John

In recent weeks we've been conducting a range of tests to find out what consumers think about sachets and how using them compares to using the small plastic bottles we plan to use as part of our refill solution.

It's not even close. We were anticipating some reluctance in moving from familiar habits, but it seems using a bottle is simply a way superior experience. And for many consumers it’s a novel one too, since purchasing a shampoo in bottles is too expensive - for many people in the survey it was the first time they'd used shampoo this way.

We captured consumer attitude across a whole range of measures but this simple chart summarises the big picture…

A critical element in our refill solution is the (ideally enthusiastic) participation of kirana store owners. By some estimates there are about 15 million of these stores across India, most run by an individual or family.

Very roughly, there’s a kirana store for every 100-300 people, so it's rare to go far without seeing one.

The stores are remarkably space efficient, making sure to use every square inch to display or store product. Even in a very limited area you'll find a wide range of products across numerous categories.

There can be a strong bond of loyalty between the kirana store owner and their customers. Customers typically use the same kirana store for years and store owners often extend small amounts of credit to their customers.

A core element of our refill work is to bring about behaviour changes on the part of the consumer as well as the store owner. To understand better how storeowners think about all this, we conducted a number of in-depth interviews….

Another day, another set of product testers!

This time, it's a group of women who work looking after young children during the day….

As part of our effort to create our own shampoo brand, we undertook a range of testing with consumers in our target market.

In addition to interviews to learn how often they use shampoo, what they think about sachets, what factors weigh on their decisions etc., we also handed out a range of samples for them to test at home in bottles.

Here are some photos of testers at a municipal waste recycling facility receiving their samples…

India's plastic waste collection industry is remarkable, but it doesn't extend to sachets.

I saw this in action when I watched a waste picker in Mumbai. He diligently picked up plastic bottles, as well as plastic bottle tops but not the plastic sachets sitting right there. This is because sachets have no value – he can sell hard plastic to local aggregators for a small sum, but not sachets.

I discussed this with a manager of a plastic waste processing facility who stated the obvious, “No one bends down to pick up sachets”.

Of course, if companies that sell their products in sachets paid for their collection, they would be picked up. This happens from time to time, but it makes the sachet business uneconomic, so it’s only ever done as part of a marketing program.

One way to see who leads the shampoo sachet market, and causes the most pollution, is to sift through plastic waste and see which brands are most common.

We worked with our NGO partner in India, CARPE, to do this for one entire ward in Aurangabad, Ward 7, which is predominantly a low-income demographic with about 12,000 people

It's not fun work. First, plastic material must be separated from the general household waste. Then sachets of all forms, which covers foodstuffs, candies, shampoos etc., need to be put to one side. These sachets are then segregated further into shampoos and then these are segregated once again into respective brands. It's slow and dirty work.

This is what it looks like…

And the winner is...

At the end of this process we categorised the brands.

The winner, with nearly 1/3 of the market, is Clinic Plus from Unilever. Next we have Vatika from the Indian multinational, Dabur. And in third place we have Dove, also from Unilever.

In fact, Unilever has several brands doing impressively well in the shampoo sachet market. Group them together, and Unilever has nearly 60% of the total, easily beating all other competitors.

I had naively thought brands that sell in sachets would be up for working with us as we try to find and test an economically viable alternative. After all, the sachets they’re selling are causing a massive problem. Publicity and press coverage is universally negative and there are few good solutions on the horizon.

But I was wrong!

We have tried various approaches, from direct emails/InMails to the very top of some of these multinational companies, through to national brand managers, as well as approaches from NGOs and other concerned organisations.

Usually, our approaches are ignored. The best responses lead to a conversation that has warm words and perhaps promise of a referral that usually doesn’t arrive or if it does, it gets kicked into the long grass as we wait for operations/brand budget/managers etc to approve. The best we had was a request that we get back in touch once we've demonstrated our proposed solution works. Fantastic!

This is something of a problem for us because people love their brands. This is as true of low-income individuals as it is of wealthier people, and perhaps more so since if they are going to spend their limited income on something, they want to be very sure it works, and they can trust it.

To complicate things further, these consumers have been educated to expect certain things from brands, whether it is making their hair smooth and strong, or providing anti-dandruff treatment.

Given all this, we'd much prefer to test our refill-reuse idea with brand leaders in the shampoo market, such as Clinic Plus, or Pantene, or TRESemme etc. But no such luck.

It's hard enough to test an idea that requires behaviour change on the part of both the end user as well as the store, but to do it without a known brand is so much harder.

But this is where we are.

Time for Plan B - We’re going to launch our own shampoo brand!

(What could possibly go wrong?)

For decades, consumer goods companies have encouraged low-income consumers to purchase their personal care products in sachets. It's been an effective campaign and today they account for most of personal care category sales in low-income countries.

Consumers get the benefit of a trusted brand at a very affordable price point, typically one, two or four rupees each, that's about 1p, 2p or 4p.

Our goal is to match or beat this price point but do so with a refill-reuse solution. Technically this is a challenge, but a bigger obstacle may well be entrenched consumer behaviours.

Would consumers be amenable to trying a different solution? Would they switch brands as well as format? And if so, what mattered most to them, price, quality, fragrance? Lots of unknowns.

We conducted a range of consumer interviews and discussions to find out.

Encouragingly, we learned that while low-income consumers are brand aware and brand loyal, they would be prepared to switch and trial a new product in a new format given sufficient incentive. Result!

Amusingly, the two main worries about using a new shampoo are that it would stop the shine or make their hair fall out!

We need to learn about kirana stores, those small shops that still make up the majority of India's nearly $1 trillion retail economy.

Little is published about them. Here’s a few snippets from CBI Insights:

• The kirana store continues to represent 75-78% of total consumer goods sales in India, according to Ambit Capital estimates

• Estimates vary significantly, but there are 12-20M kirana shops in India
• Just over 90% of FMCG sales in India happen via kirana stores

We wanted different insights. Could we work with them on a refill solution? Would they be up for it? If so, what margin would they need to make? What space could be available? What would make their business run better or be more profitable?

We weren’t sure, so we went to find out. In recent weeks and months we've conducted interviews and demonstrations with a wide range of kirana stores and learned a lot about their willingness to pilot a refill reuse scheme, along with their various concerns.

it's been a productive and useful exercise.

And on that margin question, we learnt they typically earn about 20% on sachets. Our objective is to deliver a refill and reuse system that beats that without making the consumer pay any more.

Well over 70% of shampoo in India is sold in sachets, and by far the majority is sold through a vast network of independent general stores.

These stores range from someone sitting on a chair selling maybe 10 different products, to large stores with a wide range. Here’s a couple I saw recently…

You get them everywhere.

It seemed likely that a viable solution to selling products in sachets would be easiest implemented where people are already buying the products.

So rather than technology or product innovation or leveraging new channels, our focus became the general store and working out what could suceed there.

It’s entirely possible we have this wrong  and it may prove a terrible decision (wouldn’t be the first time!). Time will tell.