Indians still not preferring high-value FMCG products, pick smaller packs instead: Report
inflation on an annual basis, Indians are still not opting for high-priced large consumer product packs, a TOI report showed on Tuesday.
Citing research from retail intelligence platform Bizom, the report said that the sales growth in high-value packs across FMCG categories shrank in July over the previous year.
Low-and-mid-priced packs still figured among the preferred alternatives for most Indians as prices of large packs remain higher than expected.
«When the price of a pack rises above a certain psychological threshold — say a Rs 100 pack becomes Rs 110 — then it's difficult to get consumers to purchase these packs. Moreover, e-commerce and quick commerce, where consumers make impulse purchases of small-and-mid-priced packs, continues to grow faster than modern trade where high-value packs are usually bought,» said Mayank Shah, senior category head at Parle Products. He added that consumers are okay with grammage reductions because extra money does not go out of their pockets.
Despite companies passing on raw material cost benefits to consumers — by increasing grammage on low-and-mid-price packs and reducing the prices on high-value packs — the pricing threshold on the latter continues to remain psychologically high for consumers, the report said.
In packaged foods, sales of high-value packs saw a 1% decline even as mid-and-low-priced packs recorded 0.5% growth, the report showed. In confectionery, consumers shifted to mid-priced packs (4.6% growth) while high-value packs saw a 4.7% decline. In branded commodities, both high-value and mid-priced packs saw growth declining, as consumers moved to small packs (4.7% growth).
Distributors said FMCG companies are putting as much as 10% grammage back in some
