Unbranded items and lower priced packs gain traction due to price hike

Hit by rising prices, consumers are opting for unbranded products or lower priced packs in food, grocery and daily necessities, according to a report.

Quoting data from research firm Kantar, The Economic Times has reported that consumers purchased either mass segment brands or unbranded products in soaps, milk food drinks, edible oils and home cleaning products during the quarter ended September. Kantar tracks household consumption trends across urban and rural India and covers branded and unbranded categories.

Trend reversal

According to the report, this is a reversal in trend since the time pandemic broke out when consumers shifted to bigger brands and branded packaged products. Experts said higher product prices are one reason for this shift.

While palm, crude and tea prices have gone up more than 50% from year-ago levels, packaging material prices 30-35% costlier than in last year. Many companies have hinted that price hikes are to continue till next quarter.

Consumer wallets are also shrinking as consumers are gradually returning to their pre-Covid lifestyle which entails higher spending on commuting, holiday travels, dine-outs, etc.

K Ramakrishnan, managing director – South Asia, Worldpanel division, at Kantar, is quoted as saying in the report that consumers went for trusted brands during the lockdown and peak of the pandemic and avenues for spending were limited, too.

Surge in lower priced packs

ITC Ltd’s chief executive for foods business Hemant Malik, is quoted as saying that there has been an increase in sales of lower price packs of Rs 5 and Rs 10, especially for discretionary products like snacks.

Sales of unbranded products in floor cleaners, toilet cleaners and edible oils surged for the first time since the outbreak of Covid-19, according to Kantar.

Non-premium bathing bars grew 9.4% in the September quarter while there was little change in the premium segment, the report said, adding that premium milk food drinks declined 11.6% while the mass segment grew 7.5%.

According to the report, sales of branded floor and toilet cleaner items fell 7% and 22%, respectively, but proxy products or alternatives used in place of these categories grew 4% and 20%, respectively.

In edible oils, the unbranded segment grew 6% while branded products fell by 0.6%.

The shift towards unbranded products is however, not across categories, according  to Kantar. Consumers wanted branded items in detergent bars, washing powders, noodles and tea.

Angshu Mallick, chief executive of Adani Wilmar, too,  is quoted as saying that within edible oil, consumers have not compromised on hygiene and health though there has been reduced buying or shifting to other reputed brands.