Condom studybze final_report


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Belize Condom Study

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Condom studybze final_report

  1. 1. Condoms A review of the condom market in BelizeA custom report compiled by Euromonitor International for Options Consulting Services Ltd December 2010
  2. 2. TOC Table of ContentsIntroductionKey findingsFacts and figuresFinal thoughtsAppendixContact information 2
  3. 3. Introduction 3
  4. 4. Introduction Project ObjectivesOptions The core questions guiding research are:  What is the size of the overall market for condoms in Belize?  What are the leading forms of distribution (retail/non-retail)?  What are the key drivers, trends and future outlook in the market?  How is the supply chain structured for different types of condoms?  Point of sale audits, what condoms are on offer? How are they priced? How are they sold and marketed?Euromonitor International Euromonitor’s consulting team aligned with Options and PSI to develop a customized solution for the above questions The project methodology focused on Euromonitor’s experience utilizing the following techniques:  Retail store audits  Internal data/analysis collation & secondary research  Data validation via industry contacts  Transparency in sources, inputs and assumptions 4
  5. 5. Introduction Euromonitor Methodology Primary Research Trade interviews Store audits Secondary Research Syndicated data Trade associations Company sales Trade press 5
  6. 6. Introduction Project flow 1 2 3 4Baseline Primary Secondary Sizing Align with Annual Synthesis 45 outlets Options reports Published Modeling Align with PSI 210 products figures Realignment In-country with 20 interviews Articles analyst stakeholders 6
  7. 7. Introduction Primary research facts and figures Multi-pronged approach to project deliverables • Audited 45 stores in Belize City, Belmopan, and Punta Gorda Market sizes Robust Audit • Audited 210 products, tracking over 30 product attributes • 20 interviews with relevant sourcesComprehensive • Management-level interviews with Distribution Interviews government agencies, NGOs, retailers, clinics, importers, wholesalers and more • Involvement of key stakeholders Stakeholder (including government agencies) throughout the project Market Drivers Engagement • Open dialog with stakeholders • Synthesized interviews, stakeholder views, primary and secondary research Solid output • Forecasts built on stable foundation Data 7
  8. 8. Key findings 8
  9. 9. Key findings Commentary from key stakeholders Stockouts are a problem; distribution failures are the root cause. Free NGOs condom distribution is costly and unsustainable at the current large scale. Commercial sales are increasing, thanks to growing demand and Distributors increasing product awareness. The decline in free condom distribution has also helped sales growth. Retailers cite condom quality, availability and price as key success factors in the retail market. Retailers Retailers offering convenience (in the form of high-traffic locations and longer opening hours) are being rewarded. 9
  10. 10. Key findings Commentary from key stakeholders Aware of the poor image of free condoms and hopes the National Condom Distribution Plan will helpGovernment address this issue through re-branding and marketing efforts (i.e. packaging changes, marketing campaigns, etc). Monitoring of free condoms is not strong, producing less effective distribution strategies. Encourages Global MOH to increase its distributionorganizations capacity to facilitate tracking abilities. Continues to offer assistance (financial/technical) to achieve this. Marketing campaigns to promote increased awareness and personal health responsibility (such as Got It, Media Get It) have been successful in driving increased condom usage and should continue to be a focus. 10
  11. 11. Key findings Condom supply chain is a complex affair Commercial Condoms Socially- Marketed Free Condoms Condoms Official Unofficial Importers/ Importers/Wholesalers/ Wholesalers/ PSI/ BFLA UNDPDistributors Distributors PASMO UNFPA ("grey market") Ministry Convenience stores Distributors of Health Chinese/Indian Gas Stations Govt Health Clinics Stores NGOs Gas Stations Pharmacies NGOs Pharmacies Convenience Stores Others Others Consumers 11
