The New Class Divide: AI and What Premium Really Means
AI is creating a fundamental divide in CPG brand marketing, and consumer packaged goods founders need to understand which side their brand belongs on before making production decisions they can't walk back. The question isn't whether AI is good or bad for CPG packaging strategy. It's whether using AI for content production matches your brand positioning.
This morning, Esther Kats, CEO of Maniere, a New York children's fashion brand sold at Nordstrom, Bloomingdale's, and other premium retailers, posted on LinkedIn about replacing their traditional photoshoots with AI-generated imagery. No more baby wrangling. No more nap schedule negotiations. No more $200,000 production budgets. Just customized AI babies wearing their collections.
The backlash on LinkedIn was immediate.
I'm sitting in Esther's seat right now. We're working with a Japanese company launching a smart tech product for babies. Superior product, zero US recognition, limited budget. For the past month, we've been pricing out traditional shoots. The numbers are brutal. Babies by law can only work minutes at a time. You book multiple infants hoping one cooperates. You need licensed supervisors. Photographers, stylists, locations. A multi-day shoot climbs into six figures fast.
So yes, we're considering AI. Not because we love it, but because the math is stark.
But here's what I think is actually happening, and why Esther's decision matters more than the cost savings.
Why Premium CPG Brands Use Production Methods as Brand Positioning Signals
Premium brands in consumer packaged goods have always needed proof. Not just claims about quality, but visible, verifiable evidence that justifies a higher price. The product itself is only part of the brand strategy equation. How it's made, who makes it, and the care invested in production become signals that customers read and interpret.
Hand stitching instead of machine seams. Natural materials instead of synthetic. Small batch instead of mass production. These aren't just features in your CPG packaging design. They're proof of commitment to craft, and they justify premium pricing in the customer's mind.
This pattern shows up across every luxury category. Swiss watches command prices in the tens of thousands because master watchmakers spend hundreds of hours hand assembling tiny components. A Rolex costs more than a quartz watch not because it tells time better, but because the production method itself signals value. The craft is the point.
In fashion, Hermès bags take artisans 18 to 24 hours to hand stitch. That labor isn't hidden. It's featured in their marketing, their store experience, their brand story. Customers pay $10,000 for a Birkin bag partly because they know a single craftsperson made it by hand. The production method is inseparable from the brand promise.
Food and beverage categories follow the same logic. Small batch whiskey costs more than mass produced spirits not because the taste difference justifies the price gap, but because the production story does. Craft breweries use "brewed in small batches" as a positioning statement. Artisanal bread commands higher prices because customers see the baker's hands in the product.
Even in CPG packaging design, premium brands use production methods to signal quality. Embossing, foil stamping, hand applied labels, custom glass molds. These techniques cost more and take longer, but they communicate something mass production can't: that someone cared enough to do it the hard way.
"Shot with real people" is becoming the next luxury marker in this tradition. And brands that have built their brand positioning on premium quality need to pay attention.
The Psychology of Authenticity in CPG Brand Positioning
Premium customers in consumer packaged goods don't just buy products. They buy into a promise. The implicit contract is simple: you pay more, you get more. Not just in product quality, but in every detail surrounding the product. The packaging design, the photography, the brand experience, the story.
When a premium customer sees an AI baby in a catalog and thinks "that looks too perfect," something shifts. The next question isn't "cool technology." It's "what else is fake?"
That question is dangerous for premium brand strategy because it breaks trust. Once a customer starts questioning authenticity in one area, they question it everywhere. If the babies in the photos aren't real, maybe the product quality claims aren't accurate. Maybe the materials listed aren't what they seem. Maybe the brand story about founders and craft and care is just marketing.
This isn't rational. The product itself hasn't changed. But premium pricing is never purely rational. It's psychological. Customers pay more because they believe the brand cares about details other brands don't. The moment that belief cracks, the premium position becomes harder to defend.
Esther built Maniere as a premium brand. Her customers choose Nordstrom over Target because they want quality in every detail. That's the contract. Using AI for catalog photography saves money, but it signals something different than what the brand has always stood for. You can save $200,000 and lose something worth more than that.
This is where brand strategy and packaging design intersect with production decisions. Every choice a CPG brand makes sends a signal. Premium brands succeed when all those signals point in the same direction: quality, craft, attention to detail, authenticity. When one signal contradicts the others, customers notice.
How Mass Market CPG Brands and Emerging Companies Calculate Differently
For our Japanese client, the calculation is different. They're not premium yet. They're unknown. They need content to compete with category leaders who have budgets they don't. Using AI strategically to build momentum while they grow isn't a betrayal of their brand promise. It's a survival decision for emerging consumer packaged goods companies. Different stage, different stakes.
