FMCG cos sweeten R&D efforts

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In a tough market, industries, especially the FMCG sector, are betting big on innovation to grab the customer’s eyeballs and money (Reuters) In a tough market, industries, especially the FMCG sector, are betting big on innovation to grab the customer’s eyeballs and money (Reuters)
SummaryCoca-Cola India and PepsiCo India are sharpening focus on product innovations with fresh investments in R&D projects

In a tough market, industries, especially the FMCG sector, are betting big on innovation to grab the customer’s eyeballs and money. In order to have new products on the shelf, the Rs 1,85,000-crore Indian FMCG industry is going all out to step up its research and development (R&D) projects, with special hiring and increased spends.

While Britannia Industries has appointed Pascal Ville, a French national, to head its R&D and quality control projects, Parle Agro, maker of the Frooti brand, has increased its R&D spend by 30% to introduce new products this year.

Arch rivals Coca-Cola India and PepsiCo India are sharpening focus on product innovations with fresh investments in R&D projects. Similar is the case for Parle Products, makers of the Parle-G biscuits, which is increasing investment in R&D projects by as much as 15% to launch new products.

“Innovation seems to be a key differentiator in competitive markets to lure consumers. Realising this, companies are betting big on innovative products and marketing strategies,” said an analyst based in Mumbai.

Elaborating on Britannia Industries’ plans, chief executive Varun Berry said, “Ideally, we would like to get at least 6-8% of our revenues per year from innovations. That figure averaged about 4% in recent years. We have just hired Pascal Ville to head our R&D projects to create innovative products.”

As per Berry, Britannia Industries’ key strategy is to create innovation within the existing categories instead of foraying into new segments. “As we go forward, consumers will see a lot of innovation in our product ranges. We are looking at innovative ways to increase our distribution, too,” he added.

Like Britannia Industries, PepsiCo India is planning to expand the range of foods and beverages in its portfolio to woo a diversified target audience. “India currently represents one of PepsiCo’s largest markets globally. PepsiCo’s R33,000-crore investment is expected to further strengthen and expand its capabilities in the company’s strategic areas, which include innovation,” said a spokesperson from the company. Recently, PepsiCo announced plans for the company and its partners to invest R33,000 crore in India by 2020.

With an annual turnover of $1.6 billion, Tata Global Beverages (TGBL) is relying on innovative products and communication strategies to sustain its leadership in the branded tea sector in India. TGBL MD & CEO Harish Bhat said, “Innovation will continue to be a key growth driver for TGBL. We focus on innovation by leveraging consumer insights and trends in the

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