 "Always on the move")
In the year 2015 the Indian food and beverage (F&B) industry sat up and took notice of a rank outsider who disrupted the market on the back of a differentiated product, novel packaging and innovative marketing. With its unambiguous emphasis on 'look and feel' and 'ease of use', the brand in question - Paper Boat from Hector Beverages - was clearly aimed to take advantage of the growing on-the-go consumption habit among Indian consumers. The brand pushed the envelope beyond small size packs and sachets that are firmly established in the market.
"Consumers today lack time. The pace of life has taken away space from life. Consumers no longer have the time to enjoy a 300 ml bottle of drink at a retail outlet, have a small conversation with the seller as they step out paying for the drink. The hurried pace of life has ensured that increasingly people carry their drinks with them. And this is the reason why we are seeing an uptick in consumption on the go," says Debabrata Mukherjee, vice-president, marketing and commercial, India and South West Asia, Coca-Cola.
Coca-Cola offers a number of on-the-go consumption options to consumers. A few of these include Minute Maid Tetra Edge (200 ml), 300 ml and 400 PET packs for its sparkling beverages besides the 200 ml returnable glass bottles. Consumers pay for convenience, and this includes on-the-go convenience. And higher cost-per-serving does not seem to inhibit sales growth provided the product meets a genuine need.
According to industry estimates, on-the-go consumption accounts for about 30 per cent of total beverage sales and the number continues to grow rapidly. Neeraj Kakkar, chief executive officer, Hector Beverages, says, "Today, on the go or immediate consumption is an important aspect of F&B business. For us, the large percentage of sales happens on the go. Commanding huge consumption, F&B as a product category lends itself beautifully to on the go products."
FMCG company Dabur India too is betting big on on-the-go consumption market. "The company has introduced a 200 ml on-the-go pack of Real juices which is growing at almost three times the rate of the bigger in-home consumption packs. This growth is being driven by the fact that more and more consumers in India are today shifting towards healthier options for their families. Even school-going kids are taking these small juice packs as part of their tiffin," says Sanjay Singal, marketing head (foods), Dabur India.
As F&B companies introduce new variants to tap the opportunity offered by on-the-go-consumption, they are faced with some challenges on the design and cost front. For instance, Hectare Beverages has had to deal with unavailability of packaging machinery when it started out in 2012. Initially, the company had to import raw material from China and Japan.
Kakkar of Hector Beverages acknowledges that consumers have to pay higher for products meant for on-the-go consumption. He explains, "Serving consumers on-the-go is challenging because the rentals for on-the-go consumption product at, say, at an airport outlet is always going to be higher than the traditional retail point for a purely take-home consumption product." He adds, "Cost escalation of the final product on account of design is a one time cost and can be mitigated by an interesting mix of affordable raw material and machinery."
The price challenge for 'on-the-go consumption' products is more pronounced for firms such as Coca-Cola and Dabur that have a range of offerings in different package sizes unlike Hector Beverages which has adopted standard design and packaging for its beverages. "From an innovation point of view alone making multiple packs available in different sizes in the market is a cost intensive exercise. From supply chain perspective glass bottles come back and can be used multiple times. However, this is not possible in the case of cartoned drinks. Such packs are a low-cost proposition and do not offer the advantage of being used over and over again. So, to keep prices low, one has to continously work towards taking out any additional costs in the supply chain," explains Mukherjee of Coca-Cola.
Both Kakkar and Mukherjee agree that from a pricing point of view it becomes important for companies to adopt ergonomically designed and aesthetically beautiful products that are high on ease of use. For instance, both Coca-Cola's juices in carton packs and Paper Boat beverages come with a cap to facilitate staggered consumption and easy grip. In fact, Paper Boat has been designed as a light weight and sturdy product which is ideal for air travel and can be stored easily in a bag pocket without fearing breakage or leakage.
Outlining the importance of getting the pricing and distribution strategy right for 'on-the-go consumption' products, Singal, says, "Pricing plays a key role when it comes to driving demand for on-the-go products as they are more impulse purchase products. Since they also work as trial packs, right pricing plays a key role. Distribution is another key factor and companies have to work towards ensuring that these on-the-go packs are available across all points of purchase."
