In a David-versus-Goliath showdown, regional Fast-Moving Consumer Goods (FMCG) companies in India are taking on the big industry players, reshaping the competitive landscape. Among these bold regional contenders is Rajkot-based snacking company Balaji Wafers, which has attracted the attention of industry giants like PepsiCo’s Indra Nooyi. Balaji Wafers is now establishing its maiden manufacturing facility in North India, precisely in Lucknow.
These regional FMCG brands are rapidly expanding and diversifying their operations, intensifying their rivalry with their national counterparts. They have outperformed the national brands, achieving double-digit sales growth over the past two quarters, particularly with inflation rates stabilizing.
Prominent names in this uprising include Rungta Tea, Balaji Wafers, Mario Rusk, and Bovonto soft drinks. These regional players have bolstered their brand visibility and market presence, emerging stronger following the pandemic disruptions.
Rungta Tea, operating in markets such as Uttar Pradesh, Rajasthan, and Bihar, is making strategic moves by establishing tea parlours akin to Chai Point and Chaayos. Additionally, they are assembling an e-commerce team to extend their footprint.
Girjesh Rungta, Managing Director of Rungta Tea, commented on their success, saying, “We are growing faster than many national brands in markets we are present in and have relationships with distributors and customers. Now we are moving to the next level with tea parlours and e-commerce, while continuing with quality and innovation.”
A recent report by the Kantar World panel revealed that local brands experienced 12.7% growth in volume between April of the previous year and April of the current year, outpacing national brands, which grew by 8.2%. The success of regional brands has been attributed to their innovation and expanded distribution networks.
Chandubhai Virani, the founder of Balaji Wafers, shared their expansion strategy, stating, “Our expansion plan is to go across India, well beyond Gujarat, one territory at a time. We will continue to follow our value-for-money strategy.”
This trend of regional FMCG giants going national is not limited to a single category. It spans various sectors, including snacks, tea, biscuits, detergents, soaps, and toothpaste. Key industry insiders emphasize the pivotal role of ownership in driving the success of regional brands, highlighting the direct involvement of founders in operational activities. This hands-on approach provides them with agility and quick response capabilities to navigate market challenges effectively.
Sumit Agarwal, co-founder of Vitrak ExtendReach, a traditional trade distribution platform, noted, “They also have a razor-sharp focus on the category. Unlike, say, an HUL, these brands don’t focus on different categories at the same time. Also, they operate with no frills; they are able to give enhanced value to the consumer.”
Bovonto Soft Drinks, known for products like orange and ginger ale fizzy drinks, is charting plans to expand beyond its core markets in Tamil Nadu and Andhra Pradesh. In a significant move, Mario Rusk has enlisted actor and singer Diljit Dosanjh as its inaugural brand ambassador.
As regional FMCG players continue to disrupt the status quo, it remains to be seen how this fierce competition will shape the future of the industry, potentially providing consumers with more choices and innovative products.