Price Points and Premium Products: Strategising for Profit While Staying Ethical

Phil McMahon | B2B

Price Points and Premium Products: Strategising for Profit While Staying Ethical

Phil McMahon | B2B
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Navigating the FMCG landscape, start-ups with a strong focus on ethicality and sustainability face unique challenges. While consumers increasingly seek ethical products, balancing pricing with these values can be a tightrope walk. However, with the right strategy, it's entirely feasible to offer premium, ethically-sourced products without compromising profitability. Here’s how:

Understand Your Value Proposition:
Recognise that ethically produced and sustainable products often possess inherent value. This value isn't just about the tangible product, but the story, the sourcing, the care, and the ethos behind it. Ethical and sustainable products with a clear value proposition stand out in a competitive market, so emphasising these attributes and clearly communicating them can justify a higher price point.

Know Your Audience:
Not every consumer prioritises ethical purchasing, but there's a growing segment that does. These consumers are often willing to pay a premium for products that align with their values. Identifying and directly targeting the consumers who have the highest propensity to purchase your product can help you establish a core, loyal customer base.  Once this base is established you can expand your reach. Really Good Culture can define the personality characteristics of your target audience and advise a strategy on where, when, and how best to communicate with them.

Cost Transparency:
Sharing a clear breakdown of where consumers' money goes can be a game-changer as it demonstrates transparency and can build trust. If they know a certain percentage ensures fair wages, or that the slightly higher cost is due to sustainable sourcing, they’re more likely to understand and accept a premium price point.  Ultimately, your level of cost-transparency has a direct bearing on enabling shoppers to make more informed purchasing decisions, and this can reinforce their willingness to buy ethically produced goods.

Bootstrap and Seek Community Support:
For start-ups, extensive marketing budgets or expansive distribution networks might not be immediately available. Instead, tap into local communities, local markets, and pop-up events to introduce your product. Leveraging local events not only provides a cost-effective platform but aligns well with the ethos of sustainability and community engagement. Additionally, consumers are more likely to pay a premium for products they feel personally connected to, and these grassroots engagements can help establish that initial trust.

Volume vs. Margin:
Deciding on a pricing strategy is crucial for start-ups. Beware of the temptation to offer lower pricing in an attempt to quickly gain a foothold in the market. While lower prices might increase initial sales, they can reduce profit margins and hinder future price adjustments with retailers (who may be very resistant to increases). On the other hand, a slightly higher price can draw a loyal niche of customers valuing ethically-produced goods. This might mean fewer sales initially, but over time, it can ensure sustainable business growth through consistent sales and positive word-of-mouth recommendations. How will your pricing strategy affect consumers’ value perceptions of your product? Ultimately, balancing volume with profitable margins is key for long-term success.

Continuous Feedback and Adaptation:
Regularly engage with both retailers and consumers. A continuous feedback loop will enable your brand to remain responsive, resilient, and relevant. Understand what's working and what isn't. Feedback can offer insights into whether your pricing is in line with perceived value. If consumers feel they're getting their money's worth, they'll return and advocate for your brand.  When faced with challenges, it may be worth reaching out to your professional network for advice; other brands will have faced similar challenges before you and may be able to offer fresh perspectives.


Ethical and sustainable start-ups in the FMCG sector have a golden opportunity in today's market. The shift towards conscious consumerism is not just a trend but a genuine change in purchasing behaviour. By understanding your value, targeting the right audience, and being transparent about costs, your brand can command the price it deserves. Stay true to your brand's ethos, and remember: your commitment to ethicality and sustainability is a value in itself.

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