  12. 12. Key findings Free condoms involve international NGOs • Free condoms largely depend on Free Condoms international aid. Most funding comes from the Global Fund. UNDP and UNFPA are the most important international organizations International sourcing free condoms in Belize.UNDP UNFPA • The MOH also sources condoms and oversees distribution. Free condoms are registered in the records of the MOH Central Medical Stores, prior to distribution to partner Government organizations. A portion of free condoms are also distributed directly to local NGOs. Ministry of Health • In addition to its own gov’t health clinics, the MOH also relies heavily on local NGOs in the distribution of free condoms. • Most serious obstacles to distribution are a Clinics/NGOs Govt Health Clinics lack of outlets outside of Belize City and poor transportation infrastructure NGOs • There are two main ways that consumers procure free condoms: as walk-in patients or through outreach programs. • NGOs target consumers through their Behavior Change Communication (BCC) Procurement programs, which helps them to identify vulnerable groups. PASMO is a leading NGO in this type of targeting. Consumers 12
  13. 13. Key findings Limitations of the free condom modelQuality• Free condoms suffer from an image of poor quality compared to socially-marketed and commercial condoms• This image has been created by a lack of branding, use of less attractive packaging (silver foil), and the simple fact that they are available free of charge, which causes Belizeans to value them less.Targeting• Coverage of Belize’s most vulnerable populations is limited by ineffective targeting methods in free condom distribution.• While the use of local NGOs in free condom distribution indicates a step in the right direction towards more effective targeting, there is much room for improvement in this area.Monitoring• Current monitoring systems also present an obstacle to more effective free condom distribution. They lack detailed information and reach throughout the entire chain and currently only measure large shipments, not specific use by geographic region and consumer segment.• These monitoring systems must be improved to increase coverage of the poorest/highest risk groups. 13
  14. 14. Key findings PASMO the main player in SM condoms Socially- Marketed • PASMO is the main distributor of SM condoms in Belize. It is the local partner Condoms of PSI, which supplies PASMO with the Vive brand. PASMO specializes in social marketing to reduce the spread of HIV Primary PSI/ transmission. PASMO BFLA • In 2010, BFLA joined PASMO as a supplier of SM condoms in Belize, NGOs launching the COOL brand of SM condoms. Distributors • Most SM condoms are purchased in commercial retail outlets, such as gas Gas Stations stations, pharmacies, and independent stores. Suppliers sell products directly to retailers or use distributors to reach these consumers. Distribution • Vive was deliberately removed from Pharmacies market in early 2009 as part of re- branding effort, but is expected to return in 2011 with a new image.NGOs Convenience Stores • In order to increase consumer access to affordable condoms, PASMO also distributes products through local Others NGOs, especially when targeting consumers outside of Belize City. The organization has also focused on non- traditional outlets like bars, hotels, etc. Availability • The removal of Vive from the market in 2009 has caused significant stockouts of SM condoms, since no other SM Consumers brand was on the market. This should improve by 2010-2011 with re-launch. 14
  15. 15. Key findings Undefined roles in commercial chain • There are two ways that commercial Commercial condoms enter Belize: official imports and Condoms unofficial imports. Official imports pay a Importers/ 12.5% tariff and are concentrated in the hands of a few companies. Unofficial imports enter without paying a tariff and take place Distributors through a myriad of Chinese/Indian traders. Unofficial Official Importers/Importers/ Wholesalers/Wholesalers/ • The three main importers/distributors in Distributors the formal market are James Brodie &Co,Distributors ("grey market") Madisco, and Santiago Castillo. They sell to a wide range of retailers, including independent stores, gas stations, and Distribution Convenience pharmacies, among others. They also sell directly to consumers and to smaller stores wholesalers. Chinese/Indian Stores • Consumer surveys indicate that most consumers are satisfied with the current availability of commercial condoms. Gas Stations However, without effective inventory strategies, many retailers suffer from limited Availability variety and stockouts, which suggests significant room for improvement. Pharmacies • No evidence of strong leakage of free condoms in the commercial market. Free condoms have a much poorer image due Others to a perception of low quality. However, commercial actors would like free Impact of Free condoms to be more specifically targeted at vulnerable populations to allow Condoms commercial sales to grow. Consumers 15
  16. 16. Key findings Procurement practices for small retailers Belize’s complex retailing environment complicatessupply chain management and increases theuncertainty of product supply in retail outlets. This isespecially true for small retailers, which hold strongimportance within the overall retailing environment.Below is a description of the procurement practicesused by small retailers in Belize City and those in theoutlying regions. Belize City • Small store owners generally go to wholesalers located in Belize City to pick up goods. • Another option is for stores to place orders with wholesalers over the phone and arrange their own transportation and delivery to their store. Regions outside of Belize City • Stores outside of Belize City, especially Chinese stores, usually are usually organized as a purchasing consortium in which case the larger importers/ distributors (such as Brodies, Madisco, etc.) will handle transport and delivery to a specified consortium member store for onward distribution to their members. 16
  17. 17. Key findings Pricing Analysis of Leading BrandsTrojan by far the most expensive brand Vive, the only socially marketed condom in 2009-2010, registered an average price ofUS$0.34, below market average (US$0.70) and below most popular brand, Contempo (US$0.47). Trojan in sole possession of high end market sales (US$1.31), while IDA (or “silver bullet”) isthe most common free condom in the market. COOL was launched in August 2010 and is the only other SM condom in the Belizean market.It was launched after pricing data was collected, but is priced at US$0.27 per condom. Average Price Per Condom by Brand (US$) Leading Brands Leading Brands without Trojan 1.40 1.31 0.80 0.75 1.20 0.70 0.60 1.00 0.47 0.75 0.50 0.46 0.45 0.80 0.44 0.70 0.40 0.34 0.60 0.47 0.46 0.30 0.28 0.44 0.40 0.34 0.28 0.20 0.20 0.10 0.00 0.00 0.00 0.00 17
  18. 18. Key findings Condom Shelf LifeMost brands have 3 year shelf life; low incidence of expired condoms Contempo is above average with 33.8 months shelf life; best in market is Erotim with 41.9months, worst is Casanova with 9.1 months. Only two brands were found with expired expiration dates: Contempo and Vive. Poorinventory practices contribute to retailers stocking expired products. Some reports indicate that free condoms are sometimes discarded at public events,contributing to wastage within free condom distribution. Average Shelf Life by Brand (months) 45.0 41.9 39.8 40.0 38.0 33.8 35.0 32.3 30.0 29.4 30.0 24.9 25.0 20.0 15.0 9.1 10.0 5.0 0.0 18
  19. 19. Key findings Analysis of Product AttributesLimited demand for value-added condomsValue-added condoms an option, but limited to a niche group of consumers, usually youngerconsumers between 18-24 years of age. While lubrication was a feature found in most condoms, flavors and colors were significantlyless prevalent. Flavors and colors are almost always available in an assortment, including such flavors aschocolate, vanilla, and strawberry and such colors as red and black. Magnum condoms were also present in many stores, but represented less than 8% of thesample products. % of audited condoms 10.0% 9.0% 8.0% 7.4% 7.0% 5.7% 6.0% 5.0% 4.0% 3.0% 2.2% 2.0% 1.0% 0.0% Flavored Colors Extra-large (Magnum) 19
  20. 20. Key findings Packaging AnalysisStandard packaging most prevalent Boxes of 3 plastic-wrapped condoms are most prevalent; this is the most common format forthe Contempo brand of condoms. Boxes of foil-wrapped condoms and large-format packages are also found, but less popularamong Belizean consumers. % of audited condoms, selected product attributes 90.0% 88.7% 84.8% 80.0% 70.0% 66.5% 60.0% 50.0% 40.0% 33.0% 30.0% 20.0% 8.8% 10.0% 3.4% 2.9% 1.5% 0.0% Box Pouch Other Plastic Foil 3 units 1 unit 12 units Exterior Packaging Wrapper Type Pack Size 20
  21. 21. Key findings Brand Presence in Retail OutletsContempo most prevalent brand in store audits Share of market presence concentrated in the hands of two main brands: Contempo and Trojan Vast majority of condoms required assistance for purchase; 70% of audited products were foundbehind the counter, compared to 4% located on store shelves. Frequency of brands found in audits % of audited condoms requiring % of audited products, by brand assistance for purchase 100.0% 77% 80.0% Trojan 28% Contempo 60.0% 51% 40.0% Chrome 9% 20.0% Lifestyles Vive 5% 0.0% Durex 3% 1% Casanova Erotim 1% 2% 21
  22. 22. Key findings Retail commentary highlights Price is the most important Market factor in purchase decisions. drivers Availability/convenience is also very important. Most retailers do not haveInventory well-developed inventory strategy strategies; they are more reactive than pro-active. Supply chain is both concentrated and fragmented:Suppliers a few large distributors, but also many Asian traders. 22
  23. 23. Facts and figures 23
