How Does Erewhon Get Away With Such Outrageous Prices?

Whether you're looking with curiosity or contempt, it's hard not to pay attention to the offerings at Erewhon Market. With its specialty food product selection, like $14 paleo granola and $20 raw milk, and its celebrity and influencer affiliations, the Los Angeles-based grocery store chain has grown into a cultural phenomenon far beyond the City of Angels. Erewhon has earned its title as one of America's most expensive grocery stores, but while market pressures tend to punish inordinately high prices, it appears that even groceries can be marketed like luxury items with some creativity. 

An item from Erewhon could cost four to five times as much as a similar item from shops like Trader Joe's, whose items often sell out, they're so reasonably priced. However, with the hidden costs of running such an upscale establishment, these high prices are not all that arbitrary. From its organic focus to the demographics and cache of its frequent shoppers, the rationale behind Erewhon's high pricing fits the brand it has carefully crafted for itself.

Though it undoubtedly comes with substantial product markup, the organic and specialty food items at Erewhon Market are also pricey because of how it chooses to source ingredients. Erewhon is a certified organic retailer, meaning at least 95% of its products meet USDA organic certification requirements. Organic production practices tend to be more labor-intensive and yield smaller amounts of food, making them more expensive to source. 

Additionally, many of Erewhon's items are classified as specialty foods, which are products made with quality ingredients in small batches. They also try to cater to niche diets, like the ketogenic or paleolithic diets, which use more expensive ingredients than those for a wider market. For an item to be certified gluten-free, for instance, it must be produced in facilities completely separate from any gluten-containing products to avoid cross-contamination, a cost-heavy endeavor. Specialty foods also intrigue shoppers with their novelty; products like wildflower honey and camel milk (yes, really) will definitely turn heads.

Erewhon's owners have purposefully pitched it as L.A.'s luxury grocery spot, and its high prices are a reflection of this branding. The company provides a high-quality shopping experience. From the sleek storefront designs to the perfectly presented products lining the shelves, the atmosphere of Erewhon is a premium feature in itself.

While Angelenos have long been familiar with Erewhon, the store's proximity to and association with celebrity culture contributes to its global cachet. Many stars have been spotted shopping there, and some have even partnered with the store to sell more products while building up their brand. Since 2022, Hailey Bieber's Strawberry Glaze Skin Smoothie (playing off her skincare brand and the smoothie's skin-enhancing ingredients) has been a bestseller at its "tonic bar."

Beyond being a curiosity stop for L.A. visitors, Erewhon positions itself as a high-end health food store for local shoppers. Its stores are strategically opened in high-income neighborhoods, where there is an entire market of people willing to pay these prices. For instance, Beverly Hills boasts a median household income of over $116,000 (per California Demographics), about 56% higher than the median income of the rest of the U.S. Erewhon caters to communities that have the disposable income for its goods. 

It is far from the only grocery store option in the area and far from representative of every store's pricing. Los Angeles boasts many amazing restaurants that might even be more cost-effective than a grocery trip to Erewhon.