India’s fast-moving consumer goods (FMCG) space is going through a quiet revolution. For decades, the sector was largely steered by corporate giants like Hindustan Unilever, Nestlé India, ITC, and Tata Consumer Products. Their sheer scale, brand legacy, and distribution networks gave them the upper hand. But now, smaller regional players are rewriting the rules. And what’s interesting? They’re not just surviving—they’re thriving, often outpacing the big names in growth.
These up-and-coming brands are connecting with consumers on a more local and personal level. They’re not trying to win over the entire country at once. Instead, they’re going hyper-local—focusing on a handful of neighbourhoods, a few pin codes, or even a single town. This sharp focus is allowing them to create products that truly resonate with local tastes, traditions, and expectations.
Suresh Narayanan, Nestlé India’s outgoing MD, recently acknowledged this shift. He said that smaller players are actually helping the industry grow by expanding choices for consumers and pushing larger companies to improve and evolve. According to him, the younger generation—especially Gen Z and Gen Alpha—isn’t too concerned about brand legacies. What matters to them is relevance. “Just because their parents consumed a brand doesn’t mean they will too,” he pointed out. “Maggi still has to earn its place on the plate.”
Brands like Balaji Wafers, Rungta Tea, Mario Biscuits, and 1to3 Noodles are great examples. They’re giving stiff competition to well-established names in categories like snacks, noodles, and beverages. Their secret? Deep local knowledge, quick adaptability, and affordable pricing without compromising on quality.
Why Small Brands Are Winning
India’s diversity is a tough challenge for national brands to crack. A product that works in Mumbai might flop in Mangalore. That’s where smaller players have an edge. They know their customers, often quite literally. They understand local ingredients, flavours, festivals, buying habits, and price sensitivities. And unlike large conglomerates, they can launch new products quickly, test them in small markets, tweak them if needed, and scale gradually.
These companies also keep their operations lean. Their supply chains are mostly local, and they don’t spend billions on advertising. This means they can offer products at competitive prices—something that matters in a price-sensitive market like India.
They’re also innovating in ways the big brands can’t. Many small snack and beverage brands are reviving traditional recipes, using regional ingredients, or bringing in fresh formats that reflect local culinary trends. Their products feel more ‘homegrown’ and often strike an emotional chord with consumers.
The rise of quick commerce platforms like Blinkit and Instamart, along with the increasing dominance of e-commerce, has levelled the playing field. Small brands now have direct access to customers without having to fight for shelf space in retail stores dominated by the big guys.
Investor Attention Is Shifting Too
With sluggish growth in metro cities and the big players struggling to maintain pace, investors are increasingly betting on nimble, emerging FMCG businesses. Brands like Moi Soi (noodles and condiments), Iscon Balaji (frozen food), Dermabay (skincare), and Bindu Jeera (beverages) have all attracted funding or interest from private equity firms.
Recent funding rounds for brands like Lahori Zeera and Country Delight (each raising over Rs 200 crore) show how investor appetite is tilting toward regional stories with national potential. These brands are proving that premium doesn’t have to mean elite—it can come from a small town and still find eager buyers.
As Kannan Sitaram from Fireside Ventures put it, “We assumed premium products were only for metros. But that’s no longer true. Smaller cities are ready for better products, and platforms like e-commerce and q-commerce are making them more accessible.”
Big Brands Are Taking Notes—and Action
The dominance of smaller brands has been a wake-up call for the larger players. Some, like Nestlé India, are no longer seeing them as mere competitors. They’re exploring ways to collaborate, learn, and co-create. Nestlé’s accelerator program is one such initiative aimed at working closely with startups and learning from their agility.
Larger FMCG companies are also investing more in digital transformation, D2C models, and product customisation. The idea is simple: stay relevant or risk becoming obsolete. That means faster go-to-market strategies, better engagement with younger consumers, and a sharper focus on local preferences.
Big companies are also pushing for premiumisation in categories where it makes sense—think artisanal chocolates, specialty coffee, nutrition, and pet care. But they’re walking a tightrope. They have to offer premium value while keeping affordability in mind. If they miss that balance, they risk losing more ground to local upstarts.
Narayanan summed it up well when he said that smaller brands are good for the ecosystem. They keep the big players on their toes and prevent stagnation. “Sure, there’s a pricing war,” he admitted. “But we have other strengths to offer. We just have to keep evolving.”
What Lies Ahead
India’s FMCG space is clearly in transition. The days of one-size-fits-all are fading. Instead, brands—big and small—must think small to grow big. Success will come to those who are willing to listen to the consumer, act fast, experiment fearlessly, and stay grounded in regional insights.
In this new normal, the story isn’t about David versus Goliath. It’s about collaboration, adaptation, and co-existence. And for the Indian consumer, it’s the best of both worlds.
