Category fragmentation refers to the growing number of brands, product types, and usage occasions within a category. In other words, instead of a few big players dominating a market, we’re seeing a rise in niche brands, specialized formats, and new consumer needs all co-existing within the same category. This trend is especially visible in fast-moving categories like snacks, beverages, personal care, and wellness products.

Using Nielsen data, businesses can track fragmentation by monitoring SKU proliferation, shifts in market share, and the increasing number of small or emerging brands gaining traction. The traditional "top three brands own 80% of the market" narrative is changing in many categories – and Nielsen’s syndicated data tools allow you to see that evolution in real-time.

Why fragmentation is accelerating now

Several industry shifts are causing fragmentation to spike across retail and CPG sectors:

• Lower barriers to entry: Digital commerce has made it easier for small brands to reach customers without traditional distribution.
• Changing consumer priorities: Shoppers increasingly value personalization, health-centric products, sustainability, and purpose-driven brands.
• Cultural shifts: Identity, regional preferences, and lifestyle choices are playing a larger role in brand selection.
• Retail innovation: Omnichannel experiences and expanded shelf space (online and in-store) encourage assortment experimentation.

How to analyze category fragmentation using Nielsen data

Nielsen tools allow you to go beyond top-line sales to evaluate:

• Brand count and concentration: How many brands account for most of the category’s sales? Are small and medium players gaining ground?
• Share of innovation: Is growth being driven by new formats, pack sizes, or attributes (like plant-based or allergen-free)?
• Velocity metrics: Are niche brands moving fast in key retailers or channels?

However, accessing this type of insight with DIY data tools comes with challenges. Without expert support, teams often struggle to define the right timeframes, sort through outdated hierarchies, or isolate signals from noise. That’s where On Demand Talent can help – offering immediate access to insights professionals who can help interpret category dynamics in context, teach your team how to use Nielsen more effectively, and ensure your decisions reflect what consumers are actually doing, not just what the dashboard says.

In fragmented markets, context is everything. Someone on your team may notice that ten smaller brands have appeared in the data, but only a seasoned insights expert might connect that pattern to broader cultural trends or predict which ones are likely to scale. Their ability to dig deeper, ask smarter questions, and tell the story behind the data ensures your decisions are driven by more than reactive numbers – they’re backed by strategy.

Premiumization is the shift in consumer behavior where people are increasingly willing to pay more for perceived quality, craftsmanship, sustainability, or exclusivity. It’s not just a luxury trend – it’s showing up across everyday categories like coffee, pet food, cleaning products, and even bottled water. And in a time when wallet share matters more than ever, premiumization can open up new pathways to profit, loyalty, and brand differentiation.

For businesses, understanding premiumization is critical – not just for product development, but for pricing, assortment, and positioning. The challenge? Spotting these shifts before they go mainstream. Thankfully, Nielsen data provides a lens to identify where premium segments are forming, which SKUs are driving growth, and where consumers are trading up.

What premiumization looks like in Nielsen data

Premiumization isn’t always obvious at first glance. But with the right data cuts, you can start to see it come to life. Some indicators include:

• Growth in high-price tiers: Are the top 20% price SKUs growing faster than mid- or low-tier products?
• Feature-driven demand: Are consumers paying more for attributes like “cold-pressed,” “organic,” or “artisan”?
• Shift in promotional lift: Are promotions less effective at driving high-tier SKUs, suggesting inelastic demand?

These data trends point to changing shopper expectations. Many consumers today are rethinking what value means – often equating value not with price, but with performance, ethics, and experience. That mindset has major implications for how brands position themselves and which claims matter most.

Why this matters for consumer insights teams

Premiumization affects more than just pricing. It changes how brands should speak to customers, what innovation to prioritize, and how to differentiate in crowded categories. But here’s where DIY dashboards often fall short: without proper framing and context, you may miss the bigger picture. Accessing the data is easy; interpreting it is the hard part.

This is where working with an insights professional – like one from SIVO’s On Demand Talent network – can close critical gaps. Our experts help you:

• Identify where premium dynamics are emerging within your category
• Segment shoppers and SKUs more thoughtfully to reflect evolving behaviors
• Connect cultural shifts (like wellness, sustainability, or social status) to purchase drivers

For example, if you’re seeing mid-priced segments lose share, it might not be a commoditization problem – it could be a sign that your audience is skipping the middle ground and jumping to value or premium. A seasoned insights expert can help you test those hypotheses, validate them with Nielsen tools, and translate the insight into action – whether that’s pricing, innovation, or communications.

As more companies lean on DIY tools to analyze consumer behavior, the ones that get ahead are those that pair automation with human interpretation. On Demand Talent lets you scale your insight capabilities on your terms – so you don’t miss out on category shifts that could redefine your brand’s future.

As the consumer landscape becomes more diverse and dynamic, many categories are undergoing fragmentation – a shift where once-dominant brands share shelf space with an increasing number of niche and emerging players. At the same time, we’re seeing a strong rise in premiumization, where consumers willingly pay more for added benefits such as quality, sustainability, or health. Nielsen data offers powerful visibility into both of these market trends, allowing businesses to identify and respond to shifting shopper behaviors.

