You’ve seen everyone talking about sachets this week. From Baileys Delight to Morning Fresh. This thread clarifies the pros and cons of “sachetisation” and identifies opportunities in the sachet economy.
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1/14
Why sachets? These sachets are a manifestation of Nigeria’s struggle—from low purchasing power to our credit gap. 83 million Nigerians in informal jobs make only around ₦1400 a day.
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2/14
PROS (3)
1)Cash management - Only 6% of the population have access to loans. Without credit, people can only buy goods and services that they can afford *right now*.
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1)Cash management - Only 6% of the population have access to loans. Without credit, people can only buy goods and services that they can afford *right now*.
3/14
2) Space - Low-income individuals can’t buy bulk items and take them home in the same way that the wealthy do. They just don’t have the space.
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4/14
3) Quantity control - it’s how most people manage their consumption through economic difficulties. With sachets, households could now control consumption by giving one sachet of milk to each child, for example.
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5/14
CONS (2)
1)Sachet trap – Buying sachets makes the poor worse off than the rich over time.
6/14
1)Sachet trap – Buying sachets makes the poor worse off than the rich over time.
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Imagine a 60 cl bottle for ₦140 and a pack of 12 for ₦1,200. If you buy the individual 60cl bottle 12 times, you will end up paying almost ₦500 more than if you could buy the 12 pack.
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7/14
The same is true for buying one sachet of powdered milk daily instead of buying a large tin. But the poor can’t afford it, so they are stuck in a trap where they end up spending more money in the long run than the rich do.
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8/14
2)Environment - “If you want to know what is really selling in Nigeria, look in the gutter by the road”.
While this is true, it also points to the large cost to the environment.
9/14
While this is true, it also points to the large cost to the environment.
9/14
The damage of the sachet economy to society is most likely more extensive than we can measure. Sachet packaging has made better quality products accessible to the poor, but they have also led to more waste
10/14
10/14
OPPORTUNITIES (2)
1) “Sachet finance” - Interestingly, we can also use the sachet model as a solution to our credit problems. Financial institutions can create smaller individualised products based on a person’s situation—just like the sachets.
11/14
1) “Sachet finance” - Interestingly, we can also use the sachet model as a solution to our credit problems. Financial institutions can create smaller individualised products based on a person’s situation—just like the sachets.
11/14
2) Recycling – Sachet recyclability is still less common other mainstream packaging. While bottles are usually separated and collected for recycling, sachets have a lower chance of being picked up. Especially when they still have remnants of the original product.
12/14
12/14
Thankfully there is an up and coming recycling industry taking shape in Nigeria. One firm is planning to collect 600 metric tonnes (300 million sachets) from landfill and divert them to recycling.
13/14
13/14
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