Namkeens give chocs a licking

Namkeens give chocs a licking

Author | Source: The Economic Times | Monday, Jun 13,2005 7:52 AM

Namkeens give chocs a licking

The higher disposable income with the Indian consumer seems to be clearly reflected in the purchasing patterns of fast moving consumer goods (FMCG) products. The top ten fastest growing categories which have emerged for the year ended March 31, '05, are dominated by mid to premium product categories like branded snacks and commodities like refined oil and atta replacing categories like chocolates, beverages, packaged pure ghee and vermicelli.

Namkeens, refined oil, batteries, biscuits, hair oils, scourers, shampoo, mosquito repellents and packaged atta are the top ten fastest growing segments.

The top 10 categories include categories like grooming, household care, personal care and foods. The overall FMCG market grew by 6% as per AC Nielsen estimates. While namkeens recorded a growth of 34.3%, refined oil grew by 22.6% and batteries grew by 18%. Sujit Das Munshi, executive director, AC Nielsen, South Asia, said that the overall market growth shows a broad-based recovery.

“The top ten categories includes multiple areas of the product basket. Health and fitness has also driven consumption patterns. The urban lifestyle and consumption behaviour seem to imitate that of the developed countries. The intensive promotional support and the overall vibrancy in pricing and packaging in these categories have aided growth,” he added.

Analysts say new categories with relatively lower penetration levels are growing faster than highly-penetrated (over 80%) categories like toothpaste, soaps, detergents etc. CK Ranganathan, CMD, CavinKare, said that the overall market showed an optimistic trend and companies which innovated faster have been the beneficiaries. “Companies are finally understanding rather than dictating consumer needs,” he said.

The Rs 48,000-crore Indian FMCG sector has revved up into the fast lane in calendar year '05 and is gaining momentum.

Currently, the FMCG growth is more urban-led, say industry majors although the rural markets also have looked up. Mid-sized companies like Dabur, Marico, Parle Products, J&J, Godrej Consumer, P&G and others are leading growth rates backed by innovation and 'guided distribution' strategies.

Senior industry officials say that the emergence of new growth sectors have aided the growth of disposable income. “The sensitivity of rural demand to rainfall or agricultural production has weakened substantially given the rising share of non-farm income.

The share of non-farm income has risen and has been primarily driven by manufacturing, hotels, restaurant and communication sectors,” said the CEO of a leading foods multinational company. While small packs and sachets are driving growth across categories, the price cuts of the large packs has also helped growth.

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