Local FMCG (Fast-Moving Consumer Goods) brands are swiftly expanding, intensifying their competition with national brands. They have surpassed national brands by achieving double-digit sales growth in the last two quarters, taking advantage of a decrease in inflation.
Regional brands like Rungta Tea, Balaji Wafers, Mario Rusk, and Bovonto soft drinks are bolstering their presence by expanding, diversifying, and enhancing brand recognition. They have emerged even stronger in the aftermath of pandemic disruptions.
Rungta Tea, operating in markets such as Uttar Pradesh, Rajasthan, and Bihar, is establishing tea parlors akin to Chai Point and Chaayos while assembling an e-commerce team to expand its footprint.
“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 ecommerce, while continuing with quality and innovation,” said Girjesh Rungta, managing director of Rungta Tea.
According to a recent report by Kantar Worldpanel, local brands experienced a 12.7% growth in volume from last April to this April, surpassing the 8.2% growth rate of national brands. This growth was attributed to the innovation and expanding distribution networks of regional brands, as stated by the consumer monitoring firm.
Rajkot-based snacking firm Balaji Wafers, which has been aggressively wooed by PepsiCo’s Indra Nooyi and other large snacks giants, is setting up its first plant in North India, in Lucknow. “Our expansion plan is to go across India, well beyond Gujarat, one territory at a time,” Chandubhai Virani, Founder of Balaji, said. “We will continue to follow our value-for-money strategy.”
Executives mentioned that the movement of regional market leaders expanding their reach nationwide is evident across various product categories such as snacks, tea, biscuits, detergents, soaps, and toothpastes.
“The key is ownership. We see regional brands primarily driven by founders who are directly involved in operations,” said Sumit Agarwal, Co-Founder of Vitrak ExtendReach, a platform for traditional trade distribution. “That gives them the nimbleness and quick response time to market challenges.”
They also have “razor-sharp focus on the category”, he said. “Unlike, say, an HUL, these brands don’t focus on different categories at the same time,” Agarwal said. “Also, they operate with no frills – they are able to give enhanced value to the consumer.” Bovonto soft drinks is laying out plans to take its products such as orange and ginger ale fizzy drinks, beyond its core markets in Tamil Nadu and Andhra Pradesh. Mario Rusk has roped in actor and singer Diljit Dosanjh as its first brand ambassador.