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FMCG firms cut small-pack grammage 2-7%, raise 1kg+ pack prices 5-6% ahead of Dussehra and Diwali

FMCG firms are using grammage cuts of around 2-7% on smaller packs and direct hikes of about 5-6% on packs of 1kg and above ahead of the festive season. Dabur has already taken around a 6% price increase and is holding back further hikes.

Newer report , , Mint : Dabur India Q2 preview: volume growth of about 5.5% makes margins the key trigger for investor confidence

The numbers

Figures from Financial Express,

Dabur consolidated input-cost inflation: 8-9%
Urban quarterly expenditure change year-on-year: -4%
Rural expenditure growth: 15%
Food and grocery sales growth in August: 12%

Why it matters for the brand

With Dabur holding back hikes and Bikaji facing 6-7%, FMCG players are absorbing part of the cost squeeze, so watch for pressure on sub-scale brands, and favor targets with rural reach and proven pricing power over those relying on grammage cuts.

What to track next

  • Festive-quarter volume growth from Dabur and other FMCG firms, split between urban and rural
  • Any second round of list-price increases announced after Diwali
  • Rivals or private labels advertising unchanged pack sizes or prices
  • Gross-margin commentary against the 8-9% input inflation Dabur cites
  • Urban spending turning from its 4% YoY decline, or rural growth slowing from 15%

Likely next moves

Our read of what comes next — analysis, not reported by the source.

  • Dabur is likely to hold its roughly 6% increase through the festive window rather than add more, leaving a gap to 8-9% input inflation that it covers with mix and cost measures.
  • Bikaji and other snack and food makers facing 6-7% are likely to lean on grammage cuts in small packs, since those are the least visible to shoppers.
  • Rivals and regional brands may decline to match the 5-6% hikes on packs of 1kg and above, using the gap to win share from urban value-seekers.
  • FMCG firms are likely to tilt festive promotions and distribution toward rural markets, where spending grew 15%, over urban markets, where it fell 4%.
  • Large-pack buyers and modern-trade retailers may push back on the 5-6% hikes, pressing for trade schemes or shelf-price concessions.

The source

Source Read the source at Financial Express

Published

First seen