The festive season in India is probably the most enriching and interesting time for brands and marketers across categories. Especially in a year like this, when hordes of revenge shoppers are expected to splurge after a lull, the market seems glowing with positivity and hope. And for the snacking category, it seems like an added boost of goodness after the growth it has witnessed during the lockdown. “Mithai and Namkeen Times” finds out how the various popular snacking brands are gearing up for the festive season and their expectations of the market.
What is happening?
Our eating habits have changed quite a bit over the last 18 months. Gone are the days when we’d have three square meals a day, and indulge in a few snacks here and there. Today, we’re devouring anything that comes our way – biscuits, cookies, chips, instant noodles, salty snacks, sweets and whatnot on a near-constant basis.
The main reason for this insatiable appetite is our changed lifestyle and changing mind-set. From the way we work to the amount of time we spend on social media, there is a lot of pressure now. Snacking is an easy way to distract you from that. It gives you a break and makes you feel good.
We have lunch at 1 p.m. and dinner is at 8 or 9 p.m. An eight-hour gap between meals gives rise to many snacking occasions. Add a serious dearth of physical activity, and no wonder that we feel hungry all the time. As expected, brands now see another golden opportunity to occupy our minds through our tummies.
Like Lay’s chips, want to become the go-to snack, while Nestle Maggi is pitching itself as the answer to your unplanned hunger pangs. KitKat wants you to relax and take a break with it, and ITC Sunfeast wants you to end your day with its Dark Fantasy cookie. We have the McCains and ITC Masterchefs of the world that best represent the ready-to-cook (RTC) category. Ever since the COVID pandemic struck, this category has become quite popular. Then there are the new entrants – momos, with brands like Wow! Momo and Prasuma coming into the picture.
When it comes to snacking options, Indian brands are not all that far behind their western counterparts. Like packaged potato chips, Kurkure-like snacks and ethnic snacks like bhujiyas.
These ethnic snacks used to be made by our mothers and grandmothers or by caterers for special occasions, or by halwais on the street-kiosks. Today, none of them exist in a big way. Now, we have packs of regional snacks. A couple of weeks ago, Parle Products added three new namkeen flavours to its ‘Chatkeens’ brand, taking the total count to 19. The pandemic has triggered a lot of snacking and about 45-50 per cent of traditional namkeen sales happen during the festive season.
Festivals bring cheer
As mobility restrictions ease, the packaged food and beverage industry is eyeing a stronger festive season compared to last year. Industry players are also hoping that the festive season will bring some semblance of full normalcy, especially in terms of demand recovery in urban regions. This festival season is bringing cheer for consumer goods companies as households stock up for the holidays. After FMCG sales tapered off nearly 14.5 percent in August, sales were up about 2.2 percent in September, and this time, sales were led more by discretionary items like snacks, sweets, and beverages that households stock up on during festivities.
According to Bizom data, sales of packaged foods increased by 95 percent year on year in the run-up to the holiday season, led by ready-to-eat products and rising out-of-home consumption. The uptake for RTE products was very low last year. Sales increased by 61.5 percent year on year, owing to significantly higher availability this year versus last year at this time. Despite the fact that the peak season for beverages is typically from March to June/July, with September being an off-season, beverage sales are up nearly 23 percent. Despite discretionary products driving sales, sales of commodities or staples have also seen a consistent rise.
Accordingly, FMCG majors are also lining up launches of new products, gift packs and are rolling out several festive offers.
How packaged food is cashing on this festive season
With gradual unlocking, a decline in Covid cases, and systematic vaccination drives, the FMCG industry has witnessed a demand pick-up over the last couple of quarters. This augurs well for the festive season, as consumers are looking forward to celebrating with their loved ones.
There is a strong expectation that this Diwali will definitely be much better than the last one. But, we will have to wait a few more quarters to really be sure that this is sustainable demand that is here to stay and this is not some last vestiges of pent-up demand. Nestle, for example, will capitalise on the opportunity by launching new products in the confectionery, coffee, and prepared dishes segments during the holiday season.
Besides the new launches, companies are also gearing up for the launch of special festival packs for gifting. For products such as salty snacks, chocolates, dry fruits, and sweets, the four months of the festive season typically contribute about 40-50 per cent of the annual sales. The festive season, however, also comes amidst rising commodity pressures and concerns around a third wave.
ITC says that this year, the sector is expected to receive a much-needed boost both in the urban and rural markets during the festive period with augmented traffic building events in modern trade and e-commerce. ITC is planning to actively participate in the upcoming festivities – both national and regional – with a bouquet of special offers, gift pack offerings, focused product sampling, unique marketing activations, real-time moment marketing initiatives led by the ITC Sixth Sense Command Centre, as well as a host of new launches around the festive theme to boost excitement around key ranges. Some of the categories under focus would be biscuits, frozen foods, the health range of foods, premium skincare, and home care, among others.
Parle is also optimistic about the holiday season, forecasting a 12-16 percent increase over last year, with demand increasing in the salty snack, confectionery, and bakery categories. Parle is launching three new variants in salty snacks, along with gifting solutions. A special focus for Parle this time will also be on the confectionary category where it will be launching gift packs called ‘Candy Culture’ in October aimed at the festive season.
Also, Cornitos expects to see higher sales than last year as consumers are now stepping out to buy products. This year, they anticipate a 15-20% increase over the previous holiday season. Cornitos is launching a new range of baked snacks that will promote healthy snacking and will also bring innovative festive packs. It has also introduced e-gift cards exclusively on the Cornitos’ e-commerce site for gifting.
Companies like Cornitos will also leverage on digital platforms for promotions and discount offers.
Weikfield Foods remained cautiously optimistic and said that the start of the festive season, which was Ganpati, has been good for us, and we look forward to the continuation of the consumption momentum till the rest of the festive season, including Christmas.
Pleasures and Gifts
The reason behind the festive season being a good time for snacking brands is two-fold; people are more open to indulging in the guilty pleasures of munching, and the snacks make an incredible gifting option too.
The industry believes that this year is going to be a bumper one for the category as the second wave of Covid is long past and the third wave is mild in most parts of the country.
In research done, four types of shoppers were identified, and we called them Revenge Shoppers, Restricted Shoppers, Revelation Shoppers, and Research Shoppers. When it comes to buying snacks, the behaviour will be uniform across all categories. These are what may be called ‘guilty pleasures’, those little things that you indulge in. The pandemic has also pushed consumers into adopting ready-to-eat and ready-to-cook products. Packaged products like ready-to-eat parathas, idli and dosa batter have had a boom time. Festivals will see this trend further accelerate. Hopefully, companies will restore the Diwali Bonus and consumers can once again start enjoying their Diwali.
Most snack companies spend somewhere around 60% of annual marketing budgets between July and December, a uniform distribution of 30% each in both the quarters. It is because the festive season begins from July-August in large portions of the country; there are Shraddh, Raksha Bandhan, Onam, Ganpati, etc. And that’s the big opportunity to reach out to the relevant customers.
Therefore, Brands Are Spending
This year too, top snacking brands are bringing up their A-game to make the most of the quarter, and are spending anywhere between 20% and 40% of their marketing budgets now.
The festive quarter amounts to 40-50% of overall sales every year, and this year, as the country is in a positive space after months of pandemic stress, people are expecting it to be even better and have upped their marketing spending by 15%.
Parle Products has also launched a slew of new products just ahead of the season and will attract modern customers. It launched products like light chivda, primarily for the fitness conscious, and Gujarati mixture, which doesn’t have much presence in the market despite the amazing flavour profile. There couldn’t have been a better time to bring these products to the market.
Another top brand, Bikano, too launched a variety of new flavours just at the onset of the festive season. Its new extrude range is directed towards kids and the younger population. Bikano launched new products in the traditional snacks, western snacks, sweets, and savoury categories and also brought in a new range of delectable chai time snacks. This is an untapped segment as of now as there is no specific brand that dominates this segment. It has roped in Chhota Bheem as brand ambassador for the extruded category, where brands like Yellow Diamond and ITC are quite aggressive.
This year’s marketing is going to be much more aggressive than what they have done in the past few years. With the festive season, it’s a great opportunity for Bikano to engage with the consumer and expect some surge in volumes. There is a possibility of a significant recovery in sales as the festive season approaches, provided restrictions on modern retail are relaxed across the country, allowing smooth operations and a return to normalcy. Modern trade is one of the major contributors since restrictions on modern trade are relaxed. Gifting of packaged salty snacks with a combination of sweets is another area that has gained a lot of prominence over the recent past, and we are expecting a sales surge for our new product ranges during the upcoming festive season. When it comes to our marketing plans, the list is long: new launch, high visibility, digital activations, distributor engagement, and so on. This shall increase even further in the upcoming quarter.”
PepsiCo India too has introduced festive packs and is expecting a grand quarter; the festivities will take a different form this year as well, with homes becoming the new social hub and consumers subsequently moving celebrations indoors. The industry is hoping for an added push for in-home consumption, which is a key trend that continues to grow and drive demand for food and beverages. In line with this insight, special focus was given to value packs across both (food & beverage) our portfolios. While PepsiCo has launched select beverages (Pepsi, 7UP, Mountain Dew) as celebratory packs of 1.25 litres at INR 50 with the aim of making moments of togetherness more memorable, Lay’s introduced new, large-sized ‘@ Home’ packs (at INR 30, 50 & 85) to serve as the perfect companions for its fans in all their in-home experiences.
To add greater celebration to the festive season, PepsiCo India and Airtel have brought back their innovative offering and are doubling down on their partnership to unlock a world-class digital experience by providing 2GB of assured free data with the purchase of select packs of Lay’s, Kurkure, Uncle Chipps and Doritos.”
Bonn Group of Industries is also positive about the possibilities that this festive season brings. Although the festive season last year was not so good for the whole FMCG industry, the second half of 2021 has begun on a bustling note, and we think the industry is set for huge gains, including the bakery sector.
Bonn has raised marketing expenditures during the festive season to tap the maximum number of customers while also targeting potential customers. The bakery company is launching an assorted range of biscuits and cookies under the standard Bonn brand and premium Americana brand and will bring these products in attractive festive packaging for gifting purposes as well. At the same time, they have kept the health trend intact in all our products, using healthy ingredients to promote metabolism and immunity among their consumers.
Close
After the second covid wave, India’s FMCG market recovered faster as compared to the first wave a year ago, helped by higher sales of packaged food, commodities and discretionary categories even as growth of the home care segment slowed down.
The July-September quarter saw 46% growth in total sales by value as compared with a 6% increase in the corresponding quarter last year, which marked a recovery in the segment that was affected due to supply and manufacturing constraints that began at the end of March 2020.
Lockdown was not as stringent and the subsequent opening up saw sales rebounding quickly during the quarter despite a strong base last year. However, a dull December quarter may be expected due to alternative and home-made food products during the festive season.
Also, comparatively moderate restrictions helped steady product supply and distribution of products during the second wave, with an immediate increase in economic activity after the easing of restrictions. Local control measures by state administrations helped ensure strong restrictions only in pockets that had high rates of infection.
Sweets and packaged foods were severely affected last year but these have shown the strongest growth this year. “The only category that seems under any kind of growth pressure this year is home care, where, due to the falling number of Covid cases, the obsessive focus is shifting from health and hygiene products.
Out of home, consumption of fast-moving consumer goods products has also bounced back since August, with an increase in mobility, the opening up of offices, hotels, restaurants, and a rise in travel and social events.
Sales have been robust over the past few months, but hotels, restaurants, and caterers have come back strongly, which has led to higher growth both sequentially and year-on-year. The only challenge is increasing raw material prices, as it will be difficult to pass on higher input costs to end consumers, “ said R.S. Sodhi, MD, AMUL. He also said learnings from last year helped ensure consumers did not pantry load this time, which meant steady growth every sequential month.