Round-Up - NPD: Let’s Get Slim: Mini Can Packaging Invigorates Soft Drinks and Beer

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The race for volume in the drinks industry is drawing to a close, with smaller packaging options coming to the fore, particularly in beer and soft drinks. Tom Vierhile from Datamonitor investigates.

Bigger is usually better. Until it isn’t. Just ask ex-New York City mayor Michael Bloomberg.

While Bloomberg’s effort to curb beverage serving size inflation and fight obesity by banning large size soft drinks in New York City fell flat, portion sizes are beginning to shrink on their own as soft drink and beer makers warm up to mini and slim cans and bottles.

This embracing of down-sized packaging like 7.5oz mini-cans marks a sea change in a soft drink market that has always equated success with volume growth. But, larger package sizes aren’t the profit generators they used to be. Coca-Cola itself made that point in a presentation to the analyst community late last year, saying its traditional 2-litre and 12oz packages were “massively promoted” and locked into the “almost commodity-oriented part” of the soft drink market.

Reduced size packaging may be a way out of this commodity price trap.

Indeed, Coca-Cola North America president Sandy Douglas pointed out in November that more focus on lifting “price per occasion” and less on simply growing volume could unlock future revenue growth. Douglas put the “price per occasion” of a 12oz can of Coca-Cola at US$0.31, a figure representing the average price of the serving size at retail through the majority of 2014. That was well under the $0.40 “price per occasion” for the company’s 7.5oz mini can over the same period. Converted to price-per-ounce, the mini-can trounced Coca-Cola’s regular size can, delivering $0.053 per ounce versus around $0.025 per ounce for the 12oz can.

That said, not even the most optimistic marketer is likely to believe that mini packaging can replace traditional size soft drink packaging. But, mini drink packaging may be able to preserve - and even grow - consumer usage occasions while keeping consumer guilt in check.This balancing act reflects the choices consumers would prefer to make when managing body weight and have relevance across the entire soft drink spectrum, including fruit juices and drinks.

Consumers would much rather cut down on serving sizes to lose or maintain weight than utilise any other type of weight management approach, like tracking calories or increasing physical activity. According to the International Food Information Council Foundation’s 2014 Food & Health survey, 81% of US consumers were either “somewhat likely” or “very likely” to eat smaller portions to manage weight compared to 60% that expressed support for substituting lower calorie foods for full calorie alternatives. 

Celebrating the “little things in life that make us happy” without being guilty about the consequences strikes an emotional chord with consumers, and was the theme of a clever advertising campaign for Mini Coca-Cola undertaken by Ogilvy & Mather Berlin. Last year, the ad agency placed mini kiosks - complete with diminutive Coca-Cola vending machines - in five German cities. The machines vended mini-cans of Coke while the manned kiosks celebrated everything small by selling miniature versions of other products. About waist high in height, the kiosks were a resounding success, selling an average of 380 mini cans of Coke a day; nearly triple the turnover of a typical Coke vending machine.

More recently, Coca-Cola pushed this “small treat” positioning by enlisting fitness and nutrition experts to blog and write about how a mini-can of Coke represents a “sensible snack.” Timed to coincide with American Heart Month (as designated by the American Heart Association) last month, the tactic backfired on the company, when it became clear that many posts were “sponsored content” and not spontaneous expressions of support from the fitness and nutrition world. 

Controversy aside, alcohol beverage makers are also looking at reduced-size packaging to invigorate sales. A year ago, Heineken USA rolled out 8.5oz slim can packs for its flagship beer, citing triple-digit sales growth in this package size in prior years. The effort seems to have paid off, because Heineken recently announced a doubling of its investment in the “slim can” segment in 2015 through increased advertising, point-of-sale displays and the launch of a 24-pack of the slim cans. Heineken also cited the new can’s strong appeal with ethnic consumers including Hispanics and African-Americans, suggesting another benefit of mini packaging: The mini can is a point-of-entry for new consumers that aspire to luxury brands.

Heineken’s apparent success with mini-can packaging may also have to do with addressing a major negative issue with existing beer packaging, one that goes beyond calorie control. Warm beer is bad beer, and beer packed in a slim can is less likely than beer in a 'regular' size can to warm up before it is consumed. This enhances the consumption experience while minimising product waste – a win-win for Heineken and consumers alike. Heineken has made this benefit a major component of its slim can marketing, noting that beer stays “cold till the last drop” in the packaging format.

Other alcoholic beverage brands are “getting small” and experimenting with variations of the “mini” theme. In the US, MillerCoors has offered 10oz cans of its “limited edition” Coors Light Summer Brew citrus radler, which is described as “a refreshing blend of Coors Light and refreshing lemon flavors.” 

Brooklyn, NY’s Sixpoint Brewery recently added 12oz “sleek” cans of Bengali beer (a departure from its existing 16oz cans). In France, Kronenbourg launched 1664 "Mini-Canettes" of beer (each 25cl – roughly 8.45oz per can). Carlsberg UK is even extending the package format to alcohol-free beer, launching San Miguel 0.0% Limon in a slim-line can in the UK.

Smaller size packaging may work especially well for beer and other packaged alcoholic beverages as a way to manage alcohol consumption. Nearly one-third of alcohol beverage consumers globally (31%) said that they paid a “very high amount of attention” to ensuring they do not drink too much alcohol in general, according to a 2013 Datamonitor Consumer global survey.

Smaller size packs may be a great way to achieve this goal without avoiding alcoholic beverages entirely.

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