Package Versus Price

Variations in the size of packaging is an option increasingly used to meet the market demand for cheaper products.

Thursday, April 12, 2012

Driven by competition, rising food prices and a loss of purchasing power by large groups of consumers in many markets, food processing companies are adjusting the size and presentation of the packaging in order to keep their products attractive.

An article by Hitler Cigarrista in Capital.com.pa has relevance for the entire Central American region.

He cites the example of Nestlé which has reduced the size of a traditional can of its evaporated milk brand Ideal so as not to raise the price. A new brand was created, Amanacer, whose price is lower than Ideal. Regarding cereals, packages have begun to be used which allow for a price of between $1 to $1.25 in supermarkets and grocery stores, that is, for the less affluent segment, reports Capital.com.pa.

The executive vice president of the multinational, Paul Bulcke, notes that this strategy was conceived for emerging markets.

In another example, the Mexican funded company Coca Cola FEMSA launched a tiny plastic bottle of Coca Cola, cheaper for consumers than traditional presentations.

For its part, Industrias Lácteas Estrella Azul, a member of the FEMSA group, is promoting a new plastic container with leche De Oro milk, which has been called "Litron", [Big Liter] since it contains a liter and several additional ounces of Grade A milk instead of the usual liter that comes in a carton.

"However, the president of the Union of Industrialists in Panama (SIP), Juan Francisco Kienner explained that of all these marketing strategies the best results in industries which are relatively rich, such as Panama, are yielded from those products which provide consumers with additional free product and that small and cheap packages work best in poor markets," adds Capital.com.pa.



More on this topic

The Bottled Water Market in Costa Rica

April 2013

More and more companies are becoming involved in the importation of bottled water, a total of 32 brands of this product flood the supermarkets.

Demand is growing for bottled water by Costa Ricans, who in 2010 consumed 25.2 liters per capita per year, a figure which in 2012 came to 26.7 liters.

The Beer Market in Panama

April 2012

Brewers have reasons to celebrate: per capita consumption grew from 77 to 80 liters in 2011 and production increased by 5%.

Beer is the preferred alcoholic beverage in Panama, with its production having grown by 5.1% (above the average of 2% of the rest of Latin America) in 2011, reported Capital.com.pa.

Coca-Cola FEMSA Completes Acquisition of "Grupo Industrias Lácteas"

March 2011

The Mexican Corporation Coca-Cola FEMSA announced it has completed the acquisition of Panama's "Grupo Industrias Lácteas", parent company of "Estrella Azul", "Conservas Panameñas" and "Plásticos Modernos".

This is Coca Cola's first foray into the milk and dairy industry, which is one of the largest and most dynamic segments of the non-alcoholic beverages market in Latin America.

Coca-Cola FEMSA to Buy Panamanian Company

October 2010

The Mexican group Coca-Cola Femsa has signed a preliminary agreement to acquire all the shares of Grupo Industrias Lácteas.

This agreement includes a commitment of exclusivity in negotiations, subject to government approvals, authorizations and a complete corporate legal, financial and operational audit.

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