Larger packs, affordable prices to drive sales for packaged food companies

Packaged food companies are ramping up their larger packs strategy by increasing production capacity, launching new variants of ‘Family Packs’ or even reducing prices of bigger packs to make them more accessible to consumers.

At a time when out-of-home consumption channels have been badly hit, impulse food categories such as beverages, snacks and chocolates are particularly leveraging on the trend of consumers upgrading to larger packs to drive sales.

PepsiCo India is introducing its new 1.25-litre PET packs at more affordable price point of ₹50 for select beverage brands across regions. In pre-Covid times, the 1.25-liter PET bottle was available at ₹65 for a beverage brand like Pepsi. A spokesperson for PepsiCo India said, |“These large packs will be accessible at an affordable price point of ₹50 to make the stay-at-home times more special. These packs will be available at all modern and traditional retail outlets and e-com platforms in the coming weeks."

Family packs

To meet growing consumer demand of family packs for Yippee! noodles, ITC has introduced large multi-unit packs and have also ramped up capacity to cater to the demand for ‘Family Packs’ of the brand. Similarly, it is witnessing "unprecedented surge in demand " for family packs for its biscuits brand Sunfeast . Even for its snacks brands Bingo!, the company said it is witnessing growing demand for ₹30 and above price points

Hemant Malik, Divisional Chief Executive, Foods Division, ITC Ltd, said, “We are witnessing higher adoption of larger packs in the home snacking categories given that out-of-home food and beverage consumption occasions have become almost negligible. There is an increasing preference for the ₹10 and other larger packs. This shift is a result of certain factors including higher levels of consumer anxiety, lack of out-of-home moments and reduction in the frequency of shopping trips.”

“This trend is likely to continue even after the pandemic and ITC will continue to focus on larger packs especially across channels like e-commerce, Modern Trade and Independent Self Service Stores,” Malik added.

Oliver Mirza, Managing Director & CEO, Dr Oetker- Indian Subcontinent, said, more and more consumers are experimenting with food to prepare dishes like sandwiches, burgers, wraps, pizzas and pasta with FunFoods range of sauces and spreads. “Our mayonnaise sales show larger packs grew 50 per cent faster than the category. Looking at this trend, we recently launched a 400g veg mayonnaise pack to enable an easy transition for consumers upgrading from the standard 250g pack. In Peanut Butter, the mid-size jar (340g) consumers are upgrading to a 400g jar, whereas the buying frequency did not change.”

Despite challenges due to the lockdown, the chocolate companies too have been witnessing strong demand for higher priced packs. Kalpesh Parmar, General Manager, Mars Wrigley India, said larger packs of its chocolate products priced at ₹100-150 are aiding the company's chocolate sales in metros.

Meanwhile, Herjit Bhalla, MD, Hershey India, said the company will be sharply focusing on its larger pack portfolio as consumers are looking for more value-for-money and reducing shopping trips.

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