FMCGs count on premium, small packs in slow down

FMCGs count on premium, small packs in slow down

Companies  in the fast moving consumer goods market focus on small products as investment curbs increases. Around the same time, luxury customers are not being overlooked, with launches also lined up for them, on the sidelines of the Indian Industry Confederation's FMCGs summit in Mumbai on Wednesday, business standards mentioned.

          Through out the past two years alone, companies such as Hindustan Unilever (HUL), Nestle, Proctor and Gamble and Mondelez have launched all superior products over detergents, personal care and foods, even through the ratio of small packs in their businesses also increased.

          As per industry small packs within the products of the most companies in FMCGs has grown by 10-15% in the six months, targeted at marketing products as accessible as possible to consumers. The above way the companies ensure that there is some testing by people and therefore penetration,said Suresh Narayanan, chairman and managing director of Nestle India. A P&G spokesman said the company concentrated on superior products, brand contact, market execution and value to improve Indian growth.

          P&G also said that the introduction of premium models in personal care and washing was offset by the roll-out of more satchets, price reductions in laundry and the introduction of lower priced variants in women care. Researchers said the growth of small packs in corporations businesses is likely to accelerates as the downturn continues in the next few quarters.

          Nielsen, a market research firm, has already projected small-single-digit FMCGs market growth for the period October-December, saying this could decline in the coming months.

          FMCGs market growth has decreased steadily over the past six quarters from rates of 16% in July-September 2018. The growth of the FMCGs industry in October-December(2019) is now forecast at 3%. Although professionals say green shoots are starting to show in channels such as modern trade. Researchers said penetration and premiumisation, particularly in a slowdown, would still be the most important sources of growth for companies in the FMCGs sector.

          Ojha said firms like HUL are not cutting spending on ads due to the pressure to rein in spending. HUL has reinvested its profit in ads and product promotions over a 15 year period and the remainder in that market scope.