Mass market brands face similar math. Their customers aren't paying for craft signals. They're paying for value, convenience, availability. Using AI to reduce production costs and increase content output makes strategic sense for mass market CPG packaging strategy. No one expects Target's private label brands to shoot with the same production values as luxury competitors. The positioning doesn't demand it.
Emerging CPG brands launching with limited funding face the hardest choice. They often position as premium because margins matter and commodity competition is brutal. But they don't have premium budgets yet. So they cut corners in production while trying to maintain premium positioning in packaging design and brand strategy.
This works until it doesn't. Eventually customers notice the disconnect. The packaging promises one experience, the marketing photography suggests another, and the product delivery reveals the truth. Better to match production decisions to brand positioning from the start, or adjust positioning to match what the budget allows.
The worst position is the middle. Trying to look premium with mass market production methods. Using AI imagery while charging luxury prices. Claiming craft while automating everything. Customers see through it faster than founders expect.
CPG Brand Positioning: How to Know Which Side of the Divide Your Brand Belongs On
The divide is forming now in consumer packaged goods marketing. Mass brands will use AI to manage cost and scale content production. Premium brands will use real production to signal authenticity and justify pricing. This isn't about right or wrong. It's about positioning.
Here's how to know which side your CPG brand belongs on:
Ask where your pricing falls. If you're charging premium prices for your category, customers expect premium signals everywhere. Production methods, packaging design, photography, brand story. All of it needs to reinforce the premium position. Cutting costs with AI while maintaining premium pricing creates a mismatch that customers will notice and punish.
Ask who your competition is. If you're competing with established premium brands, you need to match or exceed their production standards. If you're competing in mass market where efficiency matters more than craft, AI makes strategic sense for your CPG packaging strategy. Know your competitive set and match their signals.
Ask what your customers value most. Some categories and demographics care deeply about authenticity. Others care about value and convenience. Young parents shopping premium baby products tend to care about authenticity and safety signals. Using AI babies in marketing might trigger concerns about what else isn't real. Know your customer psychology.
Ask what stage you're at. Early stage companies with limited budgets sometimes need to make trade offs that established brands don't. Using AI strategically to build initial momentum while saving budget for product development can make sense. But have a plan for when you transition to real production as you scale.
Ask if you can be transparent. Esther was transparent about using AI. That's brave, but it invites scrutiny. If you're going to use AI in your CPG brand marketing, decide whether you'll disclose it or try to pass it off as real. Both approaches carry risk. Trying to hide it and getting caught destroys trust. Disclosing it openly invites the "what else is fake" question.
The safest rule: match your production decisions to your brand positioning. If you're premium, produce like it. If you're mass, optimize for efficiency. The danger is claiming one position while operating like another.
The Future of Brand Authenticity in CPG Marketing
As AI improves, telling the difference between generated and real content will get harder. Right now, AI babies look close but not quite right. The skin is too perfect, the lighting too even, the composition too balanced. Give it another year and those tells disappear.
When AI becomes indistinguishable from real photography, premium CPG brands will need new ways to prove authenticity. We'll likely see verification systems emerge. "Shot with real talent" certifications. Behind the scenes content showing actual production. Photographer and model credits featured prominently. Anything that proves the brand invested in real production rather than generated content.
This already happens in other consumer packaged goods categories. "Hand made" labels and certifications. "Small batch" claims that customers can verify. Transparency about supply chains and production methods. Premium brands use these signals to justify pricing and differentiate from mass competitors.
Photography and content production will follow the same pattern. Brands that want to position as premium will need to prove their marketing imagery is as real as their product claims. That proof becomes part of the brand story and part of what customers pay for.
The alternative is accepting the mass market position. Use AI, optimize for efficiency, compete on value rather than craft. That's a legitimate CPG packaging strategy for many brands. Just know that's the choice you're making.
Determining Your CPG Brand's Position in the Marketing Divide
AI isn't going away. Neither is the customer psychology that values authenticity and craft in premium categories. The divide between mass market efficiency and premium production signals will become more pronounced, not less.
CPG founders launching new brands need to decide early which side they're on. Your packaging design, brand strategy, production methods, and go to market approach all need to point in the same direction. Mixed signals confuse customers and weaken brand positioning.
Established premium brands face a different question: is the cost savings from AI worth the risk to brand perception? For some categories and demographics, the answer might be yes. For others, especially in spaces where authenticity matters to customers, the risk outweighs the savings.
We're working through these questions with clients right now. There's no universal answer. It depends on your category, your brand positioning, your competitive set, your customer psychology, and your stage. But every CPG brand will face this choice soon, and the decision matters more than most founders realize.
