Monday, September 5, 2016

Recognizing an "Opportunity Gap" for CPG growth

The most difficult aspect of meeting consumer expectations today is, frankly, understanding exactly what they are. Between channel blur, the acceleration of e-commerce and the growing dominance of digital, it is becoming increasingly difficult for CPGs to delineate how best to communicate with consumers, and deliver to them the shopping experience they want – particularly as it relates to leveraging promotions to drive sales.

While declining coupon use has challenged marketers during the last several quarters, there’s no evidence to suggest that shoppers have lost interest in making their budgets go further and saving money on groceries. So, what’s happening with shoppers and promotions? And what does it mean for brands?
According to a Study finds digital coupons (paperless load-to-card and print-at-home) “punching above their weight” and creating a 10x impact in redemption activity relative to their share of overall coupon distribution. While these two methods together accounted for just 0.6% of coupons distributed, they combined to capture 6.7 percent of total coupon redemption volume for the period. In spite of this, manufacturer commitment to digital lags.
The distinct (glaring?) contrast between the increasing impact of digital coupons and the historically low redemption rates for FSIs reveals a significant gap between what shoppers want and what marketers are providing them in terms of offers and ways to save. The way the industry is “talking” to consumers about savings and the way consumers want to be talked to regarding promotions are not aligned.
It’s not unlike what a lot of parents are facing as they try to keep in touch with their children. The “rents” want to talk to their kids on the phone and the kids want to text. Shoppers, through their response rates, are telling CPGs they want a “digital relationship.” (No doubt, some children are sending the same message to their parents!)
So it is within the existing communications gap – by delivering more promotions via digital channels – that CPGs have the opportunity to efficiently and cost-effectively engage shoppers and drive sales in a persistently sluggish marketplace. Shoppers’ demands for easier and faster ways to save on their grocery bills – and their growing engagement with brands that meet these demands – make it incumbent upon CPGs to rethink marketing strategies and reallocate promotion budgets.
By making additional digital content available to shoppers, CPGs will be positioned to reinvigorate sales and build long-term brand loyalty. As a critical component of true omni-channel outreach, digital coupons will engage and activate shoppers at the appropriate campaign level – nationally or retailer-specific – and deliver back to CPG marketers key data and direction for enhanced, sales-driving targeting and messaging.
Employing an intelligent communication mix that is responsive to changes in shopper behavior and aligns with demonstrated media preferences is how CPGs will bridge the current gap, leverage the inherent opportunity for growth – and win.

Saturday, August 13, 2016

GST will help industry in becoming more efficient: CEO, HUL

It is too early to say what the precise impact will be, we have to see what the rate is going to be. It will certainly bring about a level playing field and that is something which we are extremely pleased about. The second important benefit will be that industry will have an opportunity to become far more efficient than ever before. This too augurs very well for the industry.

We are absolutely delighted that GST is moving in the right way. We are also very cognisance of the fact that implementation is going and it is not going to be an easy task. We are talking about a big nation, about huge IT systems. HUL has invested a lot in trying to be GST ready. But it is not just about us. Our suppliers, our customers - everyone has to be ready - and that is a big task.

Read more here

Friday, August 12, 2016

Herbal toothpaste robs MNCs' shine

In a development that may prove India's growing penchant for herbal and ayurvedic products, homegrown companies such as Dabur and Patanjali have robbed market share from top MNCs such as Colgate and Hindustan Unilever (HUL) in the toothpaste category.

This has prompted some of the larger players to launch 'natural' products and price them competitively. Till now, it was only Haridwar-based company Patanjali, which had been playing the low-price card to disrupt the country's FMCG market.

Quoting data from research firm Nielsen, senior FMCG executives said Patanjali has gained market share at the fastest pace by cornering 2.1% of the pie in January-June 2016, compared to 0.5% in 2015. Dabur managed to increase its share to 12% during the first six months of 2016, as against 11.2% in the same period last year.

In comparison, market leader Colgate-Palmolive and HUL saw a decline in their shares.

"Baba Ramdev deserves credit for the explosion in the ayurvedic FMCG space. The amount of viral marketing that has happened over the last one year over Patanjali products is every marketer's dream," said Arvind Singhal, founder of retail consultancy Technopak. "Also, Indian consumers have a lingering mindset that products made by Western companies may have harmful chemicals, although scientifically it may not be true."

Read more here

Britannia focuses on distribution centres, new products to counter weak demand

Britannia is increasing its distribution centres across the country and working on newer products to offset a sluggish demand in the consumer sector which it believes will continue for the rest of the year.

The maker of Good Day and Bourbon biscuits said it added 60,000 direct distribution outlets in the last three months, more in the north Indian states were it has a weaker presence compared to its competitors such as Parle and ITC. As of July, the company has 1.32 million outlets, up from 1.26 million.

"Those numbers give us a pretty good reach. Growth for us in states such as Gujarat, Rajasthan and Madhya Pradesh, except Uttar Pradesh, has been higher than the rest of the country and we are seeing the momentum we want," managing director Varun Berry told TOI. Including the direct outlets and wholesalers, Britannia is present in 4.7 million outlets.

Berry said the company is exploring other segments where it can venture, such as ready-to-eat, breakfast and snacks as part of its innovation. "The R&D centre in Bengaluru is working on this and we will hopefully hit the sweet spot next year," he said.

Berry, who was roped in from PepsiCo three years ago, said he does not expect demand to gather momentum during the rest of the year. That has been evident as a majority of FMCG companies reported low single growth in the recently concluded quarter.

Read more here