Make size matter
In part one of our Market Watch series, we explore why rightsizing products has become vital for manufacturers, as well as the factors that are driving this trend globally.
Lifestyle changes have played a major role in defining how the packaged food and beverage industry evolves. And it is no different when it comes to rightsizing products – with manufacturers offering consumers the choice of buying a product in their preferred pack size. But what is driving these consumer preferences? And how are manufacturers responding?
A global view
After speaking to SIG representatives from around the world, we found demand for formats and sizes are polarised based on product categories. Furthermore, meeting these demands with flexible options has helped manufacturers in most regions to retain and grow their market share, especially at a time when both buying power and consumption habits have been impacted by the COVID-19 pandemic.
Why small sizes still rule
Small sizing has been big for some years now, owing to the rise of on-the-go consumption and demand for single-serve products. But with the world having limited mobility and many consumer groups confined to their homes, why is small sizing still relevant?
One of the primary reasons is affordability. Cost plays a major role in the prevalence of small-sized packs in many markets. In regions such as India, South America, Europe, Middle East and Africa, the shift to small sizing is driven by the need to keep a product within an affordable price range. Reaching a magic price point can be the differentiator for brands in India, for example, where a 125 ml carton recently launched by SIG is already proving popular within the fruit drinks and nectars segment.
The relation between product categories and pack volumes is a well-established factor. Smaller pack sizes have already been popular in product categories that are ready to drink, such as flavoured milk, juice, and even protein drinks. But now premium brands in some regions, such as the Americas, are offering smaller volumes in other categories – like condensed milk, cooking creams and even plant-based creamers – to retain the quality-conscious but price-sensitive consumer.
“Flavoured milk saw a decline in sales in the last year with schools closed. However, lowering the pack size from 200 ml to 150 ml gave a boost to this category as parents were able to indulge kids within a price range.”
Aline Silva
SIG Combibloc, South America
Pack size perception and the associated value are also important drivers in the popularity of smaller packs. For example, when a manufacturer in the MEA region recently introduced a 150 ml carton with a marginal price difference compared to its 200 ml carton, the 150 ml offering became the bestselling pack size in that category. Shape of packs play an important role in perception too, and consumers in many regions equate taller packs with more volume. So, many manufacturers are offering varying volumes in packs of the same height with only a minimal price difference.
Other factors that continue to drive the small sizing trend are convenience and a desire to prevent food waste – especially in regions where families are small or there are many single-member households, as in China and Western Europe. Consumers in urban China, for example, prefer small-sized packs for both food products and beverages owing to their small families and busy lifestyles.
When big is better
Upsizing in certain categories, like milk, is a unifying trend across most markets. And in some of them, juice is included in this trend – sometimes at the cost of single-serve packs, as seen in Mexican and European markets.
With the rise of in-home consumption, 1 litre packs became the norm in these categories. Consumers started opting for even bigger sizes in some regions to ensure availability in light of interrupted supply chains. However, this trend does not seem to be driven solely by the pandemic in some regions.
“Though the pandemic accelerated this upsizing trend, preference for bigger packs of milk has been on the rise for almost three years now.”
Jesus Navarro
SIG Combibloc, Mexico
Flexibility for rightsizing
Even in regions where 500 ml was a popular size for milk, there has been a shift towards bigger packs – showcasing the importance of dairy in diets. Plant-based milks also continued to be popular in 1 litre packs, especially in Europe.
It is evident that price and convenience both play a vital role in small sizing. And this trend is likely to prevail. But it remains to be seen if the upsizing trends will also continue.
With fluctuating consumption trends, flexibility and agility become the key to capturing and retaining consumer segments, sometimes in the same product category. Anticipating and meeting the changing needs of consumers by offering them the right options can be a differentiator that helps earn brand loyalty.
“Flexibility helps manufacturers drive seasonal promotions. For example, you will find hollandaise sauce in 300 ml packs at the price of regular 250 ml ones during the spargel season in Germany. Such promotions not only help brands connect with consumers but are also instrumental in reaching higher sales targets.”
Grigory Vikentyev
SIG Combibloc, Europe
With multiple pack sizes, brands don’t need to underfill bigger packs to ensure affordability. Instead, they can target different consumer segments merely on the basis of volume. Take market requirements in the MEA, where children’s beverages tend to come in 125 ml packs, with the same products available in 200 ml packs for teenagers.
SIG’s wide range of pack volumes and flexible filling machines enable manufacturers to achieve this agility in their production lines as they can fill up to nine pack volumes on a single machine, taking only a few minutes to switch between volumes.
Join us on our journey as we continue to explore the trends in global markets in the next part of this series. Get our exclusive newsletter, SIGnals update, in your inbox.
- June 24, 2021