We did a little research into how dependant consumer goods companies like Unilever and Procter & Gamble are on sachets.

We learnt…

SACHETS HAVE BEEN THE PREFERRED FORM OF PACKAGING FOR OVER A DECADE

Euromonitor (2013):

Small sachets of brands like Sunsilk, Clinic Plus and Head & Shoulders continue to be extremely popular in India. Small sachets of flexible plastic up to 10ml account for 98% of unit sales of standard shampoo in 2013…

SACHETS CONTINUE TO DOMINATE

GlobalData (2021) estimated:

Flexible Packaging accounted for a share of 81.7% in the Indian haircare sector, in 2020

(Note, this is a broader measure than just shampoos and includes hair oil, conditioner, hair colourants, hair loss treatments etc)

IN INDIA, UNILEVER RELIES ON SACHETS FOR ABOUT 30% OF ITS BUSINESS

Times of India (May 27, 2022) talked about the ‘magic price points’ that sachets cluster around and said:

For HUL (Hindustan Unilever), almost 30% of its business comes from packs that operate at these ‘magic price points’. Also, roughly 30% of its portfolio is price-locked.

UNILEVER SELLS BILLIONS OF SACHETS A YEAR IN INDIA

Harvard Business Review (2016) said:

HUL itself sells 27 billion sachets a year

SACHETS REMAIN A KEY GROWTH STRATEGY FOR UNILEVER

Unilever management still openly talks about the importance of sachets and how they are using them to gain market penetration in various categories.

Some quotes from recent earnings call discussions:

Srinivas Phatak, CFO and Executive Director, Finance and IT at Hindustan Unilever

In foods and refreshments, our strategy to unlock growth in HFD (Health Food Drinks) portfolio is to drive category penetration. To this extent, we have doubled on our actions to improve accessibility in the HFD through the sachet portfolio. We launched the INR 2 sachet in Horlicks and Boost

…Again, from a penetration perspective, we are gaining more users, especially through the sachet portfolio and now as we have gone and introduced the rupee 2 sachet.

Source: March Quarter 2021 Earnings Call of Hindustan Unilever Limited (29th April 2021)

Ritesh Tiwari , Executive Director, Finance and Chief Financial Officer at Hindustan Unilever

And within that, to the point which you mentioned on the sachets, yes, both the INR 2 and INR 5 sachets, they are very critical for us to gain penetration. I mentioned earlier that the penetration of category of health food drinks is more like c. 25%, and it is lower in rural areas. There's a big job to be done for us, hence, the 3 role of INR 2, INR 5 sachet in enrolling new consumers with more trials is extremely critical, and we are exactly focusing on that.

Source: June Quarter 2021 Earnings Call of Hindustan Unilever Limited (22nd July 2021)