Spending on premium food and drink will top £20bn a year by 2012, says IGD.
This represents growth of 7% a year - more than twice that of the overall grocery market - with the strongest growth in retailers' premium own label ranges, locally and regionally sourced products, Fairtrade and organics.
One in every £8 flowing through the grocery tills would be spent on premium products in five years time, predicted IGD.
"The provenance of food products is one of the big drivers of premium grocery sales," said Gavin Rothwell, senior business analyst at IGD. "Products that can demonstrate quality and clarity of provenance are well placed to prosper."
The UK market for premium products is currently worth £14.6bn, up from £12.8bn last year. Total grocery sales this year would amount to £133.3bn .