Inflation: Inflation is at its peak across the country. In such a situation, there has been a tremendous burden on the pockets of the common people. In such a situation, the common man is saved from spending extra. Keeping this in mind, companies manufacturing consumer products for everyday use have come up with a new jugaad. This will neither put much burden on the customers nor on the companies. In fact, FMCG is reducing the weight of the packets of its products to meet the challenge of rising commodity prices and inflation. That is, companies are taking off small packets. FMCG companies have also introduced ‘bridge packs’. A bridge pack is a category between the maximum and lowest value in a product series.
Prices of packaged products will not have to be increased
Due to weight loss, these companies have not had to increase the prices of packaged products. Such a move is being taken by companies mainly targeting the consumers of low income group. Apart from this, these companies have increased the price of large packets of a product. However, this increase has also been less than 10 percent. The ban on palm oil exports from Indonesia and the geopolitical crisis caused by the Russo-Ukraine war has led to a steep rise in construction costs. To counter this, FMCG manufacturers are using cheaper packaging, recycled products and cutting down on advertising and marketing spend.
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Not wanting to increase the burden on customers
Due to rising commodity prices and skyrocketing inflation, consumers are looking to spend less and buy ‘Low Unit Price (LUP)’ packs so as not to disturb the budget. Mohit Malhotra, Chief Executive Officer, Dabur India said, “The per capita income and spending capacity of consumers in urban markets is high, so we have increased the prices of larger packs. The product weight has been reduced for LUP packs sold in rural markets.
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Inflation unlikely to come down
There is no hope of any moderation in inflation in the coming quarters. In such a situation, instead of increasing the price, many companies have cut the weight of the products. Mayank Shah, Senior Category Head, Parle Products, said that consumer trends have shifted towards value packs and the sales of LUP packs have picked up a bit. Abneesh Roy, executive vice president, Edelweiss Financial Services, said consumers are buying smaller packs to save money and this is happening across all FMCG categories.