As staple-to-soap makers raise prices to offset rising input costs, consumers are switching to cheaper regional brands and smaller packaging to keep up with inflation.

“Demand for smaller packaging is increasing due to higher costs,” said Krishnarao Buddha, senior category head at Parle Products Pvt. Ltd., told BloombergQuint.

The change in consumption patterns reflects the rising prices of milk and cooking oil for shampoos. The spike in global food prices, exacerbated by the conflict between Russia and Ukraine, prompted domestic companies in fast-moving consumer goods to raise prices more than once in the current quarter of March.

“Retailers have begun to repackage single items such as wheat, rice, dal and atta into smaller 500g packs,” said Prem Kumar, founder and CEO of SnapBizz, which digitizes convenience stores and has a network of more than 30,000 kirana stores across the country. seven cities. † “They create inventory units themselves to meet demand.”

Standard one liter edible oil bottles are taken off supermarket shelves in smaller, more affordable 750ml or 500ml packs.

More expensive products pushed consumers away from “expensive professional brands,” Kumar said. “What we see as a trend is that local brands across the country are doing well.”

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Inflation in the food and beverage component, which has the highest weighting in the consumer price index at 45.86%, increased by 35 basis points to 5.9% in February. The inflation measurement came in at a fairly high 4.3% basis in February 2021.

Including Hindustan Unilever Ltd. and Nestle India Ltd. attribute price increases to higher input costs. “Business conditions remain challenging in the near term,” said HUL chairman Sanjiv Mehta during a meeting with investors. He expects inflation to moderate in the second half of 2022.

Household goods prices have increased by 3-20%. Data sourced from Snapbizz shows that a 500 gram Bru Instant Super Strong Coffee pot now costs Rs 430 up from Rs 390 in February.

The price of a 70g Maggi Noodles pack is up 8% at Rs 13 while a 500g Rin bar now costs Rs 48 as compared to Rs 44 previously. Meanwhile, Amul and Mother Dairy both increased milk prices by Rs 2 per liter in the first week of March.


This post Consumers down-trade to smaller packs, regional brands as inflation bites was original published at “https://www.bloombergquint.com/business/consumers-downtrade-to-smaller-packs-regional-brands-as-inflation-bites”

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