Festive Fervor: Season Brings Joy For FMCG Firms Over the years, the consumer-buying patterns have changed and keeping the trends in focus, Haldirams, Bikanervala Foods and Mondelez India are coming up with expansions and investments to up its game during the festive season

As we step into the festive fervor, it's the time of the year when consumers expend more. Loosen your purse's string or you lose the vibe. During festivals, celebrations transcend boundaries and FMCG companies are inundated with demand. Brands already experienced a significant spike in sales during the recent Raksha Bandhan and Ganesh Chaturthi holidays, which illustrates consumer excitement. Over the years, the consumer-buying patterns have changed and keeping the trends in focus, Haldirams, Bikanervala Foods and Mondelez India are coming up with expansions and investments to up its game during the festive season.

Ramping Up Investments

Haldiram has developed state of the art facilities, infrastructure, advanced machinery with skilled labor to meet the greater demands. "We have never stopped investing in technological upgrades and these have made it so much easier for us to cater to corporate orders, individual bulk orders, personalized orders," said Neeraj Agarwal, director, Haldiram's Food.

The company has introduced a huge variety of hampers increasing its portfolio by 20-25 per cent. Haldirams has introduced more than 20 new products and assortments in hampers, "We have worked hard to give our customers extended shelf life with the help of technology and innovative packaging," Agarwal added.

In 2022, Bikanervala Foods experienced a 25 per cent surge in sales, setting a robust foundation for the upcoming festive period. To efficiently meet surging demand, reduce transportation costs and ensure swift delivery to Tier 2 and 3 cities and rural areas, the company has inaugurated a state-of-the-art plant in Greater Noida. The company's investments and marketing spent during the festive season increases to more than 50 per cent. "With an optimistic outlook, we anticipate a 40 per cent increase in sales this Diwali as part of our broader goal to achieve a turnover of 1,800 crores by FY 2023-24. Our strategic initiatives include expanding manufacturing facilities, strengthening our global presence with frozen products, and upholding the highest product quality and safety standards," said Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt Ltd. Also, in conjunction with the ICC Men's Cricket World Cup coinciding with the festive period, a surge in sales is anticipated throughout the October–December quarter.

Mondelez India introduces festive packs every season and keeps revisiting the packaging configuration and design after every 2-3 years to keep up with the consumer demand. "We are optimistic about this festive season as we received a positive response during Rakhi. Like every year, we're leveraging a segmented portfolio approach to cater to the diverse preferences of our consumers. As we approach Diwali, Cadbury Celebrations will continue to shine across all our sales channels, both online and offline, building on our success from previous years," said Desmond D'souza, senior director, sales, Mondelez India.

"We place great importance on the festive season and plan to invest significantly in advertising and marketing. We aim to build a visually compelling setting for the Cadbury Celebrations portfolio showcasing the wide-ranging portfolio that caters to all kinds of consumers. We also continue to re-visit the pack configuration frequently. Case in example – last year we introduced the Cadbury Silk Pralines as part of the premium offering which was a huge hit, and it will be available this year as well," D'souza added.

Urban v/s Rural Demand

As the festival season commences in India, there is a notable resurgence in the demand for fast-moving consumer goods (FMCG) in rural areas. Urban demand has stabilized, and the rural market is showing promising signs of returning to normalcy. This positive trend is attributed to the alleviation of inflationary pressures and the upswing in agricultural earnings, contributing to a gradual recovery in these regions. Additionally, a range of government initiatives, such as the implementation of the minimum support price (MSP), augmented investment in rural infrastructure and increased credit accessibility for agriculture and other non-agricultural economic pursuits, are expected to enhance employment opportunities and income levels in rural areas.

"These initiatives will stimulate the demand for FMCG products in rural areas. During festive seasons, the urban and rural distribution of sales typically undergoes distinctive patterns. Examining the trends, in February 2023, urban areas saw a commendable growth of 5.5 per cent in sales compared to the same period in the previous year. Impressively, rural sales surpassed this figure with an even more remarkable expansion of 12.4 per cent," said, the director of Bikanervala Foods, adding that the data underlines the robust performance of the rural sector, playing a pivotal role in driving double-digit growth in FMCG sales. This surge in sales wasn't uniform across all product categories. In fact, in five out of six categories, rural areas demonstrated a superior sales performance when compared to their urban counterparts in February 2023. This trend underscores the significant influence of rural markets in shaping the FMCG sales landscape, especially during festive periods.

"Unlike the broader trend, the rural market continues to be a strong growth pillar for us even during this season as we continue to expand our reach in the region throughout the year, said D'souza, senior director, sales, Mondelez India.

The disparity in growth rates between urban and rural areas indicates a notable shift in consumer behavior and purchasing power dynamics. It highlights the increasing significance of rural markets and their potential to contribute significantly to the overall sales figures, especially during festive seasons.

Despite global uncertainties, India's FMCG market remains robust, with a projected growth of 7 per cent to 9 per cent for the entire year of 2023. There exist potential challenges, including inflationary pressures on consumers. Initiatives outlined in the Union Budget 2023 concerning agriculture and capital expenditure investments, adjustments in the tax framework, the RBI's forecast of a 6.4 per cent GDP growth for the upcoming fiscal year and predictions of normal rainfall could all serve as positive catalysts in the FMCG sector.