Challenges notwithstanding, Kakkar emphasises that India has a long distance to cover when it comes to on the go consumption as it is far behind on this metric as compared to global markets. according to him, India continues to be big on vendor-led formats. The country lacks the kind of culture prevalent in a country like the US where consumers have long got used to even a on-the-go Starbucks coffee. An average Indian consumer would prefer having her coffees sitting in a retail outlet.
But Dabur's Singal is optimistic. "Increasing health consciousness among Indian consumers has been driving demand for healthy products like packaged juices. Given the time-starved lifestyles that people in urban India have, consumers are increasingly looking at wholesome and convenient solutions like packaged juices, convenient breakfast and snacking solutions." He believes that going forward the market for on-the-go products can only grow and companies that innovate on this front will get ahead while those that don't will fall behind.
The typical Indian consumer has undergone a big change in the last few years, thanks to the increase in disposable income and shortage of mealtime. The same period has been marked by the growth of hypermarkets, discount stores and convenience chains, along with a preference for products that can be consumed on-the-go.
For the modern day customer, convenience is a key influencer, and it applies to consumption of FMCG products as well. This has implicitly resulted in a multidimensional shift in companies' approach to product packaging. On-the-go contributes to over 30 per cent of the share of wallet in the beverages segment. Coca-Cola has launched the Minute Maid Tetra Edge packs to target the younger segment in urban centres. In the sparkling drinks category, PET mini packs have been launched for Thums up, Sprite and Coca- Cola. For HUL, the Cornetto Mini ice-cream is a snacking option for the urban Indian customer. The company has been experimenting with unique vending options to boost its footprint and enhance the availability of the product category. Hence, the emphatic rise of on-the-go consumption has meant making radical changes to not only packaging, but also distribution.
The FMCG industry has moved well beyond sachets and micro packaging to cater to a clear preference for products that are convenient to consume on the go, with a move towards aseptic and retortable packaging. The benefits are obvious-convenience, freshness and longer shelf life of the product. Senior brand managers also say that on-the-go consumption has spurred impulse buying among target users. For people on the move, such products are cheaper substitutes to sit-down meals.
MANASWINI ACHARYA
Professor of Marketing & Dean (Placements & Corporate Relations) IMI, New Delhi
"Consumers today lack time. The pace of life has taken away space from life. Consumers no longer have the time to enjoy a 300 ml bottle of drink at a retail outlet, have a small conversation with the seller as they step out paying for the drink. The hurried pace of life has ensured that increasingly people carry their drinks with them. And this is the reason why we are seeing an uptick in consumption on the go," says Debabrata Mukherjee, vice-president, marketing and commercial, India and South West Asia, Coca-Cola.
Coca-Cola offers a number of on-the-go consumption options to consumers. A few of these include Minute Maid Tetra Edge (200 ml), 300 ml and 400 PET packs for its sparkling beverages besides the 200 ml returnable glass bottles. Consumers pay for convenience, and this includes on-the-go convenience. And higher cost-per-serving does not seem to inhibit sales growth provided the product meets a genuine need.
According to industry estimates, on-the-go consumption accounts for about 30 per cent of total beverage sales and the number continues to grow rapidly. Neeraj Kakkar, chief executive officer, Hector Beverages, says, "Today, on the go or immediate consumption is an important aspect of F&B business. For us, the large percentage of sales happens on the go. Commanding huge consumption, F&B as a product category lends itself beautifully to on the go products."
FMCG company Dabur India too is betting big on on-the-go consumption market. "The company has introduced a 200 ml on-the-go pack of Real juices which is growing at almost three times the rate of the bigger in-home consumption packs. This growth is being driven by the fact that more and more consumers in India are today shifting towards healthier options for their families. Even school-going kids are taking these small juice packs as part of their tiffin," says Sanjay Singal, marketing head (foods), Dabur India.
As F&B companies introduce new variants to tap the opportunity offered by on-the-go-consumption, they are faced with some challenges on the design and cost front. For instance, Hectare Beverages has had to deal with unavailability of packaging machinery when it started out in 2012. Initially, the company had to import raw material from China and Japan.
