Latest FMCG Updates - ToI

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Latest FMCG UpdatesSource: TOI 06th Dec10


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Growing Demand for Brands in Rural

Certain growth statistics have shattered themyth that the rural consumer is content withunbranded or mass-end products alone and

gives a strong indication that rural marketconsumption has picked up and is acceleratingfaster than urban markets.

This has led to their changing theirconsumption pattern.


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Gone are the days when the rural consumer

was content with using mustard oil and plain

soap. Today, he/she is seeking special branded

products for daily skin and healthcare needs.Rural consumers across income segments are

showing a marked propensity towards

spending on premium high-quality products,which are backed by strong brand values,

says Sunil Duggal, CEO, Dabur.

Growing Demand for Brands in Rural


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Confectionaries

The demand for cream biscuits gone up in rural markets.

The sale of instant noodles is growing nearly twice as fast in

the rural market compared to the urban one.

Variety biscuits (creams, cookies) are growing significantly

faster than glucose even in rural markets. They are taking

away significant consumption from glucose biscuits, says

Vinita Bali, managing director & CEO, Britannia Industries

According to a retail audit, the share of glucose biscuits in

overall market has changed from 30% to 26% in the last 18

months.


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Body Care Products

One in every six rural buyer ofhair dye nowuses colors other than blacksomething,which would have been dubbed indulgencea decade ago

Even seemingly urbane brands in categorieslike deodorants are said to be growing much

faster in rural India than urban, says a study byThe Nielsen Company


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Home Care Products

The rural growth ofmosquito-repellent brand

Good Knight coils was almost double that its

urban market growth this year

Fabric softeners , too,are said to be growing

much faster in rural India than urban, says a

study by The Nielsen Company.


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Some Supporting Latest Statistics

Nielsen pegs the opportunity for retail spending in the next 15years at $100 billion

At present, the rural market is worth approximately $9 billion inconsumer spending in the FMCG space annually

Food categories are expected to drive the bulk of the additional $91billion into the marketplace by 2025.

Product Growth Rate Period Co parison Base

Dove shampoo 100% January-October 2010 over the same period last year

Sunsilk shampoo 14% January-October 2010 over the same period last year

Ponds White Beauty 4200% January-October 2010 over the same period last year

Cinthol Original 28% April-September 2010 it was 12.5%, over the same period last year


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Growth Reasoning

Analysts explain that the high growth is due to a lower

base and that actual sales number would be smallergiven the recent introduction of the brand, one cannotoverlook the fact that there is a demand for suchproducts and marketers can no longer underestimatethe aspirations of the rural consumer

Whats fuelling this trend is a steady growth in incomelevel in rural India

Thanks to a spurt in commodity prices, employmentgeneration schemes and fiscal sops announced by thegovernment, rural consumers today have more moneyin their pockets.


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Rural Consumer Lifestyle Changing Pattern

Rural consumers want brands at a certain price point

With economic growth and rising awareness, the rural-urban divide is getting blurred

There is greater homogeneity and demand for high-quality products, and consumers in both rural andurban markets are aspiring to live better, eat healthyand have a better tomorrow, says Shivani Hegde, GM

(foods), Nestle India

The average rural consumer may have become brand-conscious, but he/she continues to be value-conscious.


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Case Study Godrej (Size matters!!) Godrej Consumer Products (GCPL), whose Cinthol soap

regular was available at the lowest SKU (stock keeping unit)of Rs 23 in Tamil Nadu, has decided to introduce a smallerSKU of Rs 6, for rural markets.

The plan worked for the brand. According to Tarun Arora,executive V-P (marketing), GCPL, the rationale behind

introducing this offer was that although people in smallertowns aspire for a brand, they cannot afford to buy itbecause of high price point.

At Rs 6, the product was within reach. If we look atcategories like soap, they have penetrated deep into thehinterland.

there are also a number of opportunities in hair colourand the household insecticide categories. Introduction andfocus on smaller SKUs has been one of our strategies toincrease our thrust in the rural market, says Arora


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Case Study Nestle & Dabur According to Hegde of Nestle, products may need to be

adapted to meet the specific needs of differentsegments of consumers as affordability varies acrossthe income pyramid

Take the case of Maggi. The two-minute-noodles is afavourite across markets and the Chotu Maggi at Rs 5makes the same high-quality product affordable tomany more consumers, she says.

Similarly, Dabur Amla is available in a Re 1 sachet andRs 10 pack, while Dabur Red toothpaste is available in aRs 5 SKU (stock keeping unit).


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New Strategy - Direct Media

For nearly half of the largest FMCG

categories, rural India now contributes more

to their growth than urban India.

In a bid to fan this new-found rural

consumerism, fresh strategies are being

formulated to connect with a more awareconsumer.


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New Strategy Case Study Dabur India Dabur, which draws half of its sales from rural and semi-urban

markets, has moved beyond traditional media options likeradio, television and cinema, and entered into a direct

engagement with the consumer with special initiatives like a

rural beauty and talent contest with Dabur Amla hair oil.

The company took Dabur Amlas

association with beauty a step

further with a rural beauty pageantchristened Dabur Amla Sundar, Susheel, Yogya Pratiyogita, Ab

Banke Dikhao Rani, which also sought to empower women in

rural India.

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