Everyday household products, from soaps and detergents to biscuits and packaged beverages, are set to get more expensive. Major fast-moving consumer goods companies are preparing to raise prices as rising crude oil costs, expensive packaging materials, and global supply chain disruptions continue to squeeze their margins, as per PTI.
Several FMCG executives, speaking during recent quarterly earnings calls, have either confirmed ongoing price increases or signalled readiness to act further. The pressure is being felt uniformly across food, personal care, beverages and home care segments.
Companies are already moving on prices
As per PTI, the action has already begun in many cases. Dabur India Global CEO Mohit Malhotra told PTI that the company is facing around 10% inflation this fiscal year and has already responded with a 4 per cent price increase across parts of its business. “We are also undertaking cost rationalisation initiatives. Despite inflation picking up in the India business, we expect growth this year to be in double digits, which will be a mix of both value growth through price increases along with volume growth,” he said.
HUL, which owns brands such as Surf Excel, Brooke Bond, Lifebuoy, Dove and Lakme, has seen material cost inflation of 8 to 10 per cent and has already raised prices by 2 to 5 per cent, depending on the product category. CFO Niranjan Gupta said the company will keep evaluating the cost environment and act further if needed. “Depending on how the costs pan out, we will be taking further price increases as may be necessary,” he told PTI.
Marico, which sells Parachute, Saffola and Livon, has already raised prices by 6 to 7 per cent in its value-added hair oils range. MD and CEO Saugata Gupta said the company is managing cost pressures through calibrated pricing actions alongside internal cost management, even as softer copra prices offer some relief.
Britannia and Pidilite flag steeper cost pressures
According to PTI, biscuits and bakery major Britannia is staring at nearly a 20% rise in fuel and packaging costs. The company is looking at both direct price hikes and grammage reductions, meaning consumers may get slightly less product for the same price, particularly on packs priced above Rs 10. “Selectively, we will have to take price increases,” MD and CEO Rakshit Hargave told PTI, adding that rising laminate prices and dependence on LPG and PNG have made operating costs visibly heavier.
Pidilite Industries, known for Fevicol, FeviKwik and Dr Fixit, has already raised prices twice, in April and May, and is now looking at a third round. The company is contending with a weighted average input cost surge of 40 to 50%. “We will continue to pass that on in a calibrated fashion to the market,” MD Sudhanshu Vats told PTI, adding that the company intends to stay within its guided EBITDA margin corridor of 20 to 24%.
Beverages sector trims discounts, watches fuel costs
In packaged beverages and water, Varun Beverages Chairperson Ravi Jaipuria told PTI that companies have started pulling back on discounts rather than raising sticker prices outright. “We see the B-brands and the other players selling water — they have not increased the price, but they have reduced the discounts,” he said. Jaipuria added that while raw material needs for the current quarter are covered, fuel prices remain a vulnerability. Further discount reductions are possible if costs climb.
One pattern visible across companies is the effort to hold price points on popular smaller packs, including the Rs 5, Rs 10 and Rs 15 SKUs that drive volumes in rural and semi-urban markets. Rather than raising the price of these packs, some companies are quietly reducing the quantity inside them, a practice known as shrinkflation. Larger pack sizes are more likely to see outright price increases.
The bigger picture
The common thread running through all these companies is a combination of factors: crude oil-linked raw material inflation, currency depreciation making imports costlier, higher logistics expenses, and disruptions in global supply chains tied to ongoing geopolitical tensions. Companies are doing what they can internally, trimming promotional spends, tightening inventory and streamlining procurement, but executives are clear that some of this burden will pass on to the consumer.
Tata Consumer Products MD and CEO Sunil D’Souza acknowledged packaging and LPG-linked cost pressures but said the company’s diversified portfolio is helping keep the situation manageable for now, as per PTI.
Nestle India Chairman and MD Manish Tiwary was perhaps the most candid about the uncertainty ahead. “Times are volatile and difficult for anyone to predict what’s going to happen even two months down the line. That is something which we have to be ready for,” he told PTI.
With inputs from PTI