FMCG sector noticing consumer shift toward regional brands: Mamaearth co-founder
What's the story
The fast-moving consumer goods (FMCG) sector is witnessing a major shift in consumer preferences, with an increasing number of people opting for newer and regional brands. This trend is being driven by the demand for value and local preferences. Varun Alagh, the Chairman and CEO & Co-founder of Honasa Consumer, spoke about this change in an interview with PTI. Honasa Consumer is the parent company of Mamaearth and Derma Co.
Market dynamics
Regional brands offer better margins to distributors
Alagh noted that regional brands are giving tough competition to large, established players in the FMCG sector. He attributed this trend to aggressive pricing and better margins for distributors offered by these new entrants. The Honasa CEO said, "Overall, there is a consumer shift happening toward newer brands, regional brands... as large FMCG (companies) are not growing as strongly."
Strategic shift
Vernacular strategies to connect with consumers
Alagh also highlighted that new FMCG brands are younger and have new propositions. They are focusing on strong vernacular strategies to connect with consumers. After the latest June quarter results, large FMCG companies such as Britannia, Dabur, Marico, and Hindustan Unilever Limited (HUL) have acknowledged competition from small regional brands in their product categories.
Growth strategy
Double-digit growth for Honasa Consumer
Commenting on the overall FMCG industry growth in the June quarter, Alagh said it has been "subdued" with no major volume gains. However, he added that at Honasa Consumer, "volume growth is actually double-digit in nature." He also predicted a double-digit volume growth for his company in the remaining three quarters of FY'26.
Market response
Britannia, HUL acknowledge competition from regional players
Britannia Industries' Vice Chairman & Managing Director Varun Berry recently acknowledged the competition from small players. He said that with a 'war chest' ready, the company is prepared to "fight many battles in smaller territories" against regional players. HUL CFO Ritesh Tiwari also admitted competition in the detergent bar category, which has "multiple players, global players, local players."