2 hrs ago
FMCG Companies Trim Pack Sizes to Hold Prices Amid Costs
FMCG companies are facing higher costs for making their products.
They want to avoid raising prices too much, especially on cheap products.
Instead, they may put slightly less product in the same-sized package.
This is expected to happen most with products costing Rs 5 to Rs 25.
Larger packs may lose more weight than smaller packs.
Shoppers are also buying smaller amounts because they are watching their budgets.
Some companies have already raised prices, while others are waiting.
Companies may use a mix of smaller packs, higher prices and different pack sizes to protect their profits.
FMCG companies may reduce pack sizes instead of raising prices on mass-market products.
Products priced from Rs 5 to Rs 25 are expected to see sharper grammage cuts.
Smaller packs may shrink by about 2-5%, while larger packs could face bigger reductions.
Consumers are increasingly choosing smaller purchases as they become more budget-conscious.
Food and grocery sales grew 12% year-on-year in July, compared with 8% overall retail growth.
- Who
- FMCG companies, distributors and retailers, including Dhairyashil Patil and Kumar Rajagopalan.
- What
- Companies are considering smaller pack sizes, grammage cuts and selective price increases to manage higher input costs.
- Where
- India.
- When
- Ahead of the festive season; July retail data showed the latest cited sales growth.
- Why
- To protect profit margins while avoiding sharp price increases that could reduce demand for mass-market products.
Key facts
- Most affected products
- Products priced between Rs 5 and Rs 25
- Small-pack reduction
- Approximately 2-5%
- Larger-pack reduction
- More significant cuts, particularly in packs of 1 kg and above
- Food and grocery sales growth
- 12% year-on-year in July
- Overall retail sales growth
- 8% year-on-year in July
- Sales environment
- Companies are managing costs ahead of the festive season
Quotes
Dhairyashil Patil
National president of the All India Consumer Products Distributors Federation
“The product offerings between Rs 5 to Rs 25 is MRP sensitive, so companies will go for shrinkage here. And for the products priced above that, they can go for increasing the prices.”
financialexpress.com
“Some companies have already adjusted shelf prices, while others are holding to avoid disturbing the festive momentum.”
financialexpress.com
Sources
Related news
Sugar Spike Threatens FMCG Margins Ahead of Festive Season
Rising Sugar, Crude Oil and Copra Reshape Consumer Company Margins
Indian Companies Favor Volumes as Wholesale Inflation Outpaces Retail Prices
HUL Bets on Premium Products as FMCG Demand Remains Resilient
GST Cut Drives Sharp Recovery in India’s Consumer Staples
Indian Consumers Keep Spending, But Demand Value Over Splurging
India’s New UPI MDR Fee Sparks Debate Over Customer Costs
Small Retailers Resist UPI MDR as Cash Payments Loom
