FMCG PulseAugust 2018

CHARTTOPPERS

As people living and breathing research, we love our numbers – don’t we? Most of us perhaps can list down the top grossing �lms of our generation; and can probably countdown the top run scorers in cricket or any sport we are in love with. For that matter, we de�nitely know the numbers of our brands and more so of our competitors in the categories we operate in, right? But how many of us know the chart

toppers in FMCG across various Household Panel parameters?

For example, do we know which FMCG brand enters the most households in the country? Or which brand do consumers spend the most on in a year? Or do we know which brand sells the most number of units?

45 of the biggest FMCG categories we track

Over 700 brands in those categories

And across nearly

20 di�erent measures we measure brands on

Across India

And doing that, we have identi�ed brands that are masters in certain aspects.Some of these results are obvious and some are chair jerkers – so hold on to your seats aswe go through this piece.

In this section we explored

THE MOST PENETRATED BRAND

I doubt you would have any di�culty answering this. It is Clinic Plus. At 81% this is the most pen-etrated brand in the country. Four years ago there were only three brands that reached over 70% of the country’s households – Clinic Plus, Colgate Dental Cream and Lifebuoy. Among these, Clinic Plus is the only brand that man-aged to inch up slightly from 79.8% in early 2015 to 81% penetration now. The other two brands have sharply declined

There is still a healthy gap between Clinic Plus and the next largest brand Parle, which has reached about 73% of the Indian households in the year. If Clinic Plus manages to hold on, it has the chance to continue as the undisputed leader in penetration for many more years to come.

managed to add 22% households. Easy Wash’s success is no mean feat because Easy Wash was not o�ering a product that solves an important personal need like DantKanti; but it was merely o�ering a new price point that enabled the mass buyer to upgrade – two di�er-ent strategies but both leading to fast growth.

THE FASTEST GROWING BRAND

Anyone who has not heard about Patanjali Dant Kanti must be living under a rock! In Early 2015, the brand had a reach that could be counted on one palm – 5%, come 2018 it has reached one-third of the households in the country. In just three years, it added 27% of Indian households – an awe inspiring feat indeed. It is only one of two brands that added over 20% households in the last three years.

The other brand is Surf Excel Easy Wash which

I KNOW THAT!Let’s start with the more

obvious brands!

THE MOST CHOSEN BRAND

Every time a consumer visits the shop to buy a category he has the opportunity to choose a brand. In that sense, the product of households and occasions gives you the number of times a brand was chosen. Brand Footprint calls this the Consumer Reach Points (CRPs). If you accessed the Brand Footprint report then you must be aware that Parle has been the most chosen brand for the last four years. At nearly 5000 million choices, Parle is leaps ahead of its next branded competitor Clinic Plus, which has about 3290 million choices. Along with Britan-nia which has 2630 million choices, Parle and Clinic Plus are the only three brands that are chosen over 2000 million times. In fact, only 8 brands are chosen at least a 1000 million times.

BRAND WITH MOST UNITS SOLD

Given that Parle leads the number of choices, one might be mistaken that its units are the most selling. But it is not! Clinic Plus exchanges its place with Parle here, purely because Sham-poo is a sachet driven category in India. Over 18000 million Clinic Plus SKUs were bought in the year ending March 2018, irrespective of what size they were. Parle, the next ranked brand managed to sell less than half that number at about 8400 million. Sachets skew this measure so much so that out of the top 10 brands in this list, �ve brands are shampoo brands.

SHUCKS! How did I miss it?

THE MARKET SHARE LEADER IN ITS CATEGORY

Well, Clinic Plus might be 81% penetrated, but it has a market share of just 48%. This is because the shampoo category has other strong brands and it is also driven by personal preference to an extent. With 81% market share, Kissan Jam tops this chart. In fact, Jams as a category are only 4.5% penetrated, but the fact that there is no other strong brand in the category meant that Kissan tops here.

Kissan is distantly followed by Ponds Talcs at 68% and Amul Butter at 64%. Maggi Noodles at 63% ranks next and these are the only brands that have a share of above 60%. There-fore we can conclude that fewer the brands in a category, greater the chance to garner a high market share.

THE FLIRTERS’ CHOICE

Biscuits is a �irters’ haven, so to say! There are often more than ten di�erent brands of biscuits bought by a household in a year. So in that con-text, Cadbary’s Bournvita is the brand that enters into households that are classic �irters. The Bournvita biscuit buyers on an average buys 14 biscuit brands in a year. Mind boggling, right? Flirting is so prevalent in the category that among the top 30 brands with highest NOB, 25 of them are biscuits. Ignoring biscuits then, Doy Soaps is the top �irters’ choice. On an average these buyers buy 9 brands. Doy is closely followed by another bar soap brand Liril, whose buyers purchase a little more than 8 brands on an average. Emami Oil with a similar number rounds o� the top 3 if Biscuits are ignored.

Again, the implication is that the more number of brands that are available in the category the higher chance for the buyer to experiment. Your Loyalty is based on the number of brands avail-able in the category – so when you set your targets don’t chase a ghost you can’t catch.

THE YEAR ONBRAND

No brand is bought in each of the 12 months of the year on average. In fact, no brand is bought in at least 9 of the 12 months in the year. There may be households buying some brands every year, but since the majority do not buy they drag the average down. In that sense, it is a surprise to know that the brand that is bought in most months in the year is a local brand from West Bengal – Chakula Detergent Bar. It is bought in nearly 8.5 of the 12 months in the year.

Very close on its heels with only decimals sepa-rating them is the Vanaspati brand Gold Plus. And at 7.2 months is the Tea brand Sapat. In fact, it would surprise you to know that only 11 brands are bought in 6 months or more on an average, and none of them are Personal Care brands. The �rst Personal care brand features in the 14th rank – Clinic Plus, which is bought on an average in 5.9 months of the year.

WHAAAAT!These are the chair jerkers.

BRAND MOSTSPENT ON

Rs. 5049 – that’s how much consumers spend on Tirupati Cottonseed Oil in a year. The Guja-rat based brand reaches over 50% of the state’s households and is the brand that consumers spend the most on obliterating any other brand in its wake. In fact, as Biscuits is the category with the most number of brands, Edible Oils is the category with highest spends. The brand following Tirupati is Gemini Sun�ower Oil, on which consumers spend nearly Rs. 2200. In fact all the top 20 brands ranked in terms of spends are from the Oil and Ghee space.

Ignoring Edible Oils the brand where consumers spend the most on is Pediasure, the MFD brand. A little under Rs. 800 is spent annually on it. Distantly followed by Surf XL Matic on which over Rs. 500 is spent annually. Note that these are brands that have at least 0.1% penetration at the All India level, so there may be some super exclusive premium brands on which con-sumers might spend more on an average but they don’t feature here.

WHEREINNOVATION WORKS

The market landscape has changed in the last decade. Consumers are now more knowledge-able than ever; they have become more vocal in their demands from brands; and they have a plethora of choices now if their demands are not met. As a result, Consumer behaviour has altered noticeably and being ahead in terms of the o�ering has never been more important.

Consumers are no longer seeking a mere prod-uct, they are seeking an experience and mar-keters are providing this experience innovating with their products. But an innovation does not necessarily mean instant success. The purpose of this feature is to give you a birds-eye-view of some of the novel launches that happened in the country in the past few years and try and draw lessons from those.

For this exercise, we looked at nearly 25 new formats launched across FMCG in metros. 80% of these launches were launched after 2015. These are new innovations in terms of packag-ing which o�er convenience, like Indulekha Bhringraj Hair Oil or Mosquito repellent patch-es, sprays and roll-ons; or di�erentiated prod-ucts like Hajmola Yoodley, Paper Boat, Cake Biscooti; or enhanced products that give a newer and better experience like All Out Ultra with three modes, Tata Tea Fusion etc.,

EXPERIENCE SEEKINGSO PERSONAL

We found that these innovative launches were more successful among Personal Care when compared to either Household Care or Foods & Beverages. Consumers are not readily willing to experiment with their indigenous palette and therefore Foods & Beverage innovations have limited acceptance. Within Household Care, insecticides or more speci�cally Mosquito repel-lents are driving innovation. Yet, these innova-tions are actually driving a once Household Care category into a Personal Care space – Case in point being Odomos patches, belts or roll-ons, all used on the person

The graph above also points out that the most successful innovations are those that are func-tional in nature. For example, Godrej Expert Rich Crème is the �rst Hair Colour that launched in a Crème format, which makes application easy. Indulekha Bhringraj Hair Oil

comes with a Sel�e Comb that dispenses oil directly on the scalp. All Out Ultra similarly comes in three guard modes which can be changed depending on the intensity of mosqui-toes.

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Food & Beverages (FNB)

HouseholdCare

PersonalCare

As the table clearly depicts, Mumbai is the top geography across almost all the launches. It therefore is a no-brainer for innovative launch-es to have Mumbai in their �rst phase plans. South is largely rigid in experimenting with new �avours, typically because the Southern palate is reasonably di�erent from the Northern palate. So, for Food & Beverage launches, unless

MUMBAI A MUST

When launch penetrations were studied across metros, it became clear that not all metros adopted the launches with open arms.

Penetration after one year of launch Del Kol Mum Che Bng Hyd Pun Ahm

Himalaya face wash sachets -- 0.2 -- -- -- 0.02 -- -- Clean&clear morning energy 1.4 1.6 1.5 0.2 0.8 0.4 0.7 0.1 Colgate charcoal 0.4 0.8 1.0 0.6 0.6 0.0 0.1 0.2 Whit tone 0.4 0.03 0.8 1.2 0.2 0.2 1.3 0.3 Any veet wax strips 0.03 -- 0.1 0.03 -- -- -- -- Godrej expert rich creme 6.7 4.2 6.6 2.4 5.7 0.2 0.7 0.3 Indulekha bhringraj 0.7 0.05 2.3 1.1 1.7 0.6 1.1 0.6 Hair & care fruit oil 2.4 1.1 0.2 -- 0.05 -- 0.2 3.6

All out ultra 2.4 1.2 0.4 0.2 1.8 1.2 2.5 0.1 Good knight fabric roll on 0.2 0.6 0.5 0.1 0.4 0.1 -- 0.1

Paper boat 0.2 0.7 0.6 0.3 0.2 0.4 0.1 0.1 Tata tea fusion 0.02 0.04 0.3 -- -- 0.05 -- -- Brit. Cake biscooti 0.1 0.7 0.005 0.2 0.1 -- -- 0.1 Ching's secret oats 0.1 0.2 -- -- -- -- -- -- Parle hide n seek fab! 0.4 1.2 6.1 1.6 2.2 1.6 4.4 0.5

Markets with highest ( or 2nd most) penetration after one year

PERSONAL CARE

HOUSEHOLD CARE

FNB

the innovation directly targets the South palate, the geography is unlikely to be crucial in the �rst phase of the launch.

The next time you have an innovation launch, make sure that you make the messaging more personal and get in touch with us to understand the markets where innovation works better.

CONSUMERS MOVING OUTOF UNBRANDED PRODUCTSIS A MYTH

Edible Oil has the highest penetration of unbranded products at 62%. But three years ago their penetration was much higher at 67%. Unbranded Hair Oils similarly fell from 25% penetration to 21% in these three years. Salt also took a nosedive from 24% to 19% in the same timeframe.

This may give an impression that consumers are rapidly rejecting unbranded products across categories. But among the 10 biggest unbranded categories, these are the only 3 categories where we see unbranded losing rapid penetration.

UNBRANDED TO BRANDED

Unbranded products are no pushovers. Espe-cially in Commodity Categories like Oil and Tea the Unbranded products reach nearly half the Indian consumers. It wouldn’t be an exaggera-tion to say that across FMCG, Unbranded prod-ucts enter into every household and in more than one category. However, as the market place is getting organized, it is generally assumed that the unbranded products across categories are shrinking while the branded products are eating into their share. Close observation suggests that the unbranded prod-ucts might not be slowing as much as we would like them to!

Categories percentaged based on Unbranded Products' movement in Volume Share

27%27%

46%

Categories Lost Categories Stable Categories Grown

In fact, among the 26 categories where unbranded products have at least 1% penetra-tion, they lost penetration in only 7 categories, or just 27% of the categories – in fact in 2 of these 7 categories the penetration loss in the three years was just a tad bit over 0.5%. In 7 other categories these products grew while in the remaining 14 categories the movement in four years was less than 0.5% either way.

The assumption that a mass exodus out of the unbranded is taking place is therefore a com-plete myth.

BUT CONSUMERS AREDEFINITELY TRYING OUTBRANDED

WHAT DOES THIS MEAN?

This is not an opposing statement to the previ-ous �nding. The fact of the matter is that con-sumers continue to buy unbranded, but they are frequently trying out branded products too.

This is displayed in the fact that the unbranded shares have come down while penetration was maintained. Though in only 7 categories unbranded products lost penetration, they ended up losing volume share in 14 categories.

Likewise, in only 6 categories we saw unbrand-ed products grow in volume share and only a couple of them are categories where they had gained reasonable penetration.

The fact that the penetration is being main-tained tells us that the consumer is still buying unbranded products. And the fact that the volume share is lost tells that in a few occasions the unbranded product is getting replaced by the branded product.

The fact that the Consumer is unwilling to let go of the unbranded product completely means that the aim for the marketer should be to enter and co-exist with an unbranded product rather than breach and replace it.

The logical progression of an unbranded buyer to a branded buyer is something like this – a solus unbranded buyer to a branded trier – from a branded trier to a majority branded buyer - and from a majority branded buyer to a solus branded buyer. So, converting an unbranded buyer to a branded buyer is a long-term game and one that might not o�er quick returns. Marketers should be ready for that in categories where unbranded is strong.

Categories percentaged based on UnbrandedProducts' movement in Volume Share

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29%

21%

Categories Lost Categories Stable Categories Grown

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