Fast-Moving Goods In Rs 20 Packets Challenge SKUs.

  • Aug. 17, 2022
Fast-Moving Goods In Rs 20 Packets Challenge SKUs.

Companies that sell packaged consumer products get a major amount of their revenue from Rs 5 and Rs 10 packs. In response to inflation, corporations were compelled to cut the gramme weight of these packets in order to maintain profit margins. The sales of Rs 20 packs have doubled over the past four years, as Indian consumers have taken a liking to them. As the size of Rs 5 and Rs 10 packs has shrunk owing to high inflation in the fast-moving consumer goods (FMCG) industry, the Rs 20 pack has become the pack of choice for Indian customers, as larger packs are seen to provide more value.

According to a recent report by data analytics and consulting firm Kantar Worldpanel, sales of the Rs 20 pack in FMCG categories such as biscuits, noodles, toothpastes, bar soaps, skin creams, hair oils, and washing powders increased 121% on a moving annual total (MAT) basis in April 2022 compared to April 2018. Kantar Worldpanel used 2018 as the base year due to the abundance of data for the year.

Kantar Worldpanel said that since 2018, the Rs 20 pack has attracted five crore new households to the biscuits sector, seven crore to the toothpaste category, nine crore to the hair oil segment, and five crore to the skin creams section.

Increasing numbers of businesses have introduced Rs 20 packets for their items. Recently, Parle has released Rs 20 packs in response to the reduction of Rs 5 and Rs 10 packs. “The Rs 10 pack, which was more of a pack for at-home use, is now being utilised for on-the-go consumption owing to its smaller size, while the Rs 20 pack is being used for at-home consumption,” said Mayank Shah, senior category head for Parle Products. “Therefore, we’ve developed the Rs 20 box for a variety of items, including Parle-G biscuits,” said Shah.

Kantar reports that there have been 87 new releases in the Rs. 20 segment in eight main FMCG categories since 2019: biscuits, noodles, snacks, beverages, toothpaste, bar soaps, face cream, hair oil, and washing powder.

The price points of Rs 5, Rs 10, and Rs 20 have sustained the growth of the FMCG industry. The majority of FMCG volumes are priced at Rs 10, with the fastest growth occurring at Rs 5. Rs 20 is still a modest amount. K Ramakrishnan, managing director of Kantar Worldpanel, believes that the Rs 20 pack would become more significant in the future due to inflation and reduced pack sizes.

According to a report by Kantar Worldpanel, for every 100 new recruits in 2018, Rs 20 is recruiting far more today. For instance, if Rs. 20 was adding 100 homes to the category of cookies, it is now adding 208 households. Similarly, it currently recruits 187 houses for toothpastes, up from 100 households before.