Americans are skipping restaurant dinners, putting off car purchases and hunting for grocery bargains. Tariff anxiety and a broader affordability squeeze have pushed consumer confidence to its lowest levels in more than a decade, according to The Conference Board. Increasingly, it is wealthier households keeping the U.S. economy's spending engine running.
Which makes one question hard to ignore: How is Erewhon selling a $22 smoothie — and thriving?
The Los Angeles-based luxury grocery chain opened three new stores in 2025, its most aggressive expansion since 2011. The chain reportedly generates $1,800 to $2,500 in sales per square foot — up to five times what a typical American supermarket earns.
These aren't ordinary blended drinks. Erewhon smoothies feature ingredients such as high-grade sea moss gel, adaptogenic mushrooms and collagen peptides, often with a celebrity's name attached to the cup.
It's part of a sweeping boom in the U.S. specialty food market, which has surpassed $219 billion — nearly 150% growth in a decade, according to the Specialty Food Association. That dwarfs the roughly 47% growth in overall U.S. grocery sales over the same period.
Independent retail data from market research firm Circana reinforces the trend: even as inflation-weary shoppers have traded down to store brands across many categories, premium and specialty products held their ground — and even grew their dollar share of the market through 2025. On TikTok, creators who once filmed designer-bag hauls are now posting $12 tinned fish boards. Craft chocolate bars priced at $8 to $12 are being marketed, without irony, as "self-care."
So if consumers are so anxious, why are they still splurging? The answer is that these aren't contradictions — they're two expressions of the same psychological impulse.
When people feel their lives are out of control, they reach for something small, expensive and virtue-signaling. This is the real engine behind premium food's rise, even as some traditional luxury categories falter, according to consumer psychologists.
We are professors of consumer behavior and marketing who study how people make purchasing decisions under economic uncertainty. Our research points to a consistent finding: when people lose control over the big things, they seek it in the small ones.
A quick detour through the makeup drawer
Economists have seen this pattern before.
In 2001, Estée Lauder Chairman Leonard Lauder coined the "lipstick index" after observing that lipstick sales rose 11% in the wake of the September 11 attacks. When big luxuries feel out of reach, consumers find affordable substitutes. A $60 lipstick is extravagant for a cosmetic, but measured against the Hermès handbag it psychologically replaces, it feels like a bargain.
The same dynamic is at work today. Consumer psychologists call it "compensatory consumption" — buying things to restore a sense of control when life feels chaotic.
Even as beauty sales soften, that underlying impulse hasn't gone anywhere. It has simply found a more effective host: food.
Food is close to ideal for this kind of compensatory spending. It's experiential — something you taste, smell and savor. It's emotional, wrapped in associations with comfort, care and home. And it's visible; in the age of social media, what you eat is as public as what you wear. Premium food isn't just consumed — it's filmed, posted and performed.
Crucially, it's still relatively accessible. Twenty-two dollars is an absurd price for a blended drink, but it's nothing compared with a $400 wellness retreat.
Indulgence with a side of virtue
Here is what distinguishes this moment from Lauder's lipstick index. That earlier phenomenon was purely hedonic — consumers seeking pleasure as consolation. Today's premium food purchases carry an additional layer: they are coded as virtuous.
An Erewhon smoothie isn't merely a treat. It's organic, superfood-enriched and wellness-aligned. A $20 bottle of single-estate olive oil isn't just cooking fat; it's a commitment to craft and health. Premium tinned fish isn't convenience food; it's sustainably sourced wild-caught protein in packaging beautiful enough to display on a shelf.
This "virtue coding" is doing the most important psychological work in the transaction. It transforms indulgence into self-investment. You're not splurging during a downturn — you're prioritizing your health. You're not being frivolous — you're supporting small producers. Research shows that consumers need justifications for pleasurable purchases, particularly during periods of financial anxiety. Premium food is powerful precisely because the justification is built into the product itself. The organic label, the sustainability story, the wellness framing — all of it dissolves guilt before it even surfaces.
Consumed in the kitchen, and again on the feed
There's a reason this trend is accelerating now. Many premium food purchases are consumed twice — once physically and once digitally. The Erewhon smoothie isn't really just about the drink; for many buyers, the content opportunity is as valuable as the beverage. The tinned fish board is styled for Instagram before anyone takes a bite.
Social media doesn't merely amplify the trend — it completes it. Posting a photo of that smoothie broadcasts that you value wellness, quality and intentionality. In a cultural moment where flaunting a designer bag can feel tone-deaf, food offers perfect cover. It's the safest status flex available. It's no coincidence that one YouTube video of an Erewhon haul by food creator @KarissaEats has accumulated more than 14 million views.
All of this raises a reasonable question: does the much-discussed "K-shaped economy" simply explain this boom? In that framing, low- and middle-income shoppers are pulling back as affordability pressures mount across housing, health care and education, while wealthier consumers pick up the slack — splurging on luxury and sustaining GDP growth.
Under that logic, premium food thrives because it remains affordable for households that are doing well, even as everyone else cuts back. That's partly true. But it doesn't explain why affluent consumers are pivoting away from designer handbags and toward premium groceries in the first place.
This is precisely where virtue framing becomes decisive. If disposable income were the only variable, traditional luxury would be booming alongside specialty food. It isn't. LVMH — the conglomerate behind Louis Vuitton and Dior — saw its fashion division's profits fall 13% across all of 2025.
Even cash-flush consumers need psychological permission to spend freely in anxious times. The premium food phenomenon isn't really about who can afford to splurge — it's about why food has become the thing they choose to splurge on.
And when a smoothie becomes a status symbol, it reveals something uncomfortable about economic security more broadly. Food prices have risen nearly 30% since 2019, outpacing the 23% rise in overall consumer prices, according to the Bureau of Labor Statistics. For a family stretching a tight grocery budget, $22 isn't a smoothie. It's dinner.
The need for control, the desire for identity, the comfort of virtue-coded permission — these impulses are universal. A single mother working two jobs feels the same craving for agency as the influencer filming her grocery haul. The difference is that the purchases capable of satisfying those needs are increasingly rationed by price. The justification only works if you can actually afford the indulgence.
What's really in the cart
The next time you reach for something a little more expensive than strictly necessary at the grocery store, it's worth pausing — not to put it back, but to consider what you're actually reaching for.
Chances are it isn't really about the product. It's about the feeling of making a deliberate choice when everything else feels out of hand.
A $22 smoothie is never just a smoothie. It's what people buy when they need permission to feel OK.
The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.