FMCG major ITC makes big push for small packs

Diversified conglomerate ITC Ltd is looking to aggressively focus on small value packs for better penetration of offerings and greater accessibility.

In recent times, it has introduced small value “innovative” packs of ₹60 — called pocket perfumes — