Homes with kids driving sales of fast moving consumer goods

PRA-Cebu President Go says study results evident in Cebu’s retail market

Households with young children are driving sales of fast moving consumer goods (FMCG) in the Philippines, a recent study showed.

This also holds true in Cebu, according to Robert Go, president of the Philippine Retailers Association – Cebu Chapter.

“The explanation behind this is that young families with young children have a lot of expenses. Growing up, you have to spend for food and clothing. Usually, parents give a lot of attention to their children,” Go said in a phone interview on Tuesday.

Kantar Worldpanel

Kantar Worldpanel, a global expert in shoppers’ behavior, recently reported that Filipino homes with children aged 12 and below contributed to almost three-quarters of total FMCG sales in the country from July 2017 to June 2018.

According to Kantar Worldpanel Account Director Diwa Manila, around 68 percent of Filipino homes have kids.

This translated to more than 15 million homes that spent P36,562 each this year.

This amount is higher by P1,100 compared to the same period two years ago.

At the same time, she said that kids from these households have the “pester power” in terms of FMCG products in their homes.

FMCG

FMCG are defined as products that sell quickly at relatively low cost.

These items include milk, gum, fruits and vegetables, toilet paper, soda, beer, and over-the-counter drugs like aspirin.

When sought for comment, PRA-Cebu’s Go said that these findings were also evident in Cebu with a population in general composed of the younger ones.

Food

Since there are a lot of young children in households, parents have to spend for food and drinks which include infant milk that is consumed by children up to ages 1 and 2.

“I notice more of this in the more provincial areas because they are more hand-to-mouth. When you go to the province, majority of their purchases in the supermarket goes to food which goes to their family and children,” said Go, who is also the president and CEO of Prince Retail.

With this, he said most households in the provincial areas would not anymore be able to spend on other products like vanity items including cosmetics.

Middle-aged housewives

The study further showed that middle-aged housewives aged 35 to 54 have accounted for half of the FMCG sales in the Philippines in the same period.

Despite the slight decrease from the 52.8 percent in 2016, this buyer segment contributed 50 percent or P393 billion to the country’s total FMCG sales.

“Health, convenience and hygiene were the top themes prioritized by Filipinos belonging to this segment. Brands that targeted middle-aged shoppers have also been using nostalgia and advocacies to attract and convince them to spend more on their products,” Kantar Worldpanel said in a statement.

Healthy foods

According to Manila, healthy food and beverage products were experiencing growth in the Philippines this year.

FMCG sales of categories communicating health-related benefits registered a 5 percent growth, while Filipinos’ spending for these products per trip increased by 10 percent based on a compound annual growth rate from 2016 to 2018.

Their data also showed that cultured milk, yogurt and soy milk were among the fastest growing categories for Filipino health buffs.

“The Philippines has a projected population of over 106 million according to the Commission on Population. This presents a huge challenge for brands to re-examine and understand the local buyer segments,” Manila said in a statement.

She noted that FMCG brands should be able to stay connected and updated on what Filipino shoppers are looking at and what they are looking for.

“Brands must be fast enough to act on the evolving shopping behavior of Filipinos, especially with the rise of technology and digital influences, in order to grow their market share,” Manila added.

TAGS: consumer, fast, goods, homes, Kids, Moving, sales