Amid an economic slowdown, FMCG companies are increasingly falling back on expensive product sales and ramping up premium products offering as the affluent still have the money to buy and experiment.
Even when FMCG companies have been facing the slowdown blues for over nine months now, tobacco maker ITC launched premium products in various categories. In an economic environment that has slowed down the sales of even five-rupee biscuits, one of the leading FMCG companies ITC has driven premiumization and has also received good response for the products that sell at a premium price as compared to standard items, ITC said announcing Q2 results. “In the Dairy & Beverages Business, the recently launched premium range of juices comprising 3 differentiated flavours … continued to receive an excellent response from consumers,” ITC said in a recent statement, announcing their Q2FY20 results. Earlier this week, Financial Express Online reported that amid economic slowdown, FMCG companies are increasingly falling back on expensive product sales and ramping up premium products offering as the affluent still have the money to buy and experiment.
Meanwhile, ITC has also launched the world’s most expensive chocolate in India and at the same time has acknowledged the country’s “operating environment was rendered particularly challenging during the quarter with further deceleration in economic”.
And it is not just dairy, beverages
While ITC said that premium launches in dairy and biscuits were well received by consumers, the company also continued to strengthen other premium categories as well. Take, for example, the biscuit and cake segment. “The Biscuits and Cakes Business continued to pursue portfolio premiumisation with ‘Dark Fantasy Choco Fills’ witnessing further acceleration in growth momentum driven by superior product attributes, focused communication, efficient distribution and consumer activation,” ITC announced during Q2 results. Even in candy business as well, the company recorded traction for products that are priced at Rs 1 and above.
ITC Fabelle lineup fattens
Fabelle, ITC’s premium offering in chocolate and confectionery business also saw new product roll outs in the Q2 of FY20. “During the quarter, the Business launched ‘Fabelle’ Dark Gianduja, and a range of assorted chocolate gift packs and hampers,” ITC said in a statement. The company also recently launched Trinity- Truffles Extraordinaire, which will sell for Rs 1 lakh for a 15-piece truffle box.
Meanwhile, ITC said that its segment revenue grew by about 6.5% thanks to Premium Cream Biscuits and other items in the branded Packaged Foods Businesses.