FMCG firms may post 11.8% revenue growth in Q4: Report

Source: ETRetail.com, Apr 06, 2018

MUMBAI: Fast moving consumer goods (FMCG) firms are expected to post a net revenue growth of 11.8 per cent in the March quarter, highest in the past 18 quarters, on acceleration in volume growth, GST-led savings and higher leverage benefits, said a report.

However, the March quarter’s performance isn’t strictly comparable with the same quarter last year due to GST-led reporting changes and demonetisation impact in the base quarter, according to Kotak Institutional Equities.

“At an aggregate level, we expect net revenue growth of 11.8 per cent, highest in the past 18 quarters. We expect 9.9 per cent growth for the staples pack, slightly lower than third quarter FY18’s 11.2 per cent on a reported basis but higher on a base-adjusted basis,” it said.

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Patanjali turns pace setter for FMCG companies in India

Source: LiveMint.com, Mar 09, 2018

New Delhi: Call it the Patanjali effect. If you are in the packaged consumer goods business and the market is India, the pace setter is Patanjali Ayurved Ltd, the company set up by yoga guru-turned businessman Baba Ramdev and the mantra for success is to launch herbal and ayurvedic products, never mind your multinational antecedents.

Amway India Enterprises Pvt. Ltd, the local unit of American direct-selling company Amway, is the latest to join that bandwagon, having launched a bouquet of dietary supplements that consist of traditional Indian herbs like tulsi, brahmi, ashwgandha, amlaki, vibhitaki and haritaki, under the Nutrilite brand. Nutrilite accounts for about 50% of the company’s total sales in the country. The new range, according to Amway, is projected to generate Rs125 crore in revenue by 2020.

“The range is specifically developed using Indian traditional herbs keeping in mind the nutritional requirement of our Indian consumers. The new range will help accelerate Nutrilite’s growth further in India,” said Anshu Budhraja, chief executive officer of Amway India.

However, Amway is slightly late to the party. Other multinationals, especially those with oral care and personal care products, have already revived their herbal, or natural and ayurvedic products portfolios in the past couple of years—soon after they started feeling the squeeze by Patanjali Ayurved that rides solely on ayurvedic and natural products, backed by Baba Ramdev’s aggressing marketing.

Hindustan Unilever Ltd (HUL) and Colgate-Palmolive (India) Ltd, the local units of MNCs, were the first to react. Colgate launched Cibaca Vedshakti, a toothpaste made of natural ingredients, to counter Patanjali’s Dant Kanti herbal toothpaste that had made a dent in Colgate’s market leadership by then. HUL relaunched Lever Ayush for its ayurvedic products and acquired Kerala-based ayurvedic hair oil brand Indulekha for Rs330 crore in 2016. Both the companies managed to arrest declining growth.

Unilever, the parent of India’s largest packaged goods firm HUL, in October 2016, for the first time, acknowledged the impact of Patanjali Ayurved and has been launching herbal products since to fight competition.

In a conference call with investors in October 2016, Unilever head of investor relations Andrew Stephen said Patanjali is a company that “everybody is looking forward to with lot of interest” in India citing rationale behind HUL’s efforts to ramp up “naturals” products to capitalise on the fast-growing segment.

But the decision to follow Baba Ramdev’s footsteps is paying off. “We continue to see benefits from our launches in the naturals space with Colgate Cibaca Vedshakti and Colgate Swarna Vedshakti driving incremental sales,” Ian Cook, global chief executive of Colgate-Palmolive, said in the company’s investor call in January this year.

An HUL spokesperson agreed that the firm has been benefiting from its revived naturals portfolio. “Naturals as a segment has been growing fast and is a trend that is increasingly visible not just in India but also in several parts of the world. HUL has taken specific actions to leverage this growing opportunity. We have beefed up our Naturals segment with the relaunch of Lever Ayush,” said a spokesperson for HUL.

Besides the Ayush range of skin care, hair care, oral care, and bath and body products targeted at the masses, HUL has premium ayurvedic hair oil and shampoo under Indulekha brand.

There’s more. The company has also extended fairness skin care brand Fair and Lovely hair care brand Clinic Plus with ayurvedic variants.

Homegrown companies are not lagging. Dabur India Ltd, which was hit by Patanjali’s honey and chyawanprash in the initial quarters, has already launched some ayurvedic products and has lined up a range of fresh launches across hair oil, shampoo and healthcare. According to Dabur India’s management projections, Ayurvedic products will constitute more than 75% of its sales in India by 2020, from around 60% at present. “The future will be driven by ayurvedic products,” Sunil Duggal, CEO of Dabur India, said in an earlier interview.

