The last mile, end zone for FMCG

New ideas create better quality of life and wealth

Rizal Philippines
March 8, 2017

For a leading FMCG food company which has over $2 billion in sales (double about  a decade ago), their focus is not on supermarkets and modern convenience store (others like upscale food companies) focus on the said outlets.  This company is even doubling coverage of sari sari store, whom they think is the battle ground the frontier for FMCG.

For the end zone, last mile, the product manager would like to see a trike, or motortrike that carries all the sachet to the farthest flung barrios.  Reminds us of such outlet I saw in Cavinti, Laguna. An ambulant vendor sells plastic wares and all stuff P20.00 only on such trike,   He is equipped with a PA to call the attention of the residents.  There are variations of having fresh fish, meat and vegies for the ulam requirements of household

They are the ultimate channel to the barrios and far flung areas of the Philippines, which this FMCG wants to exploit and dominate in the future
Who ever said these were low techs and crude,  Even multinational professionals are paying attention.

Wall Selecta and Magnolia have been using this for vending their ice cream retail

NU 3 - Anna Mae Dela Cruz fewer choices, not more for FMCG

Good afternoon sir:)

Here's my NU paper for today (below).  I'm sorry it's a bit long!

Stay safe and dry!

Anna

Anna Mae Dela Cruz

S10

New spending habits

I've decided I need to apply my approach to durable goods to the way I spend on fast-moving consumer goods (FMCGs).  With durable goods—laptops, cellphones, athletic equipment, etc—I am uncompromising.  Gadgets must have so-and-so RAM, storage space, megapixels, weight, etc, and none of the features I don't need and don't want to pay for.  Running shoes must be of a certain elevation, material not too thick, sole strong enough for a rough outdoor running track, etc, etc.  I guess I'm a bit anal but this is also a widespread and well-documented behavior; durable goods are studied purchases because their prices compel consumers to think twice, thrice, or make a long list of requirements then think things over a fourth time.  Not so with FMCGs and other cheap, daily-use products.  I'm more flexible with food, toiletries, and the like—and I blame a good portion of my spending and weight gain to that.  

Today, for example, I absolutely had to have some junk food.  I had a clear and singular craving:  Chef Tony's popped corn chips in white cheddar.  But I wasn't willing to go all the way to the mall for one bag so I headed over to a nearby supermarket to hunt for the next best thing.  I decided I wanted potato chips and that, because my last encounter left me wanting more, I'd grab a can of Pringles.  I told mom I'd be back in 10 minutes, in time for lunch.  

I got back an hour later.  First, there are 3 different sizes—the snack pack, a small can, and a large can.  A difference in the number of chips would've been an easy decision to make except I noticed that the small can also has a significantly smaller diameter than the large can, and a difference in the size of the chip does matter (to me).  Then I noticed that the small cans don't sport the same range of flavors and varieties that the large cans do.  The large cans have multigrain Pringles in a variety of flavors (Original, Farmhouse Cheddar, etc.) while the small ones only have the multigrain variety in one flavor (Classic).  Which leads to me to the issue on flavors:  Is Original different from Classic?  Is the flavoring on multigrain Farmhouse Cheddar different from that used on non-multigrain Cheddar Cheese?  My friends also recently noticed that Pringles is phasing out its salty orange Cheddar Cheese in favor of a milder yellow Cheddar Cheese (and that you'll never know if you got the orange Cheddar Cheese or the yellow Cheddar Cheese until you open the can).  That gives us a grand total of 3 different Cheddar flavors.  We haven't even talked about the other flavors yet—sour cream and barbecue of course, but also a range of non-traditional ones like pizza or dill pickle or (oh my god) what's the difference between the teal blue can of Seaweed Pringles and the identically-colored can of Salt & Seaweed Pringles?  I typically only get plain-flavored chips, so I figured I was safe from the burden of choice and will just go for a can of Pringles Light and be done with it.  But apparently they've phased out the Light variety and now have either reduced salt or reduced fat.  Has it occurred to them that the kind of consumer who'd want less salt would also probably want less fat???  So now I have to pick between a less salty but oily chip that will give me sore lips and a bloated belly or a salty but less oily chip that will lend me an extra pound.  What's more, each type of flavor and type of reduction was not uniformly available for different sizes and different varieties.  With 3 sizes, 2 varieties, 2 reductions, and at least 10 flavors, there are literally 60 possible combinations of preferences, only around 20 of which are available.  The consumer must figure out what he wants across all 3 categories then check whether the chosen trifecta is available in the first place.  It blew my mind.

By the end of it all I was so hungry I started eating my Pringles at the check-out counter.  Ten chips in, I wasn't happy.  I still want a bag of Chef Tony's popped corn chips in white cheddar.  So the lesson of the day is:  If it's not exactly what I wanted, I shouldn't buy it.  Sometimes, the best way to protect my wallet and my waistline is to let my OCD run wild.  And perhaps this is one reason why consumers today are becoming more and more particular with the products they buy, and therefore the cacophony of choices companies present them with.  But Steve Jobs was right:  Consumers don't want endless choices.  Macs all come in one color, in a maximum of 3 varieties each clearly suited for a different kind of user, and they are a hit.  As develop our own new products/services, a reflection on our own consumer behavior could lend us a valuable insight:  People don't want a thousand choices.  They want a few, simple ones that get it right—whether in love, life, or potato chips.  3