The fast changing consumer

As we enter a new decade, marketers are preparing to cater to a new-age consumer whose likes and dislikes can make or mar marketing plans. Consequently, the contours of the fast moving consumer goods industry in the coming decade too will undergo a deep change. BrandLine caught up with a few industry veterans to see how clairvoyant they could be on how the consumers good industry and consumers themselves will shape up.

Inflexion point

According to Saugata Gupta, CEO, consumer products division, Marico Ltd, the country has reached an inflexion point on the consumption curve which will see new categories and new growth drivers emerging for the industry. However, the key will be value-for-money products.

Food, personal care and beauty and wellness products are all set to see remarkable growth.

“Anything which will be wearable and ‘accessoriseable' are the segments which will see growth,” he says. Also, there will be a convergence of aspirations between rural and urban consumers. While quality of brands will be a big driver, urban consumers, he says, are going to benchmark what's on offer internationally while rural consumers will benchmark with urban.

In the coming decade, people will want to look good and feel good – men included too — and marketers are keenly aware of that. Hence, the market will see more male grooming products: P&G, for instance, has launched Olay for men. And, the growing phenomenon of modern retail will drive growth of premium categories or personal care, especially products such as hair colours, skin care and such, says Gupta. “But, these categories will compete with many things: from eating out to mobile cash cards to perfume and jewellery,” adds Gupta.

A matter of convenience

The other big trend that is emerging is consumers taking to packaged and processed foods. Convenience will be the key and more packaged foods will be consumed. Gupta is of the opinion that ‘intermediate' foods too will succeed in India, stuff that can be added to foods or those which need minimal cooking. And, in keeping with the health and wellness trend, consumers will seek out ‘good for you' foods.

Marico itself, under the Saffola brand, has launched functional foods for cholesterol management, low glycemic rice as well as oats. Britannia too recently launched in the Mumbai market ready-to-eat breakfast foods such as upma, poha , oats and breakfast mixes under the Healthy Start brand. As Vinita Bali, Managing Director, Britannia Industries Ltd, said in a statement, “Our research showed that Indian consumers were desirous of a breakfast solution that combined convenience, health and taste.”

Brands in demand

Kannan Sitaram, former COO of Dabur India and operating partner, India Equity Partners, says one discernible trend is consumers opting for branded goods, especially in foods. “Consumers will plump for hygiene and ease of convenience. This will propel the growth of branded products and this will happen right across categories,” he says. He points to edible oils in which branded oils have seen remarkable growth. “The winners are going to be those who can capture the growth in segments of the foods industry,” he adds.

The health and wellness categories will see a discriminating and discerning consumer, he says. And, one who is looking for higher functionality and willing to pay for the benefit. “Consumers won't look for the cheapest but will be willing to pay a premium if he sees the product delivering value,” adds Sitaram.

The growth of some categories will also be propelled by the growth of modern retail. As he points out, some players will show themselves to be more adept at anticipating and leveraging the opportunities that the changes throw up. They will alter the dialogue with modern retailers in meaningful ways to grow the market and earn profitable market share. “They will innovate more complex and more insightful consumer segmentation models,” adds Sitaram.

Categories where penetration levels are high will see stiffer competition and companies will see lower profits. Speed to market will also be key. Examples are the biscuits and noodles categories; in the latter both GSK and ITC have entered to challenge Nestle's dominance.

As MNCs face the pressure in their home markets, they will invest more and more in emerging markets such as India. But, as Marico's Gupta points out, they will have to Indianise their global portfolio for the local market.

With new consumers coming in, the consumption pattern too will change and it will be difficult reaching them, he explains. While TV would be a cost-effective medium, concept selling would need a different medium as consumption habits will be different. Consequently, the cost of marketing will go up as media markets fragment.

As Sitaram pointed out in an earlier article in these columns, the future of the fast moving consumer goods industry is bright; but the forces shaping the industry though are very different and this is changing the game considerably. And, the most powerful force is a fast changing consumer.

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