India’s fast-moving consumer goods (FMCG) market is showing positive consumption trends as inflation declines and rural growth recovers, V Kumar, MD & CEO, Procter & Gamble India, said in an investor call on Wednesday.
In his opening remarks, Kumar, 48, who took over as India head of the US-based multinational company in May 2024, said that the maker of brands such as Whisper, Vicks, Gillette, Oral-B, Tide and Pantene, was “doubling down” on an “integrated growth strategy” that included having a strong portfolio of brands as well as ensuring superiority, productivity and constructive disruption across the value chain.
P&G in India, which includes three listed and one unlisted entity, delivered sales of over $2 billion (Rs 16,000 crore) in FY24. The company follows a July-June accounting year. It lags peer and rival Unilever, whose India unit delivered sales of nearly Rs 60,000 crore in FY24.
P&G, however, provided no update about a global restructuring plan that has identified India as its first pilot market. “We have strengthened our organisational structure to deliver better outcomes and win in the marketplace,” Mrinalini Srinivasan, chief financial officer, P&G India, said in response to specific queries on the issue. She took over as CFO of the company effective June-end 2024.
Srinivasan also indicated that declining rural wages and umemployment were key monitorabels for the firm, even as normal and above-normal rains had covered 75% of districts in India this year. Q-commerce as a channel, while small, was “more than doubling” in terms of growth rate year-on-year for the company, with P&G investing in supply chain and quick-commerce partnerships to ensure growth momentum, Srinivasan said.
P&G also sees a huge runway for growth in India, where penetration of categories such as feminine care, male grooming, oral care and health care remained limited largely to urban areas, Srinivasan said.
While the company would continue to drive topline and bottomline growth, the aim would be to remained “balanced” in its approach, with emphasis on driving productivity to fuel investments, fund innovation, raise the bar on superiority and absorb macro headwinds.
“The integrated growth strategy begins with having a portfolio of daily-use products where performance drives brand choice. The second aspect is to deliver irresistible superiority across product, packaging, communication, retail execution and value. The third aspect is productivity to fund superiority. And the fourth part is driving constructive disruption of our value chain to future-proof our business,” Kumar said.
For instance, P&G Hygiene and Health Care, which makes Whisper and Vicks, and is listed on the Indian stock exchanges, had driven savings of Rs 113 crore in FY24, while Gillette India, also listed in India, had delivered savings of over Rs 45 crore in FY24, thanks to efficient management of costs across the company’s value chain, Kumar added.
The company has invested Rs 8,200 crore in the last ten years and Rs 20,000 crore in the last 25 years to set up nine plants in India. The ninth manufacturing unit, announced in June last year in Sanand, Gujarat, will be set up at an investment of Rs 2,000 crore to manufacture healthcare digestives.