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The contribution of new launches in the September quarter was found to be higher across key FMCG categories than the year-ago levels, according to a recent report by NielsenIQ.
Besides the launch of new products, this was also because FMCG companies introduced new pack sizes amid inflationary pressures, the report noted.
Earnings talk
Several leading FMCG companies have also highlighted the growing significance of new product launches in terms of their contribution to sales in their second quarter earnings.
Take for instance Tata Consumer Products, which said it has accelerated its innovation efforts, with the number of new product launches in the first half of the year at 2x over last year. The company launched products such as Tata Tea Gold Saffron and Tata Sampann Hing besides revamping its ready-to-eat and ready-to-cook portfolio. The company’s management said it expects contribution of innovations to sales to be at about 3.5 per cent by the end of the fiscal.
FMCG major Dabur India launched products across segments including Vedic Tea and Chyawanprash with jaggery in the September quarter. The company, which has also been ramping up focus on digital-first launches, stated in its Q2 earnings call that the contribution of new products on e-commerce stood at 11 per cent.
The management of Britannia Industries in the Q2 earnings calls said NPD (new product development) contribution in Q2 was at about 5 per cent of revenue.
New pack sizes
At the same time, NielsenIQ stated that a large number of the new product offerings in the quarter was in terms of introduction of new pack sizes. FMCG companies have been offering new packs with reduced grammage in response to heightened inflationary pressures and to make their products more accessible.
“Manufacturers are taking different measures to rejig their pricing strategies to win back consumers. Some manufacturers are focusing on innovations in pack sizes and many have rejigged their price strategies to develop affordable price points for consumers,” said Sonika Gupta, Customer Success Lead (India), NielsenIQ, in a statement.
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