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Permissible Indulgence: The Psychology of Affordable Luxury

June 30, 2025News

Thriving in Uncertain Times: CPG Resilience Series (Part 3 of 5)

By Mark Haas

When economic uncertainty forces consumers to rethink their budgets, one pattern stays consistent: the pursuit of permissible indulgence in CPG. Our data shows that 76 percent of shoppers still choose indulgent snacks regardless of calories or inflation. This trend is rooted in the well-documented lipstick effect. In today’s food and beverage landscape, that effect has evolved into a premium snack movement that delivers comfort, emotional reward, and small moments of joy.

The Psychology of Permissible Indulgence in CPG

Indulgence is not just a flavor profile. It is a strategy. Consumers are not merely buying snacks. They are buying experiences. According to Bakery and Snacks¹, shoppers are intentionally shifting budget from larger luxuries to small, high-impact items:

  • Emotional reward seeking: 83 percent of consumers say they seek moments of joy through affordable luxury snacks²

  • Premium resilience: Products with 30 to 50 percent price premiums held strong during inflation³

  • Portion control psychology: Single serve indulgent formats grew 34 percent compared to larger packs⁴

These behaviors confirm a long-term trend. Permissible indulgence is more than a marketing term. It is an emotional anchor.

Case Study: Elevated Bites

During the pandemic, Elevated Bites—a mid-sized premium snack brand—took a bold approach:

  • Offered premium single serves with strong margins

  • Promoted artisanal techniques to support premium pricing

  • Shared origin stories tied to sourcing regions

  • Positioned snacking as a personal moment of self care

The outcome was clear. Elevated Bites grew 42 percent while the broader snack category saw a 14 percent increase⁵. They also expanded into 220 new retail locations and raised their average price point by 8 percent.

Strategic Opportunities: Think Like a Startup

Mid-market brands that adopt a startup mindset are finding success in the indulgence category. That includes:

  • Running four week sensory testing cycles

  • Launching limited edition seasonal flavors

  • Using small batch production for flexibility

This approach aligns with what Harvard Business Review⁶ calls emotional innovation—the practice of refining how a product makes someone feel, not just what it does.

What Works: Affordable Luxury Trends to Watch

Looking ahead, five affordable luxury trends are shaping the premium snack market:

  1. Functional indulgence combining emotional satisfaction with health benefits⁷

  2. Sustainability as a luxury signal through packaging and sourcing⁸

  3. Global flavor exploration offering accessible luxury experiences⁹

  4. Nostalgia based SKUs that create emotional connection

  5. Limited drops creating excitement and urgency

Mid-Market Tactics from Luxury CPG Brands

Brands do not need big budgets to build premium perception. Mid-sized brands are borrowing techniques from luxury to boost perceived value:

  • Multi sensory packaging that enhances anticipation

  • Storytelling around ingredients and origin

  • Positioning indulgence as a daily ritual

  • Centering messaging on emotional reward rather than product features

Why It Matters: Emotional Spending Drives Resilience

Permissible indulgence CPG brands are not just surviving. They are growing. Emotional connection creates loyalty that lasts through market volatility.

Brands that communicate emotional value, innovate around experience, and hold a premium position are turning uncertainty into strategic opportunity.

References

  1. Bakery and Snacks. (2024, January). “Consumer Preferences in Premium Snacking.” Industry Report. 
  2. International Food Information Council Foundation. (2024). “Emotional Drivers in Food Purchasing Decisions.” Consumer Psychology Research.
  3. NielsenIQ. (2024, February). “The Premiumization Report: Price Elasticity Analysis.” Market Research.
  4. McKinsey & Company. (2024, March). “Consumer Sentiment Survey: Discretionary Spending Patterns.” Market Analysis.
  5. Information Resources Inc. (IRI). (2021). “Premium CPG Performance During Economic Volatility.” Market Intelligence Report.
  6. Innova Market Insights. (2025, January). “Top Ten Trends in Food and Beverage.” Global Market Analysis.
  7. Euromonitor International. (2024). “Sustainability as a Premium Driver in Consumer Goods.” Industry White Paper.
  8. Mintel Group Ltd. (2024, April). “Global Food & Drink Trends: Premium Positioning Strategies.” Market Research.  
  9. Food Marketing Institute. (2024). “Emotional Drivers of Premium Food Purchases.” Consumer Research Consortium.
  10. Brown, S. & Davis, L. (2024). “Emotional Innovation in Consumer Products.” Harvard Business Review, 102(4), 67-75.

About the Author

Mark Haas is CEO of The Helmsman Group, helping mid-market CPG brands scale and commercialize in unpredictable markets. Through InsightSuites™, Helmsman delivers real time consumer intelligence to support high impact decisions.

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