KRISHNARAO BUDDHA
Immigration continues... to the United Snacks of India
Be it bhujia, chivra or the multi-named fried and spiced peanuts – they’re more than a match for potato chips on the tidbits smorgasbord
Urban areas hardest hit while rural sector holds steady as FMCG growth slows
FMCG sales growth has slowed down in both urban and rural areas despite price cuts. Factors such as heat waves, election-related restrictions, and reduced cash-buying have impacted demand. Analysts foresee a potential rural-led recovery in the second half of FY25, with expectations of muted value growth and potential volume growth for staple companies.
Mom & pop stores vs new kids: India's ubiquitous kirana stores have a new rival
Tech-enabled players running self-service outlets like Frendy, SuperK, and Kirana King are challenging traditional kirana stores post-Covid. These modern trade stores have digital apps for orders and sourcing, contributing 4% to FMCG sales and up to 10% in premium categories.
As new ad regime dawns, cos make over 5K avowals
Marketers in India have started implementing the self-declaration certificate (SDC) mandate for new ads since June 18. The ministry of information and broadcasting (MIB) directive mandated that all new print, TV, digital, and radio ads must have an SDC generated through the Broadcast Seva portal for TV and radio and the PCI for print and digital ads from June 18. While the SDC mandate is challenging for advertisers, it will not hinder the rollout of new ads. Brand marketers have generated over 5,000 SDCs for new print and internet ads through the Press Council of India's website.
IPL rights: Will consolidation rain sixes for broadcasters, or will it hit advertising run rate?
Broadcasting rights for the IPL, which are among the most lucrative in the country, are set to get consolidated from next year. Will this consolidation rain sixes for broadcasters, or will it impact the advertising run rate?
Your household shopping bill may not come down soon
Most consumer goods companies raised prices by more than a quarter in the past two years to offset rising costs under heads such as raw materials, supply chain and energy.
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FMCG sector: Rural demand growth for daily essentials outstrips urban sales
Rural markets grew 6.5% by volume in both December and January, and by 11.1% in February, according to executives citing NielsenIQ data. Urban markets, in comparison, grew 6.1% in December, 4.7% in January and 8.7% in February, data showed.
FMCG companies to limit B2B sales to level field for distributors
Leading consumer goods companies like Britannia, Dabur, Amul, and Parle are restricting sales to organized wholesalers like Flipkart Wholesale, Udaan, and Reliance Cash and Carry to avoid margin issues and cannibalization by traditional distributors. This helps them reach the vast network of kirana stores in India.
Business is booming in Ayodhya's kirana stores
Kirana stores in Ayodhya have stocked up 32% more products compared to last year, anticipating increased demand from the Ram temple inauguration. In contrast, orders placed by mom-and-pop stores with FMCG companies in India remained flat. The inventory of summer products like beverages has increased by 60%, while chocolates, packaged food, and branded commodities have gone up by 23-52%. UP is the largest market for FMCG companies, and Ayodhya has the potential for growth similar to Tirupati. The demand is expected to be driven by tourists and devotees.
Consumer companies do not want to leave distributors on margins
While most distributors earn fixed margins between 3-6% irrespective of sales, variables usually include additional margins on reaching defined sales targets. After piloting a 60-100 bps lower fixed margin to its distributors to 3.3% and raising variable margins by over 100-150 bps for nearly a year, HUL rolled out the structure across 110 top cities in October.
Weak rural demand set to hit consumer goods sales in Q3
Rural demand for daily household products and groceries has been challenging in villages, potentially impacting the overall consumer goods sector's volume growth. Rural volumes, which have been lagging urban growth for over a year, could either decline or remain flat due to inflation and the proliferation of smaller regional players. Upcoming general elections and a further reduction in inflation are likely to lead to a gradual improvement in FY25.
Balaji Wafers: How this Rajkot-based company is challenging the likes of Haldiram’s and PepsiCo
The Rajkot-based company posted sales of Rs 5,010 crore for FY23, a 24% jump compared to Rs 4,034 crore a year earlier. In comparison, Jubilant Foodworks that operates Domino's pizza, Dunkin Donuts and Popeyes restaurants clocked Rs 5,158 crore in sales in FY23 while Nestle's prepared dishes and cooking aids division of Maggi noodles, sauces, seasonings, pasta and cereals had annual sales of Rs 5,300 crore.
Cola, chips, beer and flowers emerge winners on day of World Cup final
Though the match result was disappointing for the fans with India ending on the losing side, it was a day of blockbuster sales for quick-service restaurants, pubs, bars and delivery platforms.
Surge in Q2 FMCG, phone, car sales may bring festive cheer
Sales of FMCG, cars, smartphones, and household appliances surged in the September quarter, driven by lower inflation, improved monsoon, price cuts, and offers. Passenger vehicle makers had their best-ever quarter, while the FMCG market grew 8-12% boosted by rural demand and price cuts. Sales of high-value items like televisions and refrigerators also increased. However, sales of mass segment and entry-level products have yet to recover. Rising crude oil prices are reversing the benefits of lower input costs, putting pressure on production costs.
A $1 billion bite: When it comes to crunch, desi snack packs are 'King' for Haldiram’s
In the year ended March 2023, Haldiram's snacks sales hit ₹9,215 crore ($1.1 billion), a 19% increase from a year ago, according to Nielsen data cited by industry officials. In comparison, PepsiCo's snack sales were ₹6,430 crore ($773 million) while Gujarat-based Balaji Wafers took in ₹5,296 crore ($637 million).
Price cuts, discounts trigger sales volume bounce for consumer companies
Consumer goods companies that have implemented price cuts or promotional offers are experiencing a surge in demand, with sales volumes increasing by up to 25% in certain categories. Parle Products, a leading biscuit manufacturer, achieved a 20% growth in sales volume after offering price reductions. Emami also saw volume growth in categories such as healthcare and pain management due to promotional offers.
'Consumer staples may stay costly this festive season'
The weakening of the rupee against the dollar has added to the woes of imported consumer staples like edible oils. Mallick said if the rupee weakens further, then the company will have to look into whether to pass on the increased cost on imported edible oil to customers.
FMCG companies fight for market share with 'agile' small peers
Smaller local players in India, such as Parle, Britannia and Hindustan Unilever, have entered the biscuit, tea, detergent, oil and snacking sectors, nibbling away at larger companies' market shares as the price of raw materials has lowered. During deflationary times, regional rivals give more value to consumers by offering extra grammage and are more nimble with product launches.
Demand for essential items at decade-high levels
Sales of daily groceries and essentials increased 8.5% YoY between April and June; the highest increase in a decade. FMCG sales was up 5.3% in rural markets and 12% in cities from a year earlier. However, consumption in villages only grew by 2%. Analysts believe the high increase in sales was largely due to the government offering free food grains, notably atta, which saw a growth of 8.5% during the quarter.
India Inc bets Bharat will script a recovery
For the country’s largest consumer goods company Hindustan Unilever (HUL), rural market volume turned positive only in the April-June quarter. It had declined in double digits in the past. Its rival, Dabur India, which has a significant share in rural markets, is also seeing signs of improvement.
Men step out most for buying grocery
Uttar Pradesh, Madhya Pradesh, Rajasthan and Bihar have the highest percentage of male shoppers, according to the data — 56-69%. By considering the cultural context, fast-moving consumer goods (FMCG) companies can better meet needs and preferences in different states, experts said. “Upon a quick comparison with the female literacy rate, a clear correlation emerges,” said Anshul Gupta, founder of Kirana Club.
Small-size sugar rush carries revenue to record in FY23
The sales of candies, toffees, and chewing gum bars in India broke records in the fiscal year 2022, reaching almost 40 billion units and growing the overall confectionery market by 13% to Rs. 12,127 crore. The surge in demand correlates with individuals preferring affordable sweet treats during Covid-ravaged economic conditions. Large companies such as Mondelez, Nestle, and Mars dominate the chocolate category, while regional firms account for over 35% of the confectionery market. Despite operating profit margins not expanding with revenue due to input costs' inflation, companies expect further growth opportunities due to increased innovation, direct reach, and affordable products.
IPL 2023: Will advertising slowdown play spoilsport?
India's biggest media property is staring at multiple headwinds as the rights holders seek to monetise the property, including a decline in advertising investment from new-age advertisers, a cautious attitude from corporate advertisers, and a surplus of cricket advertising inventory caused by consecutive India matches.
FMCG companies hope for a booster shot from Budget 2023
Companies said it will be the last full budget presented by the current federal govt ahead of the 2024 general election and will set the tone for the next 25 years for India at 100.
Retailers stock up on goods in hopes of robust sales during Republic Day
Industry executives said the stocking by the trade (also known as primary sales) has grown by 30-40% over last year when the Omicron wave had briefly impacted the economy, while even as compared to the pre-Covid 2020 levels it is up by 7-15%.
December cheer: Consumer goods demand rebounds sequentially
The value of fast-moving consumer goods retailed in December rose 1.4% from the last month, according to Bizom that analyses data based on orders at kirana stores. Electronics categories grew 8-10% sequentially, according to industry executives.
Rural slowdown mainly in the Hindi belt, patchy rains a reason, say companies
"We have seen credit pressure, liquidity pressure coming in rural business and more so in the rural heartland, which is more UP and Bihar. The problem actually got exacerbated by the monsoon also being a little patchy in those areas," Mohit Malhotra, CEO of Dabur, told investors.
FMCG sales dip in September as traders go slow on stocking
Sales of groceries had risen 6% month-on-month in August, reversing consecutive sequential decline in the past three months, according to the latest report by retail analytics platform Bizom. Companies will aggressively restock shelves this month during the run-up to Diwali which will translate into higher growth in October, it said.
Russia-Ukraine conflict: India Inc frets over spiking crude, input costs
Biscuits and confectionery maker Parle Products said the geopolitical situation is going to have a huge effect on crude oil prices and impact several industries as trade costs are bound to rise. "For the previous 7-8 years it (crude oil) had been below 100 dollars but today it has crossed the 100 dollar mark, impacting several industries in addition to the food industry.
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