Contrary to popular belief, the fast-moving consumer goods (FMCG) segment in Egypt is booming, largely due to exponential growth in the snack and drink categories. In fact, the strength of these two areas has helped prevent signs of general weakness, stagnation or recession after the 2011 Egyptian revolution. The growth has also dramatically offset the impact of declining sales in the personal care and toiletries markets, driving the whole FMCG industry toward double-digit growth in 2013 (11% value growth).
Bigger is Better
One of the ways snack and drink manufacturers are gaining ground is by offering their products to Egyptian consumers in larger quantities and economy packs. This trend is most evident among salty snacks and soft drinks, and manufacturers are capitalizing on the popularity of newly introduced larger potato crisp packs and larger-sized cola cans.
And it looks like bigger is better for everyone. Manufacturers are growing their sales, and thrifty consumers are getting a bigger bang for their buck. The larger 355ML soft drinks (compared with traditional 330 ML) can and the L.E 5 and L.E 3 big packs (compared with traditional L.E 1 pack) also give consumers the advantage of quantity.
When the Price Isn’t Right
Making changes to existing products can be tricky, and consumers aren’t always receptive. Egyptian consumer expectations, for example, weren’t met when manufacturers made changes to certain personal and home care products. The introduction of liquid detergents, for example, came with higher prices—a significant factor for price-conscious consumers. Price is also an imperative consideration as many consumers shift toward lower-tier brands with less expensive rates when indexed to the detergents category. Prices among bathroom soaps have also been rising, which has negatively affected sales and inspired consumers to shift to less-expensive brands.
Meeting the Growing Appetite for Size and Value
Egyptian consumers are focused on both price and quantity—creating an opportunity that confectionary products can build on, much like the makers of salty snacks and beverages have. On the other hand, new innovations in personal and household industries have pushed price points upward, making it difficult for manufacturers to win with consumers, given the weakening purchasing power of many Egyptians.