New Delhi: It's been a fair and lovely quarter for the FMCG sector. Bouyant demand, especially in rural India, has prompted companies like HLL and Colgate Palmolive to raise prices and others will follow suit.
"Pricing power has returned in albeit a small way, we'll look at selective price increases in hair and oral care business, and later in healthcare supplement too," says CEO at Dabur India Sunil Duggal.
Companies are confident that higher prices will not dampen demand. Since around the last quarter of 2005, the industry has been picking up smartly.
This quarter Hindustan Lever's profits rose 11.64 per cent on a thriving household and personal care segment.
Dabur grew 21.5 per cent on its buoyant food business. Toiletries and hair care products boosted Godrej's bottomline by 17 per cent.
In this booming market companies are re-jigging their product mixes and boosting AD spends. Quarter-on-quarter Levers has increased its expenditure by 45% and Colgate Palmolive, by about 88 per cent.
Experts say brands are being relaunched and repositioned as companies cater to various consumer needs.
Director-Finance at HLL, D Sundaram says, "For Lux, we launched two variants, Lifebuoy was revamped and relaunched, Lakme sunscreen range was introduced and new flavours in ice cream."
In the short term it seems the FMCG sector will continue to move fast. As long as the market can take it, there will be price increases in new products too.
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