FMCG firms lay it out for the picky Indian consumer
3 min read . Updated: 09 May 2019, 12:23 AM ISTThe consumer is willing to support anyone who provides value without sacrificing style
Suresh Narayanan, chairman and managing director of Nestlé India Ltd, the local arm of the Swiss food and beverage giant, had said in an interview to Mint a couple of months ago that the company was working on 24-36 new products in both existing and new categories. He promised to launch the products over the next few months. In the last two years, the Maggi noodles maker has launched more than 30 new products, including premium chocolates, dips and spreads, breakfast cereals, nutrition bars and ready-to-drink milk beverages. Even though some of these new products were discontinued, the company has never been so aggressive in diversifying its portfolio in India. While the launches may have been aimed at reducing its dependence on Maggi after the 2015 fiasco, the move was also intended to target the new-age Indian consumer.
A few months ago, Mumbai-based Marico Ltd, the maker of Saffola oil and personal care products, also launched several new products in the health and wellness segment, including green tea and a green coffee mix, besides high protein milk shake and soup.
Food major Britannia Industries Ltd, too, is moving towards becoming a total foods company, having launched a range of new products such as croissants, cream wafers, salted snacks and milk shakes. The 55-year-old convenience food brand Gits has also launched 10 new products in the last one-and-a-half years. The company’s director for sales and marketing, Sahil Gilani, said the Indian consumer is becoming very demanding. Considering that people want more fibre and nutrients in their food, the company has introduced products based on brown rice, oats and flaxseeds in its ready-to-cook and ready-to-eat range targeted at millennials. In Maharashtra, it has also entered the dairy space with milk, lassi and buttermilk, among other products.
Experts at research firm Ipsos said that the consumer is increasingly becoming hard to please. Ashwini Sirsikar, qualitative research head, Ipsos India, said that there was a lot of traction for new launches, especially in the food and beverage space, as Indian consumers are exposed to international cuisines, thanks to social media and TV shows. “Indians are experimenting, seeking variety and are open to trying new products and experiences—food is one of them. Food and beverage, in a way, is the cheapest and most accessible form of indulgence, which offers instant gratification," she said.
Millennials also have strong individualistic traits and food is an area where this individualism manifests quite openly. “Many marketers want to capitalize on this mindset by offering new flavours, new forms and products to ensure that the consumer does not move out of their fold," Sirsikar added. There is also a trend of going back to one’s roots with natural and locally-sourced food items. “While on one hand consumers are embracing western and international foods, on the other they are embracing local foods (such as ragi, makhana) with equal fervour," she explained.
Anthony D’Souza, executive director, Ipsos Innovation, however, said the big firms may be under pressure from smaller startups, which are quick to meet consumer needs. “On the demand side as well, consumers are willing to experiment and try small brands that provide value. Big companies need to be quick to tap into the fast-growing and profitable categories. Diversifying the portfolio makes sense as it helps mitigate risks and is not necessarily a costly affair. Input cost increases are today smartly passed on to the end consumer. Millennials are fostering this diversification and they have a larger say in products and services than before," he said.
That’s not all. Product life cycles are contracting and consumers are looking for tangible benefits. So, marketers have to continuously engage with consumers and infuse freshness in the category and brands. “Most product changes are consumer-led, and this is to cater to their explicit and implicit (psychological) needs. Consumers are highly promiscuous, it is easy for them to switch loyalties to a rival brand. Also, frills become hygiene as the category evolves–and so marketers have to keep pace," he added.
However, he also said the Indian consumer is not tempted by international brands. “The theme is now quite local. They are willing to support anyone who provides value without sacrificing style: Brand names are not as important."
Sirsikar said while new products are being launched rapidly, many are failing and are quickly withdrawn from the market. “It has been seen that the initial trials are high, but then consumers come back to the comfort of the familiar and tried-and-tested."
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.