LEVERAGING THE POWER OF SMALL PACKS TO DRIVE GROWTH

• Small packs sustain growth momentum even in times of economic slowdown.
• However, demonetisation made a higher dent on small packs, as consumers kept their purse strings tight due to paucity of currency.
• North and West beat other zones and show higher preference for small packs.
• Small packs are as popular in metros as in rural markets.

DECODING SMALL PACKS

Small pack’ is a relative term, but it broadly refers to stock-keeping units (SKUs) across categories with the lowest few price points. Over the years there have been several attempts by various brands to introduce and sustain price points as low as INR 1, 2 or 3, but given the ever-increasing cost pressures, only the INR 5 and INR 10 SKUs have survived. For categories like carbonated soft drinks, ketchups, household cleaners, skin care and others that cannot operate at INR 5 or INR 10, low unit packs (LUPs) are available at marginally higher price points while continuing to deliver the benefits of LUPs. While t he jury is still out on whether profitability or small packs can better dri ve growth in the competitive market, small packs continue to lure consumers across all age groups and population strata. 

A Nielsen BASES study shows that innovations in the FMCG space that have small packs in their assortment achieve higher success, a clear indication that consumers are seeking small packs.

SHOPPER TRENDS SHOW OPPORTUNITY FOR SMALL PACKS

As per the 2016 Nielsen Shopper Trends report, “more consumers are increasingly buying less in total.” This indicates that small packs offer a definite opportunity for marketers by ensuring that their brands continue to remain in the consumers’ monthly purchase basket.