Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

TODAY´S NEWS

Size does matter in FMCG segment

Size does matter in FMCG segment

Author | Source: Business Standard | Wednesday, Dec 27,2006 9:19 AM

A+
AA
A-
Size does matter in FMCG segment

Specific pack sizes boost growth in certain categories.

Not so long ago, it was sachets and small packs that were driving growth across almost all the fast moving consumer goods (FMCG) categories. But with the market and consumer evolving, the scenario has changed.

Market research firm AC Nielsen has classified products across four categories depending on how fast these categories are growing and their overall contribution to the sector.

The high growth segment is divided into the Goliaths and Aspirants categories. While the goliaths, products like shampoos, biscuits and hair oils, have a high contribution to the sector, the aspirants, products like breakfast cereals, hair colours and baby massage oils, still don’t contribute much to the overall sector.

The other two categories are the ones on a low growth path. The Dwarfs, which includes products like chewing gums, perfumes and weaning foods, don’t contribute significantly to the sector, and the Stouts, products like soaps, beverages, chocolates and toothpaste, which though contribute highly to the sector, are on a low growth path.

In the aspirant category, it was seen that almost 45 per cent of all sales came from the larger pack sizes, with small packs contributing just over 20 per cent.

This is largely because products like breakfast cereals and diapers tend to sell better in the modern retail outlets.

V Karthik, associate director, AC Nielsen, pointed out that in the new retail formats, large packs tend to sell better as they lend themselves better to being displayed there. Also, most consumers shopping in a modern retail outlet prefer larger pack sizes, which is why the larger pack sizes sell better in these categories.

Similarly, when it came to the goliaths, product like biscuits, shampoos, hair oil and coffee, it was the mid-sized packs that contributed maximum to the sales.

Here, it was seen that almost 60 per cent growth came from the mid-sized packs, especially, in the north and east. Comparatively, about 20 per cent growth came from the small and large pack sizes respectively.

Depending on the consumption categories, certain pack sizes tend to sell better, said Karthik.

In the smaller categories like dwarfs, which includes chewing gum and perfumes, its difficult to determine a specific pack size, largely because of the nature of the products that make up the category.

“When it comes to basic consumption categories like packaged atta or refined oil, there is a tilt towards larger pack sizes. It will be a 70:30 in favour of the big packs,” said Karthik. This would be irrespective of the degree of penetration of the product, he added.

Meanwhile, the market could get further segmented in future as certain categories evolve further.

“Among premium products, there hasn’t been too much diversification into smaller pack sizes. The smaller pack sizes are effective in boosting consumption in both rural as well as urban areas,” said Karthik.

Tags: e4m

Write A Comment