Small packs are pushing consumers to shop more often, leading to an increase in purchase frequency of FMCG brands: Kantar report

• Due to the rising retail inflation, Indian consumers are struggling to meet their living expenses.
• Not only have they put their big life plans on hold, but consumers are also switching to smaller products and less popular brands to deal with high inflationary pressures.
• They are leaving behind their old habits of bulk buying their ration.
• As per Kantar’s recent report, consumers are buying smaller packs, which run out quickly and lead to high purchase frequency for FMCG brands.

Inflationary pressures have pushed Indian consumers to switch to smaller packs. However, soon enough, the pack runs out, and consumers need to revisit supermarkets to refill ration. This has increased the purchase frequency of Fast Moving Consumer Goods (FMCG) products.

As per data analytics firm Kantar, with lockdown being lifted, India’s FMCG brands witnessed a huge jump in their Consumer Reach Points (CRPs), which takes into account a brand’s reach in the country, overall penetration, and purchase frequency.

The report predicts that with high inflation this year, purchase frequency and brand penetration are expected to grow even further.

“When consumers are faced with inflationary trends, they tend to shift to smaller packs but buy them more often to meet their overall requirements. This results in improved frequency,” explained K. Ramakrishnan, Managing Director- South Asia, Worldpanel Division at Kantar.

Established brands who were quick to read the market and launch smaller packs were able to leapfrog. As per Kantar, the bigger the brand, the faster the growth they witness.

As a result, FMCG giants with over 61% penetration levels grew the fastest, with over 8% growth in 2021 over 2020.

“This year as consumers returned to the marketplace in droves after tightening conditions in the by-gone year, frequency jumped significantly, which is reflected in the big jumps most brands took in their CRPs. This is why bigger brands always have an advantage,” said Ramakrishnan.

For the last ten years, Parle Products has been indomitable in terms of reach, penetration, and purchase frequency. This year, too, Parle held the first spot with CRPs of 6,531 million and witnessed a growth of 14%.

Sharing why Parle continues to hold the first position despite high inflation, Ramakrishnan said, “One of the things that are working for them [winner brands such as Parle] is that they are reaching a large number of people, therefore, their distribution is working for them as they are building their penetration. Second is pack play -- they continue to hold on to Rs 2 pack and Rs 5 pack, which helps with growth significantly. So lower the pack size, the more the frequency, therefore growth in CRPs.”

After Parle, Amul, Britannia, Clinic Plus and Tata Consumer Products have scored high on CRPs.

Newer FMCG brands get more popularity in India

New entrants such as sweet and snack manufacturer Haldiram and biscuit and confectionary maker Anmol joined the billion CRP club, improving their reach and penetration in the country by leaps and bounds.

Many regional brands also witnessed an uptick in CRPs, such as spice brands like Rajesh and Rakesh.

In the dairy industry, Kerala’s Milma, Karnataka’s Nandini milk, and Telangana’s Vijaya also entered the list.

Growth is driven by food, beverages and haircare

In 2021, 70% of FMCG brands saw an improvement in their CRPs over 2020 -- jumping from 56%. This growth was driven by food, health and beauty, and beverage brands.

Beverage brands witnessed an 18% growth in 2021, followed by food at 15% and health and beauty at 7%.

Nescafe registered a 19% CRP growth within beverage brands, followed by Boost at 15%.

Some snacking brands grew over 30%, with Balaji growing by 49%, followed by Kurkure at 45% and Bingo at 37%.

Brand Footprint Top 10 Most Chosen FMCG Brands of India in 2021: