Business
From edibles to services: The sachet effect of Nigeria’s economy
In August 2023 Big Bull Rice maker, TGI Group, introduced Big Bull Gold, a premium milled parboiled rice offered in smaller, more convenient pack sizes to the Nigeria open at an affordable price of ₦100. This sparked a lot of reactions while some joked some were more worried than relieved as it shows the swindling level of the economy.
In November 2024 sachet rice resurfaced again amidst the hike in the price of the 50kg rice which cost ₦78,000 to ₦90,000 at the time, making it close to impossible for the Low-income households to afford rice and other needs with a monthly minimum wage of ₦70,000 (still not implemented Yet).
the most recent case of the sachet economy that sparked another uproar online is the introduction of the sachet Shortbread by the McVities, a British brand of biscuits and cakes that is selling at ₦300 to ₦350 for a sachet.
Sachet economy is a retail approach where small quantities of products are sold in disposable packaging, a trend that’s spreading from developing countries to developed nations. It originated in India in the 1970s and is now common in many emerging markets, including Nigeria and the Philippines. In Nigeria the origin of sachet economy dates back to 1994 with the Dil pure water followed by the Ajinomoto Seasonings that sold at 2kobo, this business strategy bled into the beverage industry with cowbell milk and choco taking the lead and almost pushing the beverage giant Cadbury out of the market at the time.
The sachet economy strategy is a win-win for both the manufacturer and the end user as for the manufacturers the sachet trend is driven by the desire to maximize revenue and capture market share, especially in industries with homogeneous products where competition is fierce and also at higher prices when compared to the value gotten by the consumer.
Sachet alcoholic drinks
While, on the part of the consumer the sachet economy means Smaller in size products which are far cheaper than the larger sized products.
From shampoo, detergent to food, beverages, services and even tech, the sachet economy has made essential products more accessible to millions of Nigerians, and manufacturers gain more in the stifling economy. In November 2017, StarTimes, a Chinese media and electronics company that operates in Nigeria introduced a daily? weekly subscription which was named pay per day cost N60 and N300 respectively although with fewer channels. Also, Telecom service providers have cheaper daily and weekly subscriptions for those who cannot afford the costly monthly options.
Insurance Companies have also adopted this strategy to create pocket-friendly insurance plans and on top of the list is the Reliance HMO with their ₦3500 per month plan and ₦42,500 per year plan. Also, other insurance companies that is on this list include Healthcare Partners Limited with a plan of ₦12,000 per year, Wellness Health Management Services Limited with a plan of ₦15,000 per year, Well Health Network Limited with a plan of N18,500 per year, Axa Mansard HMO with a plan of ₦20,000 per year, ₦12,000 for 6 months and many more.
Since 2015 Nigeria has experienced recession twice and currently, Nigeria’s economy is facing significant headwinds, with rising inflation, Currency devaluation, and a decline in GDP growth, sparking fears of a potential recession or worse deflation which will lead to reduced spending and investment.
Also, according to the most recent report from the National Bureau of Statistics, NBS, Nigeria’s inflation rate has hit a new high, reaching 34.80% in December 2024. This is a slight increase from the 34.60% recorded in November, with a marginal rise of 0.20%.
However, as the trend continues to grow, concerns are being raised about its sustainability and environmental impact. The widespread use of single-use plastics and non-biodegradable packaging materials has led to an increase in plastic waste, clogging waterways and harming marine life.
Also, the widespread use of the sachet economy has contributed significantly to pollution, resulting in choked waterways, clogged drainage systems, and the release of harmful microplastics.
The sachet economy, while offering affordability and convenience, has alarming environmental consequences, including polluting landfills and waterways, depleting resources, contributing to climate change, and releasing microplastics. Sachets also contaminate soil and groundwater, harm wildlife, and pose health risks to humans. Furthermore, they contribute to air pollution, accelerate climate change, and create breeding grounds for disease vectors. To mitigate these devastating impacts, it is essential to adopt sustainable practices, such as reducing single-use sachets, recycling, and promoting eco-friendly packaging alternatives.
Sachet water