Disruption in FMCG segment

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Mohit Jalan, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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As the people have become more conscious towards health and environment, the use of consumption of organic products has increased in the developed countries. The natural and organic farming is growing at a healthy rate as more and more people have started using natural and organic products in developed country and further growth in this industry is complimented by high per capita income in the developed world.

In India, the natural products were sold by companies like Vicco, Dabur and other regional players and they have significant market share in FMCG category. But recently Patanjali has entered in this industry and has gained a significant market share in the natural category. This has made even the big players like HUL, ITC to change their strategy. To be sure, consumer companies have accelerated their focus on ayurveda and herbal companies. HUL acquired Kerala-based hair oil brand Indulekha which has strong credentials in ayurveda in December. In June, Emami Ltd entered the rapidly growing ayurvedic hair and scalp care category by buying hair and scalp care business under the Kesh King brand from Himachal Pradesh-based SBS Biotech Pvt. Ltd.

Others like Godrej Consumer products Ltd are stepping up on the pace of product launches in the herbal and ayurveda category. “We will accelerate our herbal journey and provide a lot more herbal options,” said Viveka Gambhir, managing director, GCPL while pointing out that in its soaps portfolio, already every variant available has a natural ingredient in it and the company has also launched hair colour and insecticides like Good Knight coils in a neem variant.

 

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