A new report by Euromonitor International identifies the biggest trends that will shape the future of India’s FMCG markets, and identify new priorities and opportunities in a post-pandemic environment.
High market competition means fast-moving consumer goods (FMCG) companies should start thinking creatively about how they reach out to consumers, even in the remotest parts of the country. The biggest challenge for established and multinational companies will be to adapt large scale operations with agility.
The expected third wave of COVID-19 in India will reinforce demand for hygiene products and maintain consumers’ focus on boosting immunity. Opportunities beyond immunity post-pandemic.
The surge in demand for immunity boosting supplements in India will remain strong if new COVID-19 variants develop. According to Euromonitor’s Health and Nutrition Survey, 66 percent of the Indian population think having a healthy immune system is essential. “For businesses to stay relevant and ensure brand loyalty, expanding their product portfolios to address growing concerns around problems like inadequate sleep, stress and anxiety will be key in the coming years,” the report says.
Traditional herbal and Ayurvedic supplements such as Chyawanprash, Guduchi, Gilroy and other immunity-boosting products like vitamin C and fish oils, have seen a surge in sales since the first wave in 2020. Euromonitor’s survey showed around 41 percent of the Indian population took vitamins and supplements for stronger immune support in 2020 and this figure increased to 50 percent in 2021.
The heightened interest in immunity-boosting products along with consumers exploring more Ayurvedic formulations are strong drivers for new market entries.
Citing examples, the report adds that companies like Marico Limited launched Saffola Arogyam with the ingredient Chyawanprash in 2020. Similarly, the shift towards healthier eating has inspired packaged food companies to launch more functional food products with immunity claims and incorporate healthier ingredients into existing products to recapture consumers’ interest. Consumers are driving this demand with 69 percent of India’s population claiming that they look for healthy ingredients in food and beverages, a 5 percent increase from 2019.
Health is the mantra
The demand for health products has extended into the beauty industry as well, especially in skin care. While moisturising and hydration remain the most desired skin care feature, India’s population now also desire skin care products with added health benefits like enriched vitamins. This shift will most likely encourage companies to re-evaluate their portfolio and introduce skin care products with health claims.
Euromonitor’s Beauty Survey indicated that 65 percent of India’s consumers were concerned about skin health in 2020, higher than the global average of 44percent. A likely third wave of COVID-19 in India is likely to promote the consumption of healthier foods which are high in fibre, protein and other micronutrients will be in high demand. Consumers who are at increased risk of infection will also seek organic ingredients to reduce their intake of refined sugars, salt and saturated fats.
However, consumers often perceive healthier foods like ancient grains as less flavoursome and more difficult to prepare. Packaged food companies as a result are increasingly launching new tasty snacking products with healthier ingredients in categories like breakfast cereals, snacks and staples.
Hygiene: Cleanliness to Germ-free in Home Care
Hygiene is evolving from a problem-solving product to a lifestyle need. During the pandemic, consumers used hygiene products in fear of contracting the virus, however, in the long-term, consumers will use them for functional and health-driven reasons.
According to Euromonitor International, 45 percent of consumers indicated that they identify better with a well-known brand when buying any type of cleaning product and two in five people check reviews around how effective the products are before making a purchase.
A majority of the Indian population favours natural products like lemon, neem or tulsi which have antibacterial properties over chemical-heavy products. In 2020, Reckitt’s Lizol introduced herbal variants, which localised its surface disinfectant.
also launched “Nature Protect” which is a range of hygiene products that contain neem extracts and claims to kill 99.9% of germs.
As vaccination rollouts increase, consumers in highly populated urban areas are driving demand for niche categories like on-the-go disinfectants. Normal disinfecting sprays and liquids are not travel-friendly due to the size of the bottles and the possibility of leakage, but brands like GCPL launched travel-sized sanitisers and Savlon positioned their disinfecting wipes for daily out-of-home situations.
Evolution of Physical Space in Foodservice and Retail
COVID-19 lockdowns reduced foot traffic across physical outlets and impacted the top line of all retailers and foodservice owners. Additionally, the high costs of renting physical spaces led to the permanent shutdown of many stores.
As time goes on, brands and retailers in the FMCG market are likely to invest more in digital spaces and strengthen online distribution to keep up with consumers turning to online channels for shopping, says the report. This will also force store-based retailers to re-evaluate the purpose of physical outlets and work towards integrating in-person and online channels to provide more seamless shopping experiences and remain relevant post-pandemic.
Technology will play an important role in reshaping the purpose of stores. Retailers will focus on reducing the number of touchpoints and provide more contactless shopping experiences for consumers.
With e-commerce gaining prominence, the store will become an important part of retailers’ omni channel expansion strategy. From being purely transactional in nature, stores are expected to turn into fulfilment centres or collection points.