New Delhi, May 10: Daily essential products such as soaps, detergents, biscuits, packaged foods, and beverages are expected to get costlier as leading FMCG companies are preparing for calibrated price hikes on account of rising crude-linked inflation, higher packaging costs, and fuel expenses from geopolitical disruptions that are squeezing margins.
The executives of FMCG makers, which have already gone for recent price hikes of around 3 to 5 per cent, in their latest earnings calls have indicated either ongoing price increases or readiness to raise prices further, citing inflationary pressure arising from volatile crude oil prices, higher logistics costs, currency depreciation and disruptions in global supply chains amid geopolitical tensions.
This pressure is being felt across sectors, including food, personal care, beverages and household products, as FMCG companies are attempting to balance their margins and are resorting to either price hikes or shrinking pack sizes, retaining the popular smaller SKUs of Rs 5, 10 or 15 in the market, to maintain sales volumes.
Though FMCG companies are focusing on price elasticity and internal cost efficiencies’”such as trimming discounts and promotions, tightening inventory management, and streamlining supply chains’”to cushion the impact, consumers are still expected to bear part of the burden through calibrated price hikes and reduced grammage.
Home-grown FMCG maker Dabur India Global CEO Mohit Malhotra said the company is already facing 10 per cent inflation this fiscal and has initiated price increases to cushion the impact.
“We have already implemented a 4 per cent price increase across different parts of the business to partly mitigate this impact. We are also undertaking cost rationalisation initiatives. Despite inflation picking up in the India business, we expect growth this year to be in double digits, which will be a mix of both value growth through price increases along with volume growth,” said Dabur India Global CEO Mohit Malhotra. (PTI)
