In the not-too-distant past, premium packaged goods were a niche category reserved for a specific type of consumer– affluent, urban, and largely homogenous. But today, the cultural landscape of consumer behavior has shifted dramatically. As multicultural, younger, and digitally native audiences gain buying power and visibility, the definition of “premium” is being reshaped– not just by income, but by identity, values, and cultural expression.
From specialty skincare to upscale pantry staples, consumers of color are participating in the premium goods economy and driving it. According to a recent report by McKinsey, Black consumers in the U.S alone wield over $1.6 trillion in annual spending power, and increasingly seek products that reflect their identities and aspirations. Similarly, Hispanic consumers represent a collective buying power of more than $2.8 trillion, as reported by the Selig Center for Economic Growth, and they are 66% more likely than the general population to pay more for high-quality, authentic products.
Premium means more than price tags and manufactured exclusivity. Today’s consumers place a high value on storytelling, heritage, and transparency. For example, a brand like Partake Foods, founded by Denise Woodard, offers allergy-friendly, premium snacks while also centering representation and inclusion in its mission. Yes, clean ingredients are the main character, but it’s also about who is making the product, who it’s for, and the story behind it.
The rise of direct-to-consumer (DTC) platforms, along with the surge in influencer marketing, has allowed minority-owned brands to build direct relationships with their audiences. These relationships often go beyond mere transactions. Brands like Topicals, which offer science-backed skincare for chronic skin conditions and is helmed by Olamide Olowe– the youngest Black woman to raise $10 million in venture funding– show how premium goods can thrive when they are rooted in cultural insight and relevant to the communities they serve.
A recent NielsenIQ report found that 61% of Gen Z shoppers consider sustainability when purchasing CPG products, and multicultural Gen Z consumers are especially likely to seek out brands that align with their values. This is particularly important as Gen Z is the most racially and ethnically diverse generation in American History, with nearly half identifying as non-white. This means that cultural fluency is not just a bonus for brands, but a requirement.
What we’re seeing amounts to a reorientation of prestige. Products once positioned as luxurious because they were European, clinical, or had a more modern, minimal-style branding are now competing with goods that celebrate culture, heritage, and vibrant expression. Diaspora Co., for example, is a South Asian spice brand that has redefined the premium spice category by offering single-origin turmeric and cardamom, while educating consumers about decononizing their spice cabinets. Diaspora Co.’s mission to pay fair wages to small farmers while building a premium identity rooted in South Asian culture is a radical reframing of what premium can mean.
Another element to keep in mind with diverse audiences is the way consumers of color perceive “quality” through a different lens. Premium isn’t always about glass packaging and minimal labeling– it might be about family recipes, traditional preparation methods, or wellness practices rooted in ancestral knowledge. For instance, Golde, a wellness brand co-founded by Trinity Mouzon Wofford, offers matcha and turmeric blends inspired by holistic health traditions, while presenting them with vibrant, youth-friendly branding. Golde products are not just functional– they are lifestyle signifiers, shaped by cultural identity and self-expression.
Beauty and personal care is one of the fastest-growing premium categories, with Black and Latina consumers showing disproportionate investment. A report from McKinsey Beauty Market Insights found that Black consumers spend approximately $1.2 billion annually on beauty and are 2.5 times more likely to engage on social platforms with beauty brands that reflect their identity. Yet historically, this demographic has been underserved in the premium space. Brands like Ami Colé and Rare Beauty are filling this gap by centering inclusive product development, diverse campaign imagery, and mental wellness alongside luxe packaging and formulations featuring buzzy ingredients.
The expansion of the premium category also coincides with rising health consciousness, particularly post-pandemic. Asian American consumers, for instance, have shown growing interest in premium wellness products that reflect both Western science and Eastern traditions. Companies like Poppi, a prebiotic soda brand, and Immi, a high-protein, low-carb instant ramen founded by Kevin Lee and Kevin Chanthasiriphan, appeal to health-aware Millennial and Gen Z shoppers who want elevated, culturally familiar snacks with a better-for-you twist. These brands signal that healthy, indulgent, and culturally resonant products are no longer mutually exclusive.
Retailers have also taken note. Sephora has expanded shelf space and marketing budgets for premium brands by BIPOC founders. Before finding itself in the crosshairs of its loyal customers due to the company announcing it was pulling away from its internal and external diversity initiatives, Target operated an accelerator program called Forward Founders that helped make room for a broader definition of premium. But efforts such as these are not just about access– it’s about how these products are positioned. Are they hidden in a “multicultural” section, or are they integrated into the mainstream shopping experience? Representation without parity on the shelf is no longer enough.
Even mass market brands are rethinking their playbooks. Dove, long seen as a legacy brand, has leaned into purpose-driven messaging, particularly around racial equity in beauty standards. Its CROWN Act campaign, which pushes for legislation to end hair discrimination, aligns with deeper consumer values around authenticity, respect, and identity. The decision to make these moves elevates the brand’s cultural relevance, reinforcing its place in a premium consumer’s consideration set.
Brands should also understand that today’s consumers view purchasing as a form of political and cultural participation. According to Morning Consult, 60% of Gen Z say a brand’s values are important to them when making a purchase decision. This means the stakes are higher than ever, and audiences are paying attention: missteps related to cultural sensitivity, lack of authenticity, or performative gestures can cost a brand its hard-earned trust and perceived value.
In our current moment, premium isn’t just about ingredients or aesthetics; it’s about resonating with consumers. It’s about whether a brand understands its consumers deeply enough to reflect not only their tastes but also their lived experiences. Consumers are buying into meaning, not just marketing, especially not marketing that they can see right through as performative. What lies ahead for premium CPG is just as much about transformation as it is about growth. The old standard of luxury is being replaced by a new one– one that celebrates culture, complexity, and shared community.
