Changes in price-pack contributions across six key categories in the March quarter of 2023 show more consumers have up-traded to high-value packs as compared to the same quarter of the previous year. The shift is seen in beverages, personal care and branded commodities, according to data from Bizom, a platform that automates retail execution at 7.5 million kirana stores,
In personal care, consumers have up-traded from low-price packs (up to Rs 50) – which shrank 6.8% during the quarter under consideration – to medium- (Rs 50-200) and high-value (Rs 200-plus) price packs, which grew by 2.7% and 4.1%, respectively.
The trend, which is based on Bizom’s data shared exclusively with TOI, confirms that premiumisation as a strategy is also driving growth in these categories.
Bizom’s chief of growth and insights, Akshay D’Souza, said, “Premiumisation across select categories of beverages, commodities and homecare have definitely helped drive growth. All categories grew in rural, while 5 of 6 categories saw growth in urban.”
In beverages, the shift seen is consumers moving away from mid-price (Rs 10-30) packs towards both low- (up to Rs 10) and high-value (Rs 30-plus) packs. There was a 3% growth in low-price packs, but the growth in high-price packs was greater at 7.4%, while medium-price (Rs 10-30) packs contracted 10.4%. In beverages, thus, more consumers have up-traded than down-traded.
Parle Agro joint MD & CMO Nadia Chauhan said, “We are still a country that is driven by single-serve pack formats, which have the highest penetration and the maximum reach. We are also driven by impulse purchase and instant gratification, and I do believe that portion packs are still going to drive a large part of growth. But there are certain price points that are evolving quite strongly. A great example is the Rs 20 price point as the 20-rupee coin has gained good traction. It has gained acceptance as an impulse purchase price point and is offering a good push to value growth. But there’s still a long way to go when compared to the Rs 10 price point in terms of the scale and size in the FMCG sector.”
Mid-priced packs drove growth in homecare (Rs 50-200 bracket) and confectionery (Rs 10-30) categories during the quarter. In packaged foods, there were minor changes in price pack contribution, albeit an uptrend towards mid- and high-price packs.
According to Bizom, the overall FMCG market grew at 14.1% during the March quarter, with rural growing at a faster clip of 16.8% as compared to urban (7.9%). A closer look at the categories growth in Q4 in both urban and rural show that commodity sales and homecare, along with packaged foods, were the key drivers in rural. In urban, the drivers were confectionery and homecare with packaged foods also showing a slight uplift.
“Many FMCG companies continue to build their direct distribution network, especially in rural markets. This has helped immensely in improving the outlet reach in rural areas leading to significantly higher growth there,” said D’Souza. The number of distributors grew overall by a net 22.8%, with rural growth at over 28% and urban at just under 19%.
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