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Rediff News  All News  » Business » FMCG product launches hit a record high

FMCG product launches hit a record high

December 07, 2007 09:47 IST
The Fast Moving Consumer Goods (FMCG) industry, the fourth-largest sector in the economy, has seen a record number of product launches this year.

The first 10 months of this calendar year saw the launch of 251 new products (223 variants and 28 brands) against 191 (173 variants and 18 brands) in the same period last year, according to a study by research firm IMRB.

Analysts said the rise in new products has been one of the key drivers of growth for the Rs 70,000-crore (Rs 700 billion) sector. The sector grew just 2 per cent between 2002 and 2004 but recovered in 2005 and grew 12 per cent this year.

The product launch boom was led by branded snacks, soups and shampoo offerings.  This year saw the launch of 18 new branded snack variants, ITC's high-decibel Bingo being one of them. There were no launches in this category last year.

Branded soups saw 14 new variants against 10 launches last year. This included the expansion of the Knorr soup brand range by Hindustan Unilever (HUL).

Biscuit manufacturers also diversified into premium biscuits and cookies with the launch of 50 variants this year against just six last year.

Shampoo manufacturers launched 26 variants against 21 last year. This included three new shampoo brands including ITC's Fiama Di Wills.

Said Anantha P Nayak, marketing manager, Procter & Gamble (P&G), maker of Head & Shoulders shampoo: "The shampoo category has nearly doubled in the past five years backed by a surge in rural demand."

Procter & Gamble introduced seven new variants of the Head & Shoulders brand this month alone in the Rs 2,500-crore (Rs 25 billion) shampoo market.

According to IMRB, the new launches are "a sign of market sophistication, both from the manufacturers' and the consumers' point of view".  Estimates suggest that personal care, household care and foods will continue to grow at high rates.

Within foods, processed foods, bakery, and dairy are being seen as long-term growth categories in both rural and urban areas.

Indians spend Rs 676 per head per year on FMCG products. Barring toilet soap (81 per cent), biscuit (82 per cent) and washing powder (96 per cent), most FMCG categories do not enjoy good rural penetration, providing a huge potential for manufacturers to penetrate the market further.

India is the world's twelfth largest consumer market.

Ruchita Saxena in Mumbai