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Focus on pushing low-unit packs

As inflation continues to affect the outlook of the economy, many manufacturers are planning to promote their popular brands more than before, reports Saurabh Turakhia.

business Updated: Jun 30, 2008 21:08 IST
Saurabh Turakhia

As inflation continues to affect the outlook of the economy, many manufacturers are planning to promote their popular brands more than before. They also expect the contribution of low-unit packs to go up.

Speaking to Hindustan Times, Aditya Agarwal, director, Emami said: “In current times of inflation, low-unit packs will start playing a bigger role. We already have Re 1 sachets for Navratna oil, Rs 5 sachets for Fair and Handsome and similar packs for some other brands. However, now we are planning to introduce a Rs 2 sachet for Chyawanprash.” Agarwal added that the contribution of low-unit packs might go up from 30 to 40 per cent to a higher level of 50 per cent soon for some categories.

Companies are also focusing on their popular brands as consumers start preferring them over premium brands. “We are focusing on promoting our Marie and Glucose range in these times,” said Mayank Shah, group product manager, Parle Products. He added that low-unit packs make sense as consumers down-trade in terms of brands as well as pack sizes. Parle already has low unit packs, which contribute to 30 to 35 per cent of revenue for the company, and which is set to grow by another 10-15 per cent.

Giving a contrary opinion, Anand Shah, a FMCG analyst at Angel Broking felt that mass brands were at a higher risk. “Mass brands are likely to suffer more due to inflation as consumers of premium brands are not price-elastic. Companies also hike prices of premium brands as and when necessary. Companies with a wide spectrum of brands are better positioned to tackle inflation,” he said. He however, felt that inflation had little to do with introduction of low-unit packs.

Santosh Desai, managing director and CEO of Future Brands agreed: “For companies whose brands straddle popular and premium segments, the impact of inflation can be minimised by making popular brands more desirable, in anticipation of down-trading.”

Both Parle and Emami will focus on promoting their popular brands to use inflationary times as an opportunity. Future Group is also planning to aggressively promote mid-market and mass apparel brands such as John Miller, DJNC, Bare etc among others.

Rajan Malhotra, CEO of Big Bazaar said: “As a mass retailer and discount chain, we see a chance of dampening the impact of inflation for our consumers through our value brands.” Officials at Marico chose not to comment for the story. No response was received from HUL officials till the time of filing this story.