  24. 24. Facts and figures Key assumptions underlie forecast growth • Relies heavily on international organizations for funding, especially the Global Fund. Most recent round of funding ended in 2009, causing a shortage in Government 2010, but is expected to be renewed for 2011-2012. • Developing “National Condom Distribution Plan” to help improve total market performance and create more defined distribution roles across sectors. • Continues to experience robust growth as it fills in for shortages in other sectors and improves overall marketing and distribution strategies. Commercial • Compound annual growth expected to reach 16% over the 2008-2012 period. James Brodie & Co continues to be the largest player. • PSI plays an active role in the market, helping to improve overall performance and coordination between sectors. PSI • In addition to helping commercial distributors, PSI is planning on an aggressive expansion of Vive, with most growth anticipated from Spanish-speaking Belizeans • In August 2010, decided to reduce their focus on free condom distribution due to unsustainable costs and a change in operations focusing on SM condoms. BFLA • Launched Cool, another socially-marketed brand of condoms, which should significantly improve consumer access to condoms and boost usage. • Benchmarked against global/regional figures where social programs existPer-capita use • Per capita pool is sexually active individuals (ages 15+). • Per capita condom use will increase into the future. • Free condoms have a poor image in Belize (low quality), which some argue could harm the adoption of condom usage in the country and prevent totalCrowding out market growth. • Stakeholders believe best use is for targeted, vulnerable populations. 24
  25. 25. Facts and figures Per Capita Condom ConsumptionUsage driven by commercial salesCommercial sector is the only sector to exhibit an increasing trend over 2008-2012, bolsteredby PSI’s market development activities with distributors. Drop in free condom and socially-marketed distribution contributes to significant decline inoverall per capita usage in 2010. Increasing responsibility for personal health expected to be main driver of usage by 2012. Per capita condom usage in the Belize by channel, 2008-2012 6.00 5.00 4.00 1.25 3.20 2.95 1.16 3.00 1.65 1.39 1.46 2.00 0.96 1.00 0.05 1.00 1.39 1.51 1.61 0.99 1.03 - 2008 2009 2010 (f) 2011 (f) 2012 (f) Commercial Social Marketed Free 25
  26. 26. Facts and figures Total Condom Market SizeCondom market rebounding by 2012Two major trends caused a significant decline in condom consumption in 2010: expirationof Round 3 funding from the Global Fund and Vive, the only socially-marketed brand, beingwithdrawn from the market due to re-branding efforts from PSI and PASMO.Consumption expected to rebound by 2010, led by the expanding commercial sector andre-launch of SM brands (Vive, Cool). Belizean condom market in volume (units ‘000s), by channel 900.0 800.0 700.0 220.0 600.0 200.0 510.1 482.0 500.0 290.0 400.0 250.0 233.9 300.0 152.9 164.2 9.2 200.0 259.0 282.5 100.0 233.1 157.3 168.3 - 2008 2009 2010 (f) 2011 (f) 2012 (f) Commercial Social Marketed Free 26
  27. 27. Facts and figures Sector Share of Total ConsumptionBalanced distribution expected by 2012In 2008, free condoms held the highest share, reaching over 62% of condoms distributed inBelize. However, by 2012, this share is expected to fall to 28%, as policy shifts towards a moresustainable market approach to condom distribution. By 2012, distribution is expected to be balanced, with no sector achieving more than a 37%share of total distribution. Belizean condom market distribution by channel, 2008-2012 100.0% 90.0% 28.2% 27.8% 80.0% 49.1% 70.0% 62.2% 59.2% 60.0% 35.3% 36.6% 50.0% 1.9% 40.0% 30.0% 18.6% 20.2% 49.0% 20.0% 36.5% 35.6% 10.0% 19.2% 20.7% 0.0% 2008 2009 2010 (f) 2011 (f) 2012 (f) Commercial Social Marketed Free 27
  28. 28. Facts and figures Contempo accounts for 1/3 of the market Market share by brand, 2010 • Well-known brand throughout Belize. • Exclusive distributor is James Brodie & Co Ltd, but a myriad of independent traders also import the brand into the country.Contempo • Rough Rider is the most popular sub-brand, Contempo followed by Wet n Wild and Bareback. • Benefits from its affordable price and its 34% superior placement within retail outlets. Others 51% (includes generics) • In terms of brand awareness, Trojan is just slightly lower than Contempo. • However, its high price limits consumption to higher-income consumers. It is the sole Trojan premium condom brand in Belize. Trojan • Main distributor of Trojan condoms is Santiago Castillo, but again there is notable Lifestyles 6% imports from independent traders. Vive Chrome 4% 2% 3% • Government distributes “generic” • Prior to 2010, Vive was the only socially- condoms along with other marketed condom in Belize. contraceptives, referred as “silver • In 2009, the brand was withdrawn from the market so that it could be re-branded. PSI Other bullets” due to their being wrapped in Vive expects to re-launch the brand in 2011. foil. There is no evidence of these condoms leaking into private sector. • Prior to being withdrawn from the market, Vive brands • Other global brands exist in the market was among the most recognizable condom (Lifestyles, Chrome, etc.), but are not brands in Belize for its good price-quality ratio. very popular. 28