Kakkar of Hector Beverages acknowledges that consumers have to pay higher for products meant for on-the-go consumption. He explains, "Serving consumers on-the-go is challenging because the rentals for on-the-go consumption product at, say, at an airport outlet is always going to be higher than the traditional retail point for a purely take-home consumption product." He adds, "Cost escalation of the final product on account of design is a one time cost and can be mitigated by an interesting mix of affordable raw material and machinery."
The price challenge for 'on-the-go consumption' products is more pronounced for firms such as Coca-Cola and Dabur that have a range of offerings in different package sizes unlike Hector Beverages which has adopted standard design and packaging for its beverages. "From an innovation point of view alone making multiple packs available in different sizes in the market is a cost intensive exercise. From supply chain perspective glass bottles come back and can be used multiple times. However, this is not possible in the case of cartoned drinks. Such packs are a low-cost proposition and do not offer the advantage of being used over and over again. So, to keep prices low, one has to continously work towards taking out any additional costs in the supply chain," explains Mukherjee of Coca-Cola.
Both Kakkar and Mukherjee agree that from a pricing point of view it becomes important for companies to adopt ergonomically designed and aesthetically beautiful products that are high on ease of use. For instance, both Coca-Cola's juices in carton packs and Paper Boat beverages come with a cap to facilitate staggered consumption and easy grip. In fact, Paper Boat has been designed as a light weight and sturdy product which is ideal for air travel and can be stored easily in a bag pocket without fearing breakage or leakage.
Outlining the importance of getting the pricing and distribution strategy right for 'on-the-go consumption' products, Singal, says, "Pricing plays a key role when it comes to driving demand for on-the-go products as they are more impulse purchase products. Since they also work as trial packs, right pricing plays a key role. Distribution is another key factor and companies have to work towards ensuring that these on-the-go packs are available across all points of purchase."
Challenges notwithstanding, Kakkar emphasises that India has a long distance to cover when it comes to on the go consumption as it is far behind on this metric as compared to global markets. according to him, India continues to be big on vendor-led formats. The country lacks the kind of culture prevalent in a country like the US where consumers have long got used to even a on-the-go Starbucks coffee. An average Indian consumer would prefer having her coffees sitting in a retail outlet.
But Dabur's Singal is optimistic. "Increasing health consciousness among Indian consumers has been driving demand for healthy products like packaged juices. Given the time-starved lifestyles that people in urban India have, consumers are increasingly looking at wholesome and convenient solutions like packaged juices, convenient breakfast and snacking solutions." He believes that going forward the market for on-the-go products can only grow and companies that innovate on this front will get ahead while those that don't will fall behind.
Manaswini Acharya
The typical Indian consumer has undergone a big change in the last few years, thanks to the increase in disposable income and shortage of mealtime. The same period has been marked by the growth of hypermarkets, discount stores and convenience chains, along with a preference for products that can be consumed on-the-go.
For the modern day customer, convenience is a key influencer, and it applies to consumption of FMCG products as well. This has implicitly resulted in a multidimensional shift in companies' approach to product packaging. On-the-go contributes to over 30 per cent of the share of wallet in the beverages segment. Coca-Cola has launched the Minute Maid Tetra Edge packs to target the younger segment in urban centres. In the sparkling drinks category, PET mini packs have been launched for Thums up, Sprite and Coca- Cola. For HUL, the Cornetto Mini ice-cream is a snacking option for the urban Indian customer. The company has been experimenting with unique vending options to boost its footprint and enhance the availability of the product category. Hence, the emphatic rise of on-the-go consumption has meant making radical changes to not only packaging, but also distribution.
The FMCG industry has moved well beyond sachets and micro packaging to cater to a clear preference for products that are convenient to consume on the go, with a move towards aseptic and retortable packaging. The benefits are obvious-convenience, freshness and longer shelf life of the product. Senior brand managers also say that on-the-go consumption has spurred impulse buying among target users. For people on the move, such products are cheaper substitutes to sit-down meals.
MANASWINI ACHARYA
Professor of Marketing & Dean (Placements & Corporate Relations) IMI, New Delhi