Time to grow pack sizes in Mexico?
Pack size does matter in the FMCG market, but what size is the right size? Smaller sizes like sachets are a big trend in many emerging countries because they allow shoppers to enter new categories or to buy premium brands without compromising their overall FMCG spend. In case of economic downturn, smaller sizes are also useful to retain shoppers. However, big sizes are also a good way to offer better value for money. In mature markets where promotions are highly developed and loyalty is compromised, brands use them to ensure they take advantage as much as they can of every purchase decision. The question is: when is the right time to grow the pack size? The latest trends identified by Kantar Worldpanel in Mexico give some clues.
The case of Mexico
When the economic downturn arrived in 2009, shoppers changed their purchase behaviour and started choosing smaller sizes more often. Shoppers moved away from modern channels and visited proximity channels like mom and pop’s more frequently, where smaller sizes were more present. Even in supermarkets, smaller sizes, that implied a lower expenditure, were easily found.
Five years later, it may be the right time to grow again. Still, one third of the packs bought are small, but they have been losing importance in the last three years ahead of medium sizes. Big sizes are also growing but at a slower pace.
The medium size growth is driven mainly by value for money brands and among low income households in West, Southeast and North regions. Wineries, convenience stores, mini supers and wholesalers are the type of retailers taking advantage of this change in consumer behaviour
What can bigger sizes bring?
There is a big opportunity in growing the pack sizes in Mexico for both brands and consumers. Brands that opt to increase sizes can see their market share grow. The fewer times shoppers visit the store to buy a product, the fewer times they would be tempted by a different brand. In some cases, bigger packs can actually bring more consumption because the product is available in the fridge or cupboard, leaving more time to be picked up. And bigger sizes also benefit consumers that will get more value for their money.
The main challenge to move to bigger sizes may be in retail. Fabian Ghirardelly, Mexico Country Manager at Kantar Worldpanel, comments: “Retailers can do more to take advantage of the big opportunity that bigger sizes represent. In many cases, the definition of size is strictly related to product distribution in the appropriate channels, and very often it’s there where the main challenge to introduce bigger sizes lays. Bigger packs mean more business for retailers too and brands need to be assertive to show evidence of this more clearly”.
When is the right time to grow the pack size? The latest trends identified in Mexico give some clues