  29. 29. Facts and figures Small retailers best in commercial sales Distribution share by outlet type, 2010 Non-Traditional • Consists of independent grocery Outlets stores, convenience stores, and 1% neighborhood shops. Small • Chinese/Indian shops are estimated to hold 18% of sales from this outlet Retailers type. • Are the main distribution point for commercial and socially-marketed Small retailers condoms in Belize. 28% Non- (includes generics) Commercial Commercial Outlets Pharmacies • Accounted for 9% of total condom Outlets 9% 50% Gas stations distribution in 2010. 49% 6% • Natural outlet for condoms due to Wholesalers their specialization in health-related 4%Pharmacies products. Supermarkets • Higher presence of more premium Others brands i.e. Trojan, compared to 1% 2% other retailers. As a result, tends to have the highest prices. • Free condoms are mainly distributed • 3rd most important retailer of through local NGOs because they commercial condoms in Belize, have better access to target achieving a 6% share in 2010. populations and it reduces the burden • Shell One Stop is the most popular Non- on government agencies. Prior to 2010, BFLA was the most active Gas gas station for condom purchases. • Late hours and convenient locations Commercial distributor. Others include PASMO, YFF, and UNIBAM. Stations make these outlets attractive to Outlets • However, BFLA recently announced it consumers. Moreover, consumers no longer is distributing free condoms, already use these outlets for other which has therefore shifted more convenience purchases (snacks, distribution through gov’t health etc.). clinics. 29
  30. 30. Final Thoughts 30
  31. 31. Final thoughts Key Learnings from Belize’s Condoms Market • Free/subsidized condoms are NOT cannibalizing commercial condoms.Commercial • However, they are preventing a more sustainable and vibrant market for commercial and socially-marketed condoms from taking off, which ultimately leads to lower condom penetration in Belize. • Tax evasion is prevalent among smaller traders bringing condoms in fromInformality Mexico, so there is little information regarding this segment of the market. • This study estimates that about 15% of commercial sales come from these traders. • One of the major problems facing Belize is steady availability to the consumer. This problem is prevalent in all three sectors. In free condoms,Availability the lack of reliable outlets hampers distribution, while in the commercial sector, retailers practice poor inventory management and therefore do not increase stock at appropriate times. • Recent campaigns targeted at improving personal health care andSupply and increasing awareness for condoms have succeeded in driving growth of condom usage in Belize. Demand • As PSI and commercial actors ramp up to meet this growing demand with desirable products, the industry expects continued growth in the future. • Distribution is still largely concentrated in small retailers and this is expected to continue over the forecast. Pharmacies will also remain anDistribution important outlet. • However, both commercial and NGO actors are trying to expand distribution to non-traditional outlets in order to increase consumption. This includes gas stations, bars, hotels, clinics, and NGO offices. 31
  32. 32. DisclaimerInformation in this report researched by Euromonitor has been extracted from areport produced by Euromonitor International Ltd (“Euromonitor”) solely for itsclient Options.Euromonitor does not have any control over the particular purpose(s) for whichits information or intelligence is used. Euromonitor has agreed to permit thereproduction of extracts from Euromonitor’s report on condition thatEuromonitor disclaims and excludes any and all liability (whether arising incontract, tort or otherwise) for any loss of any nature suffered by any party as adirect or indirect result of any error in or omission from the Extracts, as a director indirect result of the use of any of the Extracts or of making any businessdecision, or refraining from making any such decision, in reliance or based whollyor partly on any data, expression of opinion, statement or other information ordata contained in the Extracts. 32
  33. 33. Contact details: Philip Buchanan Consultant Tel: +1 312-922-1115 x Mike Jozwik Head of Consulting (Americas) Tel: +1 312-922-1115 x 8238