The New Class Divide: AI and What Premium Really Means
AI Is Creating a Fundamental Divide in CPG Brand Marketing
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 cannot walk back.
The question is not whether AI is good or bad for CPG packaging strategy. The real question is 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 traditional photoshoots with AI generated imagery.
No more baby wrangling.
No more nap schedule negotiations.
No more $200,000 production budgets.
Just customised AI babies wearing their collections.
The backlash on LinkedIn was immediate.
I am sitting in Esther’s seat right now. We are working with a Japanese company launching a smart tech product for babies. Superior product. Zero US recognition. Limited budget.
For the past month, we have 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 are considering AI. Not because we love it, but because the math is stark.
But here is what I think is actually happening, and why Esther’s decision matters far more than cost savings.
Why Premium CPG Brands Use Production Methods as 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 is 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 are not just features in your CPG packaging design. They are 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 labour is not hidden. It is featured in their marketing, store experience, and brand story. Customers pay $10,000 for a Birkin partly because they know a single craftsperson made it by hand.
Food and beverage categories follow the same logic.
Small batch whisky costs more than mass produced spirits not because taste alone justifies the 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 moulds. These techniques cost more and take longer, but they communicate something mass production cannot.
Shot with real people is becoming the next luxury marker in this tradition.
Premium brands should pay attention.
The Psychology of Authenticity in CPG Brand Positioning
Premium customers do not 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 surrounding detail. Packaging design. Photography. Brand experience. Story.
When a premium customer sees an AI baby in a catalogue and thinks “that looks too perfect,” something shifts.
The next question is not “cool technology.”
It is “what else is fake?”
That question is dangerous.
Once authenticity is questioned in one area, it spreads. If the babies are not real, maybe the product claims are inflated. Maybe the materials are not what they seem. Maybe the brand story is just marketing.
This is not rational. The product itself has not changed.
But premium pricing is never purely rational. It is psychological. Customers pay more because they believe the brand cares about details other brands ignore.
The moment that belief cracks, the premium position becomes harder to defend.
Maniere is positioned as premium. Their customers shop Nordstrom instead of Target because they expect quality in every detail. Using AI for catalogue photography saves money, but it signals something different than what the brand has historically stood for.
You can save $200,000 and lose something worth far more.
How Mass Market and Emerging CPG Brands Calculate Differently
For our Japanese client, the calculation is different.
They are not premium yet. They are unknown. They need content to compete with category leaders who have budgets they do not.
Using AI strategically to build momentum is not a betrayal of their brand promise. It is survival.
Mass market brands face similar math. Their customers pay for value, convenience, and availability. Using AI to reduce production costs and increase output makes sense. No one expects Target private label brands to produce luxury level shoots.
Emerging brands face the hardest position.
They often position as premium because margins matter and commodity competition is brutal. But they lack premium budgets. So they cut corners in production while trying to maintain premium signals elsewhere.
This works until it does not.
Eventually customers notice the disconnect. The packaging promises one experience. The imagery suggests another. The product delivery reveals the truth.
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.
How to Know Which Side of the Divide Your Brand Belongs On
Ask where your pricing sits. Premium pricing demands premium signals everywhere.
Ask who your competitors are. Match their production standards or exceed them.
Ask what your customers value most. Some categories care deeply about authenticity. Others do not.
Ask what stage you are at. Early stage brands may need trade offs, but those should be intentional, not hidden.
Ask whether you can be transparent. Disclosure avoids deception, but it does not eliminate risk.
The safest rule is simple.
Match production decisions to brand positioning.
Frequently Asked Questions: AI, Authenticity, and CPG Brand Positioning
Can premium CPG brands use AI without damaging their positioning?
Yes, but only in non customer facing roles. AI is effective for internal concepting and workflow efficiency. Risk begins when AI replaces real production where authenticity justifies premium pricing.
Is AI generated photography always a problem?
No. In mass market categories it aligns with customer expectations. In premium categories such as baby, beauty, wellness, and food, photography functions as proof of care. Artificial imagery introduces doubt.
What should early stage brands positioning as premium do with limited budgets?
Alignment matters more than scale. Fewer real assets often outperform large volumes of synthetic content when trust is still being built.
Is transparency about AI enough to protect trust?
Transparency helps but does not eliminate risk. Trust in premium categories is emotional. Even honest disclosure can trigger questions about what else has been automated.
How should founders decide whether AI fits their strategy?
Evaluate pricing position, competitive set, customer psychology, and stage of growth together. Problems arise when brands claim premium positioning while operating like mass market brands.
How does packaging design relate to this decision?
Packaging is often the strongest trust signal. If packaging communicates craft but marketing imagery feels synthetic, customers notice the inconsistency.
How will premium brands prove authenticity as AI improves?
Through behind the scenes content, credited photographers, real talent callouts, and production storytelling. Proof of real production will become part of the value proposition.
Call to Action
These are not abstract questions.
We are working through these decisions with CPG founders right now as AI reshapes how brands signal value, trust, and intent.
We help international and US based consumer packaged goods companies align brand positioning, packaging design, and production decisions so every signal reinforces credibility rather than undermines it.
If you are weighing AI driven efficiency against premium brand signals, we offer a complimentary 30 minute Readiness Assessment to help clarify the right path forward before costly decisions are locked in.