How Nielsen Data Reveals Fragmentation

Category fragmentation can be seen in Nielsen data when market share becomes less concentrated among top brands. Uncovering this involves drilling into product-level sales, household penetration, and distribution metrics across subcategories. For example:

• If a category’s top five brands decline in collective share over time, it may signal increasing fragmentation.
• A spike in the number of new brands or SKUs entering the category could also indicate variety-seeking behavior or shifting consumer values.

This is especially relevant in categories like beverages, snacks, or personal care – where growing consumer preferences for specific benefits, flavors, or ingredients are giving rise to a wider range of offerings.

Tracking Premiumization with Nielsen

Nielsen price tier analysis and unit-level pricing allows companies to see where consumers are “trading up.” Some signs of premiumization include:

• Shifts from lower-tier to higher-tier items, even in price-sensitive categories
• Growth in niche SKUs offering specialty claims (e.g., organic, clean label, cruelty-free)
• Brand launches focused on elevated experiences or functional benefits

For example, a fictional sparkling water brand may observe its premium flavor line outpacing standard SKUs in velocity. Using Nielsen tools, teams can isolate these trends by channel, region, or shopper group – revealing where premiumization is happening most strongly.

Context Matters – So Does the Right Expertise

While Nielsen data is highly granular, it’s only valuable if interpreted in the right context. Teams may see brand shifts, but not immediately understand why. This is where expert support helps. Combining consumer insights with behavioral data paints a more complete picture – connecting what’s happening in the numbers to how consumers are thinking, feeling, and buying.

As more organizations bring data analysis in-house, Nielsen's growing suite of self-service platforms gives teams access to powerful market research. However, these DIY data tools can come with their own set of challenges – particularly for teams without deep experience in consumer data interpretation. Left unsolved, these challenges can result in missed opportunities, misaligned decisions, or shallow trend spotting that lacks cultural relevance.

Misinterpreting Signals of Fragmentation or Premium Growth

Users new to Nielsen tools may struggle to pinpoint what truly signals category fragmentation. A growing number of SKUs does not always equate to fragmentation. Similarly, average price increases may not reflect true premiumization if driven by cost inflation rather than value-added trade-ups. Without the right filters and context, teams may draw the wrong conclusions or rely on surface-level observations.

Difficulty Connecting Quantitative Data to the Consumer Story

Market trends like premiumization often stem from deeper shifts in consumer values – whether health, sustainability, or lifestyle aspirations. While Nielsen excels at showing what’s happening, it can’t always explain why. DIY users may find themselves data-rich but insight-poor, unable to bridge the gap between metrics and human behavior.

Democratization Without Infrastructure

Access to data has grown faster than many teams’ ability to support it. DIY tools place a heavy burden on non-specialist users who may not have a background in data analysis. This can lead to:

• Over-reliance on templates or pre-built dashboards that don’t tell the full story
• Underutilization of available datasets (e.g., filtered views, custom hierarchies)
• Frustration among teams trying to “connect the dots” in siloed roles

Ultimately, while the tools are more available than ever, the skills to use them effectively are not always in place – and that’s a growing gap in many insights teams.

Speed vs. Strategic Depth

The current business environment often prioritizes speed and cost-efficiency. But cutting corners on expertise can dull the impact of what Nielsen data could offer. Teams may generate rapid reports but miss strategic inflection points around niche player growth or subtle signals of consumer trade-ups.

To get the most out of Nielsen and other DIY data tools, many organizations are turning to experienced professionals who can guide analysis and strategy. That’s where SIVO's On Demand Talent comes in – offering flexible access to seasoned consumer insights experts who help companies use their data more effectively without sacrificing quality or speed.

Bringing Clarity to Complexity

Our On Demand Talent professionals have deep experience interpreting Nielsen and other syndicated data sets. They know how to go beyond numbers to reveal meaningful patterns – such as unpacking the drivers behind market fragmentation or decoding the cultural dynamics fueling premiumization. With this expertise, they help businesses ask smarter questions, craft more insightful queries, and avoid common misreads that can skew strategic decisions.

Connecting Cultural Trends with Behavioral Data

While Nielsen shows what’s flying off the shelf, On Demand Talent can provide the human intelligence behind it. They combine quantitative trends with qual insights, social context, and competitive positioning – building stories that resonate across functions. This is especially important when tracking emerging brands or market shifts influenced by identity, lifestyle, and social values.

Flexible Support on Your Terms

SIVO’s On Demand Talent allows you to scale your insights function exactly when and how you need – without the overhead of full-time hires or the complexity of traditional consulting firms. Whether you need:

• Short-term coverage during a team vacancy
• An extra set of expert hands for a retail line review
• Strategic storytelling to bring Nielsen data to life at an executive level

Our experts are ready to jump in and make an immediate impact.

Upskilling During the Process

Unlike outsourced solutions that take over the work, On Demand Talent can support and empower your team. Many clients use our experts not just to fill gaps, but to help build internal capabilities around using DIY tools like Nielsen. That means you’re future-proofing your organization while solving current challenges.

Case in point (fictional example): A mid-sized snack company overwhelmed by SKU explosion brought in an On Demand Talent expert to reframe their category definitions, implement pricing quartile views, and coach their internal analyst team – resulting in both immediate wins and long-term growth of internal capability.