‘Small regional FMCG players make a comeback’
   Date :17-Nov-2023

Small regional FMCG 
Business Reporter
SMALL regional FMCG players, which reemerged in the market after the cooling of inflation, are giving tough competition to big players, impacting their share in their pocket of influence as well as forcing larger rivals to go for a price revision in segments such as soaps, tea, detergent and biscuits. Several listed FMCG companies, including HUL, Godrej Consumer Products Ltd (GCPL), Marico, Britannia, and Tata Consumer Products Ltd (TCPL), in the September quarter earning calls, mentioned the competition from small players, forcing them to go for price revision.
When inflation is high, smaller players just go out of business, because they cannot compete with the cost structures, which are mainly around giving much higher margins, giving bigger discounts, said Britannia Industries Vice Chairman and Managing Director Varun Berry in an investors call.
But once the commodity prices start to come down, they again start to give big discounts and big margins, he added.
“On one side, you have got the larger players who are obviously much stronger brands, but they are losing out to the smaller players because of the price play and the grams in bag, etc. On the other side, you have got these guys who are throwing money in the market, so we do not want to be caught in this logjam. Only if we find a way to balance and make money out of this will we move forward, Tata Group FMCG arm TCPL also reported a little bit of an upsurge in local regional brands in tea,” he said. “In tea, there are small and regional players. Yes, there is some amount of trading down and there is a higher intensity of small local traders,”
TCPL Group CFO L Krishnakumar told PTI after the quarter results. However, he also added, unlike other businesses, small players were always been there in tea because part of tea is unbranded. It is not a new phenomenon for tea, unlike some other category. “But yes, we are seeing because of people trading down, especially in the rural market, there is an element of aggressiveness by smaller players, but it has not affected us in a material way because our premium segment is growing,” he further said.