindsets, depending on what they are buying, what they need and what they believe they are getting in return. The findings come from NIQ’s latest global report, A Tale of Two Consumers: The Polarized Mindsets Reshaping Global Consumption.

Building on NIQ’s generational spending research in collaboration with World Data Lab, the report finds that the same consumers are moving between “upgrade” and “price-constrained” purchasing mindsets, carefully choosing when it is worthwhile to pay a premium and when it makes sense to trade down to save money. The result is a market in which the traditional “average” consumer is becoming a less useful target.

Key findings include:

• Affluent consumers spent $35.9tn globally in 2025, surpassing spending by the much larger core consumer population, who spent $31.6tn.
  
• Across all age groups, consumers are increasingly alternating between premium and value-seeking behaviours, depending on category, occasion and need state.
  
• This shift is creating a “barbell effect”, with demand concentrating at premium and value tiers while the middle market comes under increasing pressure.
  
• While middle-market growth is flat in mature Western markets, this segment still offers significant volume opportunities in emerging markets such as South Africa.
  
• Rising incomes create volume opportunities for FMCG brands in South Africa, while the expanding affluent populations in the metros create new potential to tap into premium markets.
  
• South African FMCG brands are successfully leveraging promotions to preserve market share, even as value customers become more price-sensitive.

A three-way split in the South African consumer landscape

The global research shows how an affluent consumer may trade down to “good enough” alternatives when a premium product offers no extra benefit. A mass-market consumer may trade up when quality, performance, trust, relevance or convenience justify the additional cost.

“In South Africa, this dynamic is playing out against a particularly complex consumer backdrop,” says Zak Haeri, managing director, NIQ South Africa.

“There is a large group of consumers for whom affordability remains a daily consideration, with promotions, rewards, bulk buying and lower-priced brands helping them manage household budgets,” says Haeri. “ At the same time, more affluent consumers retain spending power and are prepared to upgrade when quality, convenience, relevance or other benefits justify the additional cost.

Between these two groups is an emerging mass market that remains an important source of potential volume growth. This means there is a new group of consumers able to participate more fully in FMCG categories, creating opportunities for brands that can deliver accessible products at the right price points. Yet the landscape cannot be reduced to a simple divide between premium, middle-market and value shoppers.

“The same South African shopper can trade down to a cheaper product in one category, buy a premium product in another and switch between brands in others according to promotions, pack sizes and perceived value,” says Haeri. “Consumers are not choosing to be a premium, middle-market or value shopper. They are making decisions about where their money delivers the greatest return.”

Zak Haeri, MD for NIQ in South Africa

Promotions are training shoppers to scrutinise price

In South Africa, a growing proportion of FMCG goods are sold on discounts and specials. Across major South African FMCG product supergroups, 64% recorded year-on-year increases in both regular and promotional price elasticity.

The result is that shoppers are becoming more accustomed to promotional prices and more sensitive to both regular and promotional price changes. This creates a paradox for manufacturers and retailers: promotions can defend volume and help brands compete on price, but repeated discounting can condition shoppers to wait for the next deal and make profitable pricing harder.

“This dynamic shows that FMCG brands in South Africa are responding creatively and effectively to price-sensitivity among value and mass-market consumers,” says Haeri. “However, leading brands need to ensure they use promotions to fulfil strategic purposes such as recruitment, trial, retention or stock-up rather than allowing them to become the default response to weak product differentiation.”

Private label: a South African divergence

Private label provides an interesting South African counter example to a broader global trend towards value-seeking. The global report identifies private label as an increasingly credible “good-enough” substitute for some middle-market products. In South Africa, however, recent NIQ data suggests that value-seeking consumer behaviour does not automatically translate into private-label growth.

For the first half of 2026, private label sales were R53.5bn, growing 1.9% year-over-year and accounting for 17.5% of sales value. Independent brands generated R253bn in sales in the first half of 2026, growing 7.9% and accounting for 82.5% of sales value. Private label lost market share over the period. This indicates that independent brands leveraged promotions and their presence in traditional trade channels to protect market share.

“Consumers seem less inclined to switch to a private brand if an independent brand is available at an attractive promotional price,” says Haeri. “Channel choice is an important part of the equation. Price-sensitive consumers are shopping more with independent and informal retailers, where they can purchase national brands in smaller packs or make more frequent top-up purchases.”

Some of the key takeaways for South African FMCG manufacturers and retailers are:

• The middle-market product is no longer a safe default. Every product must establish itself as a premium worth paying for, a smart value choice, an accessible mass-market proposition or a trusted staple worth keeping in the basket.
  
• South Africa's emerging mass market remains an important volume opportunity, but manufacturers must balance this opportunity with premiumisation at the upper end and increasingly sophisticated value-seeking strategies at the lower end.
  
• Promotions and channel choice are becoming central to FMCG strategy. Brands need to understand not only what consumers are willing to pay, but where, when and in what format they are prepared to buy.
  
• The recent performance of private label demonstrates that value-seeking does not automatically mean private-label substitution. Independent brands that use promotions effectively can remain competitive, particularly where shoppers value trusted brands but need a more compelling price.
  
• Pack architecture needs to work harder in a polarised market. Pricing, pack sizes, promotions and channels must work together to make products relevant to consumers at different points of the value spectrum.