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.

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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."

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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.

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Tuesday, August 9, 2016

Sampling in a time-starved world

Product sampling is hardly a new concept in marketing but the process still strains many companies that attempt it. Food products and cosmetics brands have long been icons of sampling but in a time-starved world they are striving hard to find new ways to execute their plans. While the more traditional in-store customer and indirect distributor sampling still prevail, creativity has entered the mix, allowing companies to focus on fresh outlets to run their initiatives. Companies are directly targeting bloggers, trend-setters and looking at even airplanes and cabs to place their products.

Consider Indigo Airlines' sampling campaign for 3M bandages or the one for GlaxoSmithKline's Sensodyne toothpaste. Or an in-flight product sampling campaign for NutriChoice crackers conducted in Jet Airways. Also, when ITC launched Dark Fantasy, it did a sampling exercise with some domestic airlines. Aliasgar Merchant, head, airline business, Global Onboard Partners, an out-of-home, in-flight advertising specialist, says, "In-flight product sampling is popular with FMCG companies as it gives direct access to a captive audience that needs to be engaged. This works really well in low cost carriers (LCC) as they don't serve meals."

What makes in-plane sampling exercise different is the direct access to SEC A-A+ audience (a prime target group for a bevy of advertisers), guaranteed viewership, clutter free environment and direct product interaction. "Unlike sampling in a mall or a retail store, the passenger in the airplane is sitting idle and, thus, it is easier to grab her attention. It is like free samples of juices and energy drinks given to people when they are running," says Mukesh Agrawal, co-founder & head, servicing, The Media Ant, a marketplace for offline media.

But why?

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CavinKare announces national foray of Karthika herbal shampoo

FMCG conglomerate CavinKare on Wednesday announced the national foray of the shampoo variant of the herbal hair care brand, Karthika.

C K Ranganathan, chairman & MD, CavinKare, said: "The national foray of Karthika Shampoo comes at the right juncture with the herbal products market posing a positive outlook for the coming years. 

With an increase in the penetration level for herbal products across market, we foresee a tremendous growth for our brand, Karthika Shampoo, which already enjoys a greater acceptance in the southern market today. We plan to increase Karthika Shampoo's turnover to Rs 100 crore by 2017."

The newly launched variants are available at Rs 1 for sachets, Rs 10 for 35ml , Rs 40 for 80 ml and Rs 95 for 175 ml bottles.

Karthika has a presence in 2.14 crore households across south India as per IMRB Kantar World Panel's Household Purchase Panel data.

The product was launched in Andhra Pradesh in 2006, followed by subsequent launches in Tamil Nadu, Karnataka and Kerala.

Colgate to battle Patanjali's Dant Kanti with herbal toothpaste Vedshakti

Call it the Ramdev effect. Almost 80 years after Colgate-Palmolive entered the country, the oral care giant is launching an India-focused brand as Patanjali Ayurved threatens to upend the established order in fast-moving consumer goods.  

Cibaca Vedshakti seems to be aimed squarely at the Baba Ramdev led Patanjali, which has challenged the multinational's dominance in the segment with its Dant Kanti toothpaste. While Colgate has been selling herbal variants such as neem and clove in the country, this is the first indigenous brand in the ayurvedic segment for the $16-billion global giant that controls more than half the oral care market in India.  

"In India, the consumer believes strongly in natural ingredients. A toothpaste launching this quarter under the Cibaca sub-brand is Colgate Cibaca Vedshakti," Bina Thompson, senior vice-president at Colgate-Palmolive, said in an investor call on Friday. "The positioning is a toothpaste packed with the goodness of natural ingredients to help keep dental problems away." There is a growing preference for products that are said to have 'natural' ingredients — these now account for 13-14% of the overall toothpaste market.

The Indian unit of Colgate, which historically hasn't had a sizeable presence in this segment, responded to this last quarter, by revitalising Active Salt Neem and launching sensitive Clove toothpaste. These products have a combined share of more than 7% of the overall toothpaste market now. Patanjali, however, objected to the new name, suggesting that it wasn't appropriate.

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