Festive Marketing: FMCG brands bullish on consumer buying sentiments

Market sentiment is expected to be buoyant during the festive season this year after a subdued period for the last two years post demonetistion and implementation of GST in the country. The FMCG category is the 4th largest sector in the Indian economy and has been growing steadily. In 2018-2019, the sector is slated to grow at 9-9.5 per cent CAGR. The category has shown 10 per cent rise in spends, giving a clear indication that the market is bullish and the festive season this year will be exciting for the marketers. 

Brands are all arming themselves with high decibel festive season campaigns, marketing strategies, deals & discounts, as well as innovative on-ground and on-air activations. 

Consumer Buying Sentiment 

Mayank Shah, Category Head, Parle Products Pvt Ltd, is positive is about the festive season this year. He said, “In the last two years, though the monsoon was good and we were expecting good consumer sentiment, some factors like GST kept us from driving the full potential. However, this year we don’t see any major changes happening from the government side, besides Indian has seen a monsoon season. So, this year we are expecting a decent growth in income in both urban and rural markets.” 

He further said, “Festivals add a major boost in demand. With all this, overall, we are expecting good uptake in sales in this particular year, especially during the festive season.” 

The festive season, especially in India, revolves around food. Sanjana Desai, Chief Strategy Officer, Desai Brothers Ltd. (Food Division – Mother’s Recipe), said, “We expect to see a surge in the consumer buying sentiment during this season, in some parts due to the special promotions and sales that brands are likely to put forth.” 

She further explained that the last two years saw a dip in overall buying sentiments on account of demonetisation and GST. However, since then the category has been growing steadily, and has also seen a surge in rural consumption at 9.6 per cent CAGR, which she is confident, will result in buying habits returning to the norm this festive season. 

According to Bashab Sarkar, Senior Vice President – Media, Emami Limited, this year is supposed to be the Consumption Year. “All indicators are showing a spurt in demand or a growth of at least 10 per cent from this festive season to the run-up to the Elections. With the first quarter GDP growth of 8.2 per cent and a good monsoon, it seems that India has been able to overcome the impact of GST implementation and is on a growth path with CRISIL estimating 7.5 per cent growth this fiscal year. Auto, being a clear indicator, is very vibrant and so are the durable manufacturers, who are ready to make the best of this festive season, holding their prices,” Sarkar added. 

“Companies are expected to spend Rs 25,000 crore on marketing and promotions this festive season, a jump of 10 per cent over that of last year. Industries that are expected to drive the maximum growth on the back of rural demand and a good monsoon are fast-moving consumer goods, automobiles and two-wheelers and handsets, especially through sales by e-commerce platforms during the festive season. This year’s festive season for e-commerce companies is expected to begin in the second week of October and may include multiple sales events staggered up to Diwali a month later. Many expect it to go till Christmas,” he further stated. 

The dairy and ice cream category has been growing and will continue to grow as accessibility and affordability keep on improving in Tier1 and 2 towns. Vincent Noronha, Vice President, Head of Marketing, Havmor Ice Cream, commented, “Looking at the new product launches or big day announcements by e-commerce players, it only points in one direction that the consumer demand has been on the rise and will continue. On the other hand, monsoons have been better which has boosted confidence and this can be seen in the rise in sales of two-wheelers, jewellery and even consumer durables.”  

Advertising spends expected this festive season 

According, Sanjana Desai, commented that the festive season, being a high-sales season, has always been a priority for Mother’s Recipe. A considerable amount is spent on ads during the season, including ATL and new mediums like digital media, which is a high traction medium for our core target audience. Mother’s Recipe is planning to use local media vehicles & cinemas for better connect with the local consumers. 

Talking about Emami’s spends during Festive season, Sarkar, said “As per Emami our Brand spends will gather momentum from end of Sept and carry through to December. Ours are a clubbed activity where we take the festive as the start, with specific Festive related promotions and then carry forward through the winter months.” 

“We are expecting at least 20-25 per cent increase in growth over last year during the festive season,” affirmed Parle’s Shah. 

Meanwhile, Noronha of Havmor Ice Cream, said that his company would be spending 25-30 per cent of its annual budget over the next 3 months during the festive season. 

Festive plans 

“Mother’s Recipe’s priority is to be visible in the retail outlets by means of POS, in-shop/on shop activities and will be putting more focus on increasing trials by doing wet sampling at different Puja pandals across major cities,” said Desai. 

Shah added here, “While the festive season starts from Raksha Bandhan, but at Parle we started it from Independence Day, which is before Raksha Bandhan, with our latest digital campaign. We have seen a very good response in terms of increase in demand of sales velocity and demand for products during big days have been very encouraging, which has made us believe that going forward during the festive season, we will probably see good increase in demand. This would probably be one of the best years.” 

Havmor’s Naronha informed, “Last year we introduced the ‘Cool Gaiz’ duo in our TVC. Until now their presence was mere virtual/ digital. This festive season, throughout Navratri, Diwali, Christmas and EDM events towards the year end, we plan to get this duo interacting with the audiences in reality. With this, we want to want to amplify the synonymity of milk and ice creams with Havmor. For Diwali, we are working on specific plans, which will marry ice creams with the festive thoughts of gifting.”  

Growth in terms of consumer spends 

“As per the FMCG categories we are in, it has shown 10 per cent growth in spends, giving a clear indication that the market is buoyant and this festive season will be exciting. The media platforms that will garner ad spends will be mainly TV and digital,” Sarkar pointed out. 

According to Desai, “The pickles category, in which Mother’s Recipe is a market leader, is expected to grow at 10.7 per cent CAGR. The numbers prove that consumer spends are on the rise and will continue to see growth through the season.” 

She further elucidated that Mother’s Recipe would be a spending major part of its marketing budget during this festive season to get the traction from consumers. Although a major chunk of the Mother’s Recipe ad spends still goes towards the traditional advertising medium, especially BTL, there has been an increasing shift towards new mediums like digital media. Digital media is the most effective tool to ensure that the correct brand messaging reaches the brand’s specific target audience. 

“This is that time of the year when consumers don’t mind spending a few extra bucks on indulgence. We will have a couple of festive centric flavours/ packs which will be priced marginally higher than the regular offering. At parlours, we have some custom-made products which are priced higher than the regular ice creams scoops. We expect higher volumes on such products during the season,” affirmed Naronha.