Business · Companies · 3 hrs ago

Rising costs push Indian snack makers to rethink ₹5 packs

Rising costs push Indian snack makers to rethink ₹5 packs

Indian snack makers are struggling to make their smallest packs profitable as the costs of potatoes, cooking oil and packaging rise.

The pressure is focused on ₹5 and ₹10 packs, which account for about 60–65% of snack and biscuit sales by volume.

These low-priced packs are especially important to price-sensitive consumers and are a major source of revenue for companies including Balaji Wafers, Parle Products and Gopal Snacks.

Brands have already cut the weight of some ₹5 packs by more than half over the past three to four years, but further cuts could put off customers.

Some manufacturers are offering retailers better incentives on larger packs to encourage them to stock and promote those products, though Parle says it has kept margins the same across pack sizes.

Others are redesigning pouches to reduce packaging costs, while some are expanding premium products for modern retail and quick-commerce sales.

These changes aim to protect profits without relying on further cuts to the amount in small packs.

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What people are saying

Arvind SinghalChairman and managing director of The Knowledge Company
Reducing grammage is a dangerous strategy. There comes a point where you open a pack and find only five broken chips inside.
via Mint
National FMCG distributorDistributor speaking anonymously
Companies have trimmed margins on ₹5 pouches by about 10% and shifted that margin to larger packs.
via Mint
Mayank ShahChief marketing officer of Parle Products
We have not cut margins on smaller packs. We continue to offer the same margin across pack sizes.
via Mint