current issue




Review of the Russian Beer Market
Research by the Company “Eventus Consulting”


Review of the Russian Chocolate Market
Research by the Company “NeoAnalytics”


Review of the Bakery Market in the Volga Federal District
Research by the Russian Guild of Bakers and Confectioners


Review of the Russian Market for Duck Meat
Research by the Company “LeoWing”


Review of the Russian Market for Margarine and Specialty Fats
Research by the Company “ID Marketing”


Branding in the Dairy Market
Research by Independent Experts


Review of the Russian Market for Mayonnaise and Mayonnaise-Based Sauces
Research by the Company “IndexBox”


Review of the Russian Market for Fruit and Vegetables
Research by the Company “Maprex”
Review of Russia’s Foreign Trade Market for Mushrooms
Research by Information-Analytical Company “VVS”


Packaging in the Russian Market
Research by “Labelmen” Branding Agency


19th Asia’s Food Innovation Exhibition “SIAL China”
28th International “Beer-2019” Exhibition and Fair


Review of the Russian Market for Eggs and Egg Products*
Research by the Company “IndexBox”

Package Downsizing Trend in the Food Industry

Research by Independent Experts
(Final part. Read the beginning in issue №7.2018)
Downsizing, namely lower package volumes compared with the commonly accepted standards for a given product, is one of the most efficient tools in introducing new products to the market. If a product is new, it means that consumers have not formed any specific expectations in regards to its characteristics. The first purchase is always a form of trial, and nobody would want to buy an unfamiliar product in large quantities. In introducing a new product, it is more reasonable to distribute the volume produced within a maximum number of packages and deliver them to the widest audience possible, part of which are to be attracted to regular consumption in the long run.
When it comes to volume changes concerning familiar goods, however, downsizing may indeed be perceived by consumers very negatively. Examples of unsuccessful downsizing include the case where the manufacturers of Toblerone chocolate in the UK reduced the weight of the chocolate bar by making gaps between its triangles larger, which sparked numerous complaints and harsh criticism among consumers. 
In practice, it is recommended to use downsizing one of the following ways:
1) a noticeable (25–50%) reduction in package size of a familiar product, based on situations of consumption and consumer demands, combined with a (not necessarily proportional) price reduction; examples include production of alcohol in 375 ml, 250 ml, and 100 ml containers. Rather than fully replacing products packaged at the greater volume with the new one in the smaller package, it is advised to place them on store shelves together for 1–6 months in order to monitor and evaluate sales of both products and make a conclusion on the cost-effectiveness of either format; 
2) a reduction in package size (insignificant included) combined with changes (improvement) in product qualities, aiming to present the product to consumers as new or upgraded. In this case reasons for changes in the package or product volume, their reduction included, may lie within both production factors and consumer trends. Let us examine the factors more thoroughly.
Production factors include:
* convenience for the manufacturer in terms of production and packing, storage, transportation, and shelving. One of the prime product examples in this respect would be grains, diverse in weight and volumes. Packaging various grains in bags of the same volume leads to the same bag type holding 900 grams of buckwheat, but 700 grams or wheat, and so on; on the other hand, if grains are packaged by weight, the resulting bags will be of different volumes, which would require equipment to be reconfigured, bags to be packed in boxes of different sizes etc. All this leads to growing costs and time losses, which goes against the interests of both the company and its consumers.
* raw material shortage. To less productive companies, it is often more profitable to package their products in containers of lower volumes so as to maximize the distribution network and actively attract new consumers. 
Consumer factors imply products being adapted to consumer tastes and lifestyles; they include: 
* situations of consumption, single-serve volumes, and daily consumption norms for a given product. The modern pace of life and snacks on the go make large packages inconvenient for consumption—in addition, the latter may also not meet individual tastes of consumer group members. Often, changes in size take account of daily intakes, or volumes which a consumer can manage in one take. For instance, containers of water, dairy products, or juices designed for kids aged 3 and above do not exceed 350 ml in volume. Even though 270 ml of yogurt are not enough for an adult male consumer, they are for a child;
* convenience and aesthetics of packaging design. This parameter is critical in packaging of products in PET containers. PET container production technologies allow for branding in both the label and the container itself, thus differentiating it through its unique shape or size. The modern slim bottle silhouette is designed for the generation leading an active and healthy lifestyle. In particular, milk and yogurt bottles, which are often criticized for reduced product volumes, have indeed become considerably more slim: said shape looks advantageous, more packages fit on a store shelf, and consumers of these products do not chase extra grams (which imply extra calories to them) anyway.
