The Rs 5-trillion domestic Fast-Moving Consumer Goods (FMCG) market in India is witnessing a revival of small and regional brands, prompting established national players to revamp their strategies. These nimble-footed newcomers are wielding a potent mix of the traditional 4 Ps of marketing—product, packaging, promotion, and pricing—to challenge industry giants.
Analysts attribute the recent upsurge in the success of smaller brands to the transition from unbranded to branded products, which has significantly contributed to the expansion of the overall market. They highlight the pivotal role played by a deep comprehension of local consumer preferences, combined with streamlined management frameworks, in driving the impressive surge in sales figures.
Somnath Modi, the director at Jaya Industries headquartered in Kolkata, attributes the success of local brands to their agility in decision-making, acute comprehension of market dynamics, and adept execution strategies deployed specifically in regional markets such as Bihar, West Bengal, and Odisha. Jaya Biscuits registered an impressive 18-20% escalation in household reach within Eastern markets.
Additionally, Priyagold biscuits experienced a remarkable 16% surge solely in the past year, surpassing the overall biscuit category’s 9% growth during the same period. Priyagold’s venture into the chocolate market with Snakker, challenging established giants such as Nestle and Cadbury, has garnered significant interest. Its approach of providing 30% additional quantity at the widely favoured Rs 5 price has distinctly captured consumers’ attention, effectively winning them over in the bargain.
Shreeram Bagla, the Managing Director of Annapurna Swadisht, headquartered in Kolkata, highlights the significance of branding and packaging alongside pricing for smaller brands. The company’s strategic focus involves a targeted expansion of its distribution network by 30-40% and a substantial increase in manufacturing capabilities. These initiatives are intended to drive growth, particularly in tier III and tier IV markets. Annapurna Swadisht’s triumph stems from its vibrant packaging and economical pricing strategy, addressing the desires of consumers in less expansive markets. Their vividly packaged range including fryums, wafers, namkeens, rusks, and recently introduced noodles, all available at an enticing Rs 5 price point, has significantly bolstered sales and fostered consistent growth.
Gippi Noodles, a product offered by Balaji Wafers, has experienced a near doubling in its market reach, soaring to a 58% penetration rate in Gujarat. This surge is attributed to its competitive pricing strategy, with the 70-gram pack available at Rs 10, significantly undercutting the price of Maggi noodles, which sells the same quantity for Rs 14. Chandubhai Virani, founder of Balaji Wafers, stresses that affordability is the linchpin for growth and intends to further propel Gippi Noodles across multiple states, leveraging their extensive dealer network and market presence.
With low-unit packs (Re 1, Rs 5, and Rs 10 per unit) holding a 35-40% market penetration in the domestic FMCG sector, smaller players leveraging lower prices due to favourable cost dynamics are expected to continue challenging larger competitors. The resurgence of these small and regional FMCG brands indicates a changing landscape in India’s consumer market, compelling larger players to recalibrate strategies and focus on innovation and value propositions to maintain their competitive edge.
