More isn’t always better and to your surprise, small packages are capable of fetching bigger benefits to consumers as well as retailers/producers. The sachet revolution led by Chinni Krishnan, an Indian, was where it all started! Urban consumers have always been the primary target audience for big brands but the real profitability lies in the rural areas. However, with less disposable income in hand, rural consumers were unable to buy bigger brands and that’s when the sachets/small packs popularized in India. These small packs allowed the labour class to try out big-multinational brands and experience luxury with their limited income.

But today, it’s a different story. Small packaging of products is now a well-thought marketing strategy used by brands to drive growth and expansion, to experiment and reach conclusions. Small packaging is a win-win product strategy for consumers as well as verticals in a supply chain- from manufacturers to retailers.

As a brand, an ideal situation would be to always be in the consumer’s consideration set. Small packs offer a definite opportunity ?for marketers by ensuring that their brands continue to remain in the consumers’ monthly purchase basket. Due to the lower price demanded by these small packs, it is easier for more brands to enter the consumer’s consideration set. These packs also trigger growth by delivering value for money to consumers as they are able to experiment with a new product with a little sum of money. Additionally, they help move the consumer to a price point that would be convenient for sellers to cater to as well as affordable to consumers. Offering products in smaller doses may also help a brand reach/discover a new segment of customers altogether. Priced at low invoice values, they result in less credit risk in the market while purchasing from wholesalers or distributors. While other benefits like the ease in the introduction of new variants and products come as a benefit, LUPs also tackle the challenge of limited retail space, effectively. They are able to occupy aerial space or little shelf space with more SKUs thereby giving the maximum return per square foot, even to small retailers. Approximately 14 lakh stores available in metros in India offer a huge opportunity in the form of aerial space (the phenomenon of small packs being hung on display usually near the point of sale) for small packs in addition to the shelf space inside the store.

However, the catch is that during external environment changes, small packs are the first to give in. For instance, when consumers started panic buying during the COVID-19 crisis, bigger packs of products were first to be hoarded and smaller packs were left behind. But on the other hand, with many urban households bearing the brunt of the pandemic and facing financial challenges, small packs gained salience in such urban households.

However, in favourable circumstances, consumers choose LUPs for the various benefits that they offer. Because of the convenience they provide, ‘on-the-go’ packets can be carried to multiple occasions of consumption. Consumers also get closer to fulfilling their aspirational needs through low-unit packs for various brands and categories. And like smaller retail stores, they also facilitate storage in smaller households where limited space is available.

Buying small packs is seen as a growing trend among SEC A and B households (33% v 24% national average) due to monthly purchases and frequency of shopping. It also seems to be a sign of affluence and displays a slightly more modern/forward consumer demographic.

Apart from the various benefits provided by these small packs, three factors that greatly drive the development LUPs are-

1. Where small packs are pivotal for the existence of a category- like snacks, instant noodles, biscuits, shampoos etc., mainly low involvement products.
2. Where small packs are growth levers- like coffee, toothpaste, washing powder etc., mainly habit-buying products that need to deliver value and drive consumption.
3. Where they are beginning to explore- like milk food drink, hair oil etc., products that require trials and aim at mitigating monotony.

The small-pack strategy is alluring and may work wonders for your brand but not every product and category can use it to its advantage. Getting your LUP strategy from the content weight to packaging design to its placement on a retail shelf and more, all factors contribute to a successful LUP offering.

Undoubtedly, small packs are here to stay and using them strategically can help brands expand and upgrade their markets extracting great benefits.