Kolkata-based Emami Ltd and Bengaluru-based Himalaya Drug Co., which have been selling herbal or ayurvedic products for long, have gained from their traditional herbal positioning and have been expanding. While HUL bought Indulekha, Emami acquired ayurvedic hair oil and shampoo brand Kesh King from SBS Biotech Ltd in June 2015 for Rs1,651 crore to boost presence in the ayurvedic space.

Even traditional ayurvedic firms, such as Kolkata-based Shree Baidyanath Ayurved Bhawan Pvt. Ltd, the country’s largest maker of traditional ayurvedic medicines, are gaining from Patanjali’s popularity. “We have been growing at 18-20% compounded annual rate during the last four years. We aim to cross Rs2,000 crore in three years from Rs1,100 crore revenue at present.

The emergence of Patanjali and Baba Ramdev’s marketing of ayurveda has increased awareness among the masses which in turn has expanded the market,” said Ameve Sharma, president, Shree Baidyanath.Herbal products comprise 6-7% of the personal care products market, but the volume is growing at about “twice the segment average” and herbal products are estimated to account for about 10% of the segment by FY20 as the trend accelerates, equities research firm UBS Securities said in a report.

Market research agency Euromonitor International, in a report said, “Competition in the natural, herbal and ayurvedic market within beauty and personal care is expected to remain intense. Mass brands like Dabur, Emami and Patanjali are expected to continue to educate consumers about benefits of using natural products, through product promotions and in-store displays.”

 

Rural economy, monsoon to boost FMCG firms in 2018

downloadSource: The Hindu Business Line, Jan 08, 2018

Mumbai: In the next 12 months, consumer goods companies would see a revival, both in volume and margin terms, with an anticipated revival in the rural sector, said a report. With a few state elections and expected populist budget, the rural sector is anticipated to be prime beneficiary. This, coupled with improving macros and good monsoon after two consecutive droughts, also augur well, said the report on the consumer good sector brought by Edelweiss.

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Patanjali ranked India’s most trusted FMCG Brand

Source: ETRetail.com, Dec 22, 2017

Patanjali has been ranked as India’s most trusted Fast Moving Consumer Goods (FMCG) Brand by the Brand Trust Report India Study 2017 and has been announced as the most attractive brand in India.

SK Tijarawala, Spokesman, HH Swami Ramdev, took to his Twitter handle to announce this news, along with the picture of the certification.

He said Patanjali has been ranked as India’s most trustedFMCG Brand in a study covering 11000 brands across 16 cities by The Brand Trust Report India Study 2017, adding that after an analysis of 10000 brands, Patanjali has been declared as the most attractive brand. Read the rest of this entry »

FMCG, auto products’ sales pick up pace in rural India, outsmart cities

download (4)MUMBAI/KOLKATA: Purchases of consumer products and automobiles in rural India picked up pace during July-September, outstripping the rate in cities, as a good monsoon lifted farm income. Rural sales of FMCG products by both value and volume — the number of products sold — increased 13% during the quarter from a year earlier, according to Kantar Worldpanel, the consumer insights arm of WPP, the world’s biggest advertising company. It was the fastest pace of growth in over three years.

In contrast, the urban market expanded 4% by value and 1% by volume during this period, the researcher said.

This is the second consecutive quarter of double-digit growth in the rural FMCG market, which helped to boost volumes in the overall fast-moving consumer goods sector by 7% compared with about 4% a year earlier. The rural market accounts for more than a third of all consumer goods sold. “In our case, rural growth has been very good.
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Post tax rate cut, FMCG firms set to reduce prices

index.jpgSource: The Economic Times, Nov 13, 2017

Manufacturers would need to strategise on passing on the GST reduction, depending on the extent of the stock with each intermediary in the supply chain and other factors.

Prices of shampoo, chocolates, nutrition drinks and condensed milk are set to drop 5-15% after the GST Council eased these from higher tax slabs.

Companies such as Hindustan Unilever, Dabur, Amul, GlaxoSmithKline, Procter & Gamble, Nestle and Perfetti Van Melle said they have either decided to reduce prices or are planning to do so after the GST Council cut tax on several consumer goods to 18% from 28%. They, in fact, are also bound by the anti-profiteering clause under the GST law to pass on any benefit from lower tax incidence to consumers.

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Sales of FMCG firms signal consumer demand revival

Source: LiveMint.comn, Nov. 03, 2017

A surprise increase in sales volumes of consumer packaged goods companies has boosted hopes of a recovery in consumption demand, indicating the possible end of the lingering effects of last year’s demonetisation and the fallout of the move to a goods and services tax (GST) regime in July.

Hindustan Unilever Ltd, India’s largest consumer packaged goods maker, reported a 4% volume growth in the three months to September compared with flat growth in the previous quarter. Read the rest of this entry »