2 weeks ago
India's FMCG firms step up advertising spending ahead of demand
Companies that make everyday products like toothpaste, soap and food are spending more money on advertising.
They are doing this because people are starting to buy more of their products again.
Nestle India spent more than 40% more on ads than it did last year.
Colgate-Palmolive India increased its ad spending by about a third.
HUL spent the most money of all the companies, even though its increase was smaller.
The companies want to make their brands stronger and sell more premium products.
They are also trying to reach customers in new places, like online stores and rural areas.
The companies believe that advertising now will help them sell more in the future.
Some experts say ads help, but products also need to be good, fairly priced and easy to find.
India's large FMCG companies are increasing advertising and promotional spending faster than sales growth in several cases.
Nestle India raised advertising spends by more than 40% year-on-year in the June quarter, while Colgate-Palmolive India increased spending 33.7% to Rs 251.9 crore.
HUL spent Rs 1,657 crore on advertising, its highest in nearly three years, though its increase was a modest 3.7%.
Spending is being directed towards premiumisation, innovation, rural penetration and newer distribution channels rather than just maintaining visibility.
Companies cite improving volume momentum, with Nestle sales up 25%, Colgate net sales up 12% and HUL sales up 10% in the June quarter.
- Who
- India's large FMCG companies, including Nestle India, Colgate-Palmolive India, Marico, Dabur India and HUL
- What
- Increasing advertising and promotional spending, in several cases faster than sales growth
- Where
- India
- When
- June quarter
- Why
- To invest ahead of demand, strengthen brands and target premiumisation, innovation, rural penetration and newer distribution channels
Invest Ahead of Demand
Advertising Amplifies, Not Drives
Role of advertising spending in growth
Invest Ahead of Demand
FMCG companies are increasing ad spending ahead of demand, expecting stronger volumes and market-share gains as consumption improves and channels expand.
Advertising Amplifies, Not Drives
Advertising is an important enabler but not the primary driver for trade up; consumers trade up when brands offer meaningful innovation, superior product benefits, the right price-pack architecture and broad availability.
Key facts
- Nestle India ad spend growth
- More than 40% year-on-year
- Colgate-Palmolive India ad spend
- Rs 251.9 crore, up 33.7%
- HUL ad spend
- Rs 1,657 crore, up 3.7% (highest in nearly three years)
- Marico ad spend growth
- 25.3%
- Dabur India ad spend
- Rs 229.5 crore, up 13.6%
- Nestle sales growth
- 25% year-on-year
- Colgate net sales growth
- 12%
- HUL sales growth
- 10% with 5% underlying volume growth
Quotes
Archana Jahagirdar
Founder and Managing Partner, Rukam Capital
“"you have to be on all those channels because you’ve got to be where the customer is, and that is really what is leading to the spend"”
financialexpress.com
“"stronger margins allowed the company to increase focused investments in brand building and category premiumisation"”
financialexpress.com









