The slowdown in consumer staples is not real, says Amul MD. He also tells why one-quarter results are not a correct picture of the economy.
Leading FMCG brand Amul is sure of its consumer growth amid reports of a slowdown in consumer staples market in the country, Amul MD R S Sodhi said on Tuesday. Attributing the success of its consumer staples growth to right pricing, Amul MD said that the key here is to price the products right, considering India is primarily a country of lower-middle-class people.
“I don’t think we as such, as Amul, have seen any major cause of worry at demand slowdown. India is a country of the lower middle class. If you are pricing it for lower-middle-class people, consumption is growing,” RS Sodhi said.
Also, with food being an entity that is a must for every household, whether high income or low, Amul is confident of its growth. “Whatever prosperity, income levels are increasing in India, the first thing which any household is going to spend is on food or other FMCG products,” he added.
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Is the slowdown for real?
Recently, two Kotak Institutional Equities reports pointed out to slowdown in the demand of daily use items, a trickle-down of the previously seen slowdown in household and automobile sector. With FMCG brands such as Hindustan Unilever saying “FMCG is recession resistant, not recession proof,” to another giant Britannia’s statement that slowdown has hit the marketplace, one of the Kotak reports claimed that the situation at customer front might be even worse than imagined. Other Kotak report claimed that the slowdown should be a big worry for any government with the consumers not even able to buy daily use items such as soaps, shampoos and hair oils.
However, Amul MD does not believe that just one-quarter report is actually a testament to the economy’s health. “I think the last quarter results are not going to give any indication of a slowdown. A one-quarter sale is not a correct picture of the economy,” RS Sodhi said, negating the reports on consumer slowdown. “If you have to really analyze it, in the first three-quarters of the [FY19], the growth has been much more because before that, GST had come.”