* shelf life. Today manufacturers pay a lot of attention to production hygiene and shelf life extension, but in certain categories, such as the dairy industry, consumers deliberately avoid choosing products with long shelf lives or in large containers exceeding volumes of single portion consumption for the very reason that they prefer fresher, newly opened products. Today, the optimal volume for whole milk product packages in small households is 0.6 liters, whereas in yogurts and other probiotic-enriched foods package volumes may be lowered to 100–180–220–290 ml, depending on sex and age of the main target audience.
Downsizing may be used in connection with product labeling: the smaller is the package, the less sugar, salt and saturated fatty acids the product in it contains. Package volume may also be connected with daily intakes of certain products, such as calcium, iodine or other healthy micronutrients. European experience shows that downsizing is considered one of the most effective and simple (to manufacturers) ways to meet state recommendations on lowering sugar content in products by 20%, against changes in product composition or development of products with lower sugar content to begin with. 
There is an opinion that the main problem of developed societies is not population hunger, but rather overeating and excess weight. Considering this, artificial reduction in portions is even beneficial—to the consumer, the manufacturer, and the state. By eating 10 grams less chocolate, the consumer will get less calories and sugar. Along with the confectionery industry, carbonated drinks are first in line in terms of sugar content reduction. Downsizing is relatively humane in this regard, as it does not lead to full product abandonment, but limits consumption reasonably.
Downsizing makes products more affordable to consumers without reducing their value, which would take place if discounts, sales and other promotions were used: consumers get used to buying with promos, and as soon as prices are back to the standard level, producers face sharp drops in sales. A more expensive product is typically regarded as higher quality but less affordable, due to a limited budget of a given consumer or views on prices of products in terms of their value. A cheaper product in a smaller package, on the other hand, is perceived as both more affordable and higher quality. 
Package size management may be beneficial in adapting product ranges to the specifics of various distribution channels or in orientation towards target audiences which differ in sex, age, or lifestyle. For example, in Europe, cigarette packs sold at bars contain 16 cigarettes as opposed to the usual 20 found in stores. For stores and home consumption, wine producers traditionally offer wine in bottles of 0.75 liters and above, whereas in restaurants, bottles of 0.375 liters, two times smaller in volume, have been getting increasingly popular. Provided a relatively small difference in price, consumers often opt for products at lower volumes, which generate higher taste expectations. Beer bottled at 0.33 liters is also mainly sold through HoReCa establishments and is not in high demand at stores. In addition, beer in 0.33 liter bottles is purchased by women more often, and so are beer-based cocktails, low-alcohol beverages, and carbonated drinks/(lemonades). Beverages in small containers are perfectly suitable for the active lifestyle as well as single-serve individual consumption, in particular by kids.
One of the directions of downsizing is secondary group packaging, when products in separate small packages are combined into one larger package. A small product package appeals to individual taste preferences of consumers as well as single-serve consumption of the product in its freshest form thanks to a freshly opened package. For instance, carbonated drinks tend to go flat fairly quickly upon being opened, losing their taste characteristics and often being left unfinished, which, in essence, equals consumers’ money being wasted. Group packaging takes account of all relevant consumption trends.
The only exception in the downsizing trend today is sunflower oil. This can be explained, firstly, by products of different manufacturers in the category being rather hard to distinguish to consumers; secondly, by high price elasticity (due to similar product characteristics across different manufacturers consumers tend to opt for the cheaper product); and thirdly, by long product shelf life. Rural residents often provide for themselves on their own in meat and dairy products. However, production of sunflower oil or flour is impossible at home, and therefore these are often bought in bulk for several months in advance, especially in remote households far from stores and malls. Demand for sunflower oil of larger consumer (not industrial) volume is also expressed by catering companies: unlike at large food enterprises, in the HoReCa segment products are handled by cooks, often women, to whom large containers are inconvenient due to their weight, whereas small containers are disadvantageous due to high costs and high consumption volumes; as a result, preference is given to medium container formats of 2–3 liters. 
In addition to the food industry, downsizing concerns other markets, such as household chemistry, as well as services and intangible goods. Downsizing is justified in the segment of detergents which people take with them on vacation, to business trips, or to sports activities. Said trend has been observed in services as well and includes trials of subscriptions, services or applications, which allow users to try new goods and decide rationally on future consumption with minimal risk and at a low cost. 
To sum up, reduced package volume or weight is not necessarily just a marketing move and can be a serious economic tool, financially justified and effective in terms of overcoming crises and contributing to prosperity and health of the nation. 

Ekaterina Shelavina,
Strategic Marketing Specialist