Capitalizing on Summer: FMCG Firms Gear Up for Soaring Demand
With temperatures on the ascent, fast-moving consumer goods (FMCG) companies are preparing for a notable uptick in the demand for beverages and dairy products. Following a lackluster summer season in 2023, major players such as Parle Agro, ITC Foods, Mother Dairy, Coca-Cola, and Rasna are intensifying their production efforts and strategically increasing their inventory of low-unit packs. This proactive approach aims to stimulate consumption and ultimately propel sales, capitalizing on the anticipated surge in consumer demand.
Strategic Focus on Low-Unit Packs
Enhancing Accessibility and Affordability- FMCG giants are focusing on low-unit packs priced between Rs 5 to Rs 10 to cater to price-sensitive consumers. These smaller SKUs are strategically priced to encourage impulse purchases, driving overall sales and consumption during peak seasons like summer.
Resonating with Consumer Preferences
Manish Bandlish, MD of Mother Dairy, emphasizes the effectiveness of smaller SKUs in resonating with consumers who prioritize value, quantity, and quality produce, especially during the summer season. This strategy not only enhances penetration but also expands markets.
Rural Penetration and Market Expansion
Companies like ITC Foods are targeting rural geographies with smaller SKUs priced at Rs 10, expanding their reach in states like UP, Andhra Pradesh, and Rajasthan. This focus on rural markets is coupled with efforts to increase outlets for fresh dairy products, tapping into untapped potential.
Diversified Product Portfolios
In anticipation of a shift in consumer preferences toward refreshing dairy products such as dahi, lassi, and chach, companies are gearing up to meet the increased demand. While high-fat products may experience a slight decline, the demand for fresh dairy offerings is expected to witness a notable uptick due to soaring temperatures. FMCG giants like PepsiCo India are leveraging high-octane summer campaigns to capitalize on consumer demand. With iconic slogans like ‘Yeh Dil Maange More’, companies are positioning their brands to resonate with consumers during the most favorable season for beverage sales.
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Market Dynamics and Adaptation
Companies like Coca-Cola India are adopting a segmented approach to stay attuned to market dynamics and consumer preferences. The challenge lies in finding efficiencies in the supply chain to drive volume-led growth profitably amidst changing consumer behavior and inflationary pressures. This entails optimizing distribution networks, enhancing production processes, and implementing data-driven strategies to ensure products reach consumers efficiently and cost-effectively. By embracing a segmented approach and focusing on supply chain efficiency, FMCG firms can better navigate market uncertainties and sustain growth in the face of evolving consumer demands and economic challenges.
Price Sensitivity and Adaptation
FMCG firms recognize the importance of maintaining pocket-friendly price points to drive consumption, particularly in RUrban areas. Parle Agro’s focus on key price points for brands like Frooti and Smoodh reflects the company’s strategy to cater to price-sensitive consumers amidst an inflationary environment.
Innovation and Market Expansion
Bisleri and Rasna are innovating in packaging and pricing to enhance affordability and meet consumer demand. Bisleri has launched a 200ml pack priced at Rs 5 and revamped its carbonated soft drink range, while Rasna boasts a wide range of products priced below Rs 10, including innovative offerings like aampanna and shikanji.
Revenue Growth and Market Share
Rasna’s emphasis on smaller packs has played a significant role in driving its overall revenue growth, underscoring the effectiveness of meeting consumer demand for affordable and convenient options.
As temperatures climb, FMCG firms are strategically positioning themselves to seize the burgeoning demand for beverages and dairy products. Through a concerted focus on low-unit packs, diversified product portfolios, market dynamics, and innovation, these companies are aiming to stimulate consumption, enhance sales, and broaden their market share during the sweltering summer season.
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