Hoping that economy packs will do the trick in the current slowdown and drive volumes, leasing FMCG companies are rolling out small packs priced between R5 and 20 apiece across products. Keen to protect market share, companies are sharpening their marketing focus to promote low unit packs, especially in highly competitive segments. The cost-conscious consumer is being wooed even by companies like PepsiCo India and Nivea India.
Last month, PepsiCo India, makers of the Kurkure snack brand launched its flagship brand Quaker Oats in small 26 gm packs priced at R10. The company is also aggressively promoting its existing economy packs of Kurkure (R3) and Lays (R5) to fight competition. CavinKare is also selling its snack brand Garden in small packs priced at R3.
Nivea India, an affiliate of Beiersdorf is planning to introduce select brands in small packs in the next three months. ?With this move, we want to offer price options to consumers. Currently, we are working on this project,? said Rakshit Hargave, managing director of Nivea India.
According to Hargave, the company is expanding its distribution to reach out to smaller towns and cities in India. ?We are increasing the assortment and portfolio of our products to target diverse audiences,? he said.
After witnessing a jump in the sales of Amul milk powder in economy packs, Gujarat Cooperative Milk Marketing Federation (GCMMF) is expanding its production facility for small packs by 25%, said RS Sodhi, managing director, GCMMF. ?We have seen an increase of 15% in sales in our small packs for milk powder available at R5 and R10. Also, the demand for our Amul butter packs (20 gm at R50) has increased by 15%,? he added. Amul’s arch rival Nestle India is selling its dairy whitener brand Everyday packs at R5 and R10.
?With the economic slowdown and rising prices, consumers are now shifting to smaller economic packs to cut costs,? said Sodhi.
Like Amul, Duncans Tea, part of Duncans Industries, has witnessed a 15% increase in sales in the company’s economy packs in the last few months. ?We are gearing up to meet the growing demand for small packs. Consumers in the economy segment are sensitive to price points such as R5 and R10 and avoid crossing them. Otherwise, they look for alternatives,? said MC Appiah, chief operating officer of Duncan Tea.
In a slowing economy, Indian FMCG majors are apprehensive that the process of downtrading will gain momentum in the next few months. ?Hence, the companies are chalking out strategic plans to stop consumers from shifting to cheaper variants. As part of the strategy, they are selling some products in smaller, cheaper packages to meet consumer budgets constrained by the slowdown,? said an industry analyst from a domestic brokerage firm in Mumbai.
Like other FMCG majors, Cadbury India is aggressively marketing its economy packs for its flagship brand Bournvita priced at R25 (80 gm) Cadbury Dairy Milk Shots at R5 and R10.
?’Today, consumers have numerous options. Yet, they think twice before switching to cheaper brands. Cashing in on this sentiment, FMCG companies are beefing up their economy packs to retain consumers,? said a brand consultant based in Mumbai.
