FMCG cos repackage to meet new norms

Jan 28 2013, 03:57 IST
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SummaryIn compliance with the government’s new guidelines for standard pack sizes, major FMCG like Parle Products, ITC Foods and Britannia Industries are changing their packaging strategy, which will also see a revision in prices of some products.

Britannia, ITC, Parle & Pepsico’s change in packaging to also see revision in prices

In compliance with the government’s new guidelines for standard pack sizes, major FMCG like Parle Products, ITC Foods and Britannia Industries are changing their packaging strategy, which will also see a revision in prices of some products.

Parle, the maker of Parle-G biscuits, has revamped the packaging strategy for its entire portfolio of biscuits with price revisions for its premium brands such as Hide & Seek. While ITC Foods has made the required changes for its biscuit packs, Britannia has made a slew of changes in its product pack configurations across the portfolio of biscuits, breads, rusks and dairy products.

Similarly, PepsiCo India has also complied with the new standard pack size regulations while Kolkata-based Duncan Tea has recently revamped the packaging of its 50-g packs of tea.

As per the government’s new law, FMCG companies cannot sell 19 product categories in current unconventional, arbitrary pack sizes like 65, 73, 85, 92, 175, 425 (grams/millilitre). Instead, all such products will have to be sold in standard pack sizes like 25, 50, 100 and multiples of 100 units (g/ml). It is mandatory for FMCG firms to follow the standard pack sizes from November 2012.

“As family packs have to be in line with small packs in our portfolio, we have revamped the packaging strategy for all our biscuit brands. We are in the process of rolling out our new biscuit packs across the country,” said Praveen Kulkarni, general manager, Parle Products. Currently, the company sells Parle-G packs (25 g and 50 g) priced at R2 and R4, respectively, compared with R5 for a 66.7-g pack earlier.

“We have recently cut down the sizes of our biscuit packs, keeping the same count of biscuits. We have revised prices of our premium brands like Hide & Seek biscuits,” Kulkarni added.

The norms bar the sale of FMCG products in sachets and smaller packs with irregular pack sizes. On ITC’s revamped pack sizes, ITC Foods CEO Chittaranjan Dhar said: “We have made changes in our biscuit packs wherever it was needed, in total compliance with new rules. The impact of this move has been very positive till now.”

After considering other parameters, the company has revised the prices of its brands in some case while retaining the same price point in others.

Meanwhile, Britannia Industries has implemented some changes in pack sizes of its biscuits, breads, rusks and dairy products.

“These changes have also meant some price revisions across our products which are, by and large, in line with the industry. The new legal metrology guidelines for packaged products called for some changes in our product-pack configurations,” said a Britannia spokesperson.

PepsiCo India, which offers products at various price points from Rs 2 to Rs 60 in snacks and Rs 7 to Rs 99 in beverages, is fine-tuning its pack sizes to comply with the government's new rules. “While we will comply with the new packaging norms, it will be our endeavour to minimise the impact of such change on the pricing by leveraging local and global expertise in sourcing, supply change management and production efficiencies,” said a PepsiCo India spokesperson.

Like other companies, Duncan Tea is revamping its line of 50-g tea packs. “With tea prices going up, the prices of 50-g packs had gone beyond the Rs 10 mark. With this ruling, we had to reduce the price of these packs to Rs 10 levels. We are revamping the line of 50-g packs,” said MC Appiah, COO of Duncan Tea.

A shift to standard packaging will mean higher retail cost of products, which may dent a company's sales performance. Will Indian consumers benefit from the government's new rules? “It’s too early talk about the impact of these new packs. As consumers are now getting lower weightage of products for the same price, I think it is not beneficial for consumers,” said Parle Products' Kulkarni.

However, RS Sodhi, managing director of Amul, said with the government's new rules, consumers can compare different products available in standard sizes. “It's a welcome move and is very beneficial to consumers. At Amul, we have complied with the new guidelines for standard packaging,” he said.

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