In this episode, hosts Sudeep Chawla and Sharavana Raghavan dissect the challenges facing regional FMCG brands in India. With recent reports highlighting their slowing growth, Sharan connects the dots between market dynamics, the Long Chew phenomenon, and why many of these brands are struggling to sustain momentum.
The discussion covers:
Why Regional FMCG Brands Are Slowing Down
The Growth Illusion: Many regional brands saw rapid expansion, but it was driven more by external factors like inflation and commodity pricing than by strategic business building.
- The Push Sales Trap: Instead of creating consumer pull, these brands rely on distributor incentives, retailer credit, and discounts—leading to cash flow challenges.
- The Competitive Reality: Large FMCG brands are regaining lost ground as price stability returns, exposing the weaknesses of regional players.
Lessons from Global Private Labels
- Retailer-Backed Growth: Unlike regional FMCG brands, private labels in the West (e.g., Tesco, Lidl) have retailer support and invest in brand-building, making them resilient beyond just low pricing.
- Beyond Discounts: Successful private labels position themselves strategically, offering both affordable and premium choices, rather than competing purely on price.
What Regional FMCG Brands Must Do to Survive
- Shift from Push to Pull: Brands must invest in positioning, storytelling, and trust-building instead of short-term sales tactics.
- Stop the Discounting Cycle: Prioritize business discipline—sustainable pricing, cash flow management, and long-term value creation.
- Distribution Done Right: Expanding reach isn’t enough; efficient servicing of existing stores is key to long-term success.
- Brand Building Beyond Advertising: Every business decision—from packaging to pricing to customer experience—contributes to brand perception.
Key Takeaways
- Sustained growth comes from strategy, not market conditions. Regional brands that thrived in inflationary periods now struggle as prices stabilize.
- Discount-driven sales are a trap. They create temporary volume but no brand loyalty, forcing businesses to start from scratch with every sale.
- Branding isn’t just about advertising. It’s about clear positioning, trust-building, and ensuring repeat purchases.
- Retailer-backed private labels offer key lessons. Indian regional brands must go beyond price wars and invest in category positioning.
- The long-term win lies in brand equity. Businesses that prioritize consumer experience and value creation will stand the test of time.
Quotes
"If every sale resets you to zero, you’re not building a business—you’re just running on a treadmill."
"Brand building doesn’t need money—advertising does. Your business decisions define your brand."
"The illusion of choice disappears when small brands don’t survive. Regional businesses are critical for a diverse, thriving FMCG industry."
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