Aspirational goods to drive FMCG growth
Aspirational products such as chocolates, cold cream, fragrances and breakfast cereals will drive the future of the consumer products industry in India, says a new study by The Nielsen Company. Product innovation, portfolio expansion and aggressive distribution across channels and geographies have helped companies popularise categories such as impulse, health and wellness, lifestyle and convenience, says the Nielsen study on fast moving consumer goods.
These segments are growing at an annual rate of more than 20%. Companies such as Marico, Parle, Dabur and Emami are betting big on such categories.
These segments are the next big thing in the Indian FMCG market, so much so macro-economic conditions like inflation are unlikely to impact their growth if the companies take the right approach.
The growth in economy and higher spending power are increasing the aspiration of Indian consumers who are much younger than before. With such a backdrop, the FMCG industry too has to change its nature fast.
Key impulse products such as biscuits, chocolates, salty snacks and confectionery, which are essentially unplanned purchases for instant gratification, are clocking high double-digit growth rates and rapid increase in retail presence.
The Nielsen study says the huge explosion in variants, price points and pack sizes of such products are acting as catalyst. "Companies are introducing newer attributes like low fat, sugar free, baked and whole grain to entice and attract various consumer segments by creating greater relevance and empathise with their needs,"
At the same time, health & wellness FMCG products are finding greater acceptance among the affluent, urban and health conscious Indians. The study says that this portfolio has evolved from being preventive or supportive nutrition and reflects a mix of indulgence, invigoration and narcissism. Anti-ageing products such as facial creams, lipsticks, eye balms and hair lotions are showing significant growth. Expanding distribution and a wave of consumer interest in these sub-categories have resulted in a surge in their growth rates on a small base.
The study says that rural and semi-urban consumers are now graduating to branded products, giving a boost to the lifestyle category. "Urban aspirations are entering into rural households"
In the lifestyle segment, while grocers continue to be a leading distribution channel, high-end products are finding bigger presence in modern retail. The shift to lifestyle products has been pervasive across geographies, which signals a genuine shift in the purchase basket and lifestyles.
Convenience products such as breakfast cereals, noodles, cordials and cheese have become popular in the last decade due to growing urbanisation, rise of nuclear families where both partners work, increasing disposable income and lack of time. Marketers have spent their time getting these products right to make them available to the Indian consumer across geographic zones and fine-tuned to local tastes. This process will continue as the market evolves.
Communication strategies will become more important for FMCG companies as they focus on these platforms. A particular product, such as biscuit, can be convenience for one section of consumer and impulse for another. It's all about appealing to the evolving consumer needs.
