Belize Condom Study

1. Condoms
A review of the condom market in Belize
A custom report compiled by Euromonitor International for
Options Consulting Services Ltd
December 2010

2. TOC Table of Contents
Introduction
Key findings
Facts and figures
Final thoughts
Appendix
Contact information
2

3. Introduction
3

4. Introduction Project Objectives
Options
 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. Introduction Euromonitor Methodology
Primary Research
Trade interviews
Store audits
Secondary Research
Syndicated data
Trade associations
Company sales
Trade press
5

6. Introduction Project flow
1 2 3 4
Baseline 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. 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 sources
Comprehensive • 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. Key findings
8

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. Key findings Commentary from key stakeholders
Aware of the poor image of free
condoms and hopes the National
Condom Distribution Plan will help
Government 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 distribution
organizations 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. Key findings Condom supply chain is a complex affair
Commercial
Condoms
Socially-
Marketed Free Condoms
Condoms
Official Unofficial
Importers/ Importers/
Wholesalers/ Wholesalers/ PSI/
BFLA UNDP
Distributors Distributors PASMO UNFPA
("grey market")
Ministry
Convenience stores Distributors of Health
Chinese/Indian Gas Stations Gov't Health Clinics
Stores
NGOs
Gas Stations Pharmacies
NGOs
Pharmacies Convenience Stores
Others Others
Consumers
11

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
Gov't 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. Key findings Limitations of the free condom model
Quality
• 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. 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. 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. Key findings Procurement practices for small retailers
 Belize’s complex retailing environment complicates
supply chain management and increases the
uncertainty of product supply in retail outlets. This is
especially true for small retailers, which hold strong
importance within the overall retailing environment.
Below is a description of the procurement practices
used by small retailers in Belize City and those in the
outlying 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. Key findings Pricing Analysis of Leading Brands
Trojan by far the most expensive brand
 Vive, the only socially marketed condom in 2009-2010, registered an average price of
US$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”) is
the 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. Key findings Condom Shelf Life
Most 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 41.9
months, worst is Casanova with 9.1 months.
 Only two brands were found with expired expiration dates: Contempo and Vive. Poor
inventory 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. Key findings Analysis of Product Attributes
Limited demand for value-added condoms
Value-added condoms an option, but limited to a niche group of consumers, usually younger
consumers between 18-24 years of age.
 While lubrication was a feature found in most condoms, flavors and colors were significantly
less prevalent.
 Flavors and colors are almost always available in an assortment, including such flavors as
chocolate, vanilla, and strawberry and such colors as red and black.
 Magnum condoms were also present in many stores, but represented less than 8% of the
sample 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. Key findings Packaging Analysis
Standard packaging most prevalent
 Boxes of 3 plastic-wrapped condoms are most prevalent; this is the most common format for
the Contempo brand of condoms.
 Boxes of foil-wrapped condoms and large-format packages are also found, but less popular
among 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. Key findings Brand Presence in Retail Outlets
Contempo 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 found
behind 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. 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 have
Inventory 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. Facts and figures
23

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 exist
Per-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 total
Crowding out market growth.
• Stakeholders believe best use is for targeted, vulnerable populations.
24

25. Facts and figures Per Capita Condom Consumption
Usage driven by commercial sales
Commercial sector is the only sector to exhibit an increasing trend over 2008-2012, bolstered
by PSI’s market development activities with distributors.
 Drop in free condom and socially-marketed distribution contributes to significant decline in
overall 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. Facts and figures Total Condom Market Size
Condom market rebounding by 2012
Two major trends caused a significant decline in condom consumption in 2010: expiration
of Round 3 funding from the Global Fund and Vive, the only socially-marketed brand, being
withdrawn from the market due to re-branding efforts from PSI and PASMO.
Consumption expected to rebound by 2010, led by the expanding commercial sector and
re-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. Facts and figures Sector Share of Total Consumption
Balanced distribution expected by 2012
In 2008, free condoms held the highest share, reaching over 62% of condoms distributed in
Belize. However, by 2012, this share is expected to fall to 28%, as policy shifts towards a more
sustainable 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. 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. 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. Final Thoughts
30

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 from
Informality 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 and
Supply 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 an
Distribution 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. Disclaimer
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report produced by Euromonitor International Ltd (“Euromonitor”) solely for its
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data contained in the Extracts.
32

33. Contact details:
Philip Buchanan
Consultant
Tel: +1 312-922-1115 x 8279
philip.buchanan@euromonitorintl.com
Mike Jozwik
Head of Consulting (Americas)
Tel: +1 312-922-1115 x 8238
mike.jozwik@Euromonitor.com