Small Packs Resulting In Frequent Shopping By Consumers

Inflationary pressures have forced Indian consumers to change towards smaller-sized packs. But, sooner or later the pack will run out and the consumers have to go back to the grocery store to replenish the ration. This has led to a rise in the purchase quantity of Fast Moving Consumer Goods (FMCG) items.
 

As per the data analysis firm Kantar and the lockdown being lifted, the market's FMCG brands saw a massive leap in their Consumer Reach Points (CRPs), which are a measure of the brand's presence in the country, its overall consumption, and frequency of purchase.

The report forecasts that, with an increase in inflation, this year purchasing frequency, as well as brand popularity are likely to increase even more. "When consumers face the rising cost of living, they tend to move to smaller packs and purchase them more frequently in order to meet their requirements. This increases regularity," explained K. Ramakrishnan, the Managing Director for South Asia, Worldpanel Division at Kantar.

Established brands that were quick to recognize the market and introduce smaller products were able outsmart. According to Kantar, the larger company, the more rapid the growth that they see. In the end, FMCG giants with more than 61% penetration have the highest growth rate in 2021, with more than eight percent growth by 2021 compared to 2020.

"This year, when people returned to the market in a flurry following tightening of conditions from the past year, the frequency increased dramatically as is evident by the huge jumps that brands saw on their CRPs. That's why the bigger brands always have an edge," said Ramakrishnan. For the past 10 decades, Parle Products has been the most enduring when it comes to the reach, penetration, and buying frequency. This year too, Parle held the first position with CRPs of 6,531 million, and a growth of 14 percent.

In his explanation of the reason Parle is still in the top spot despite rising inflation, Ramakrishnan explained, "One of the things that is working for them [winner brands like Parle is that they're able to reach many people. Therefore, their distribution has been working for them, as they increase their reach. The second is the pack playParle continues to maintain their two packs of Rs. 2 and 5 pack, which aids to boost growth substantially. The smaller the size of the pack greater the frequency, and consequently increase in CRPs."

Following Parle, Amul, Britannia, Clinic Plus and Tata Consumer Products have scored well on CRPs. New participants like confectionery and sweet maker Haldiram and confectionary and biscuit manufacturer Anmol joined the billion-dollar club of CRP increasing their reach and presence throughout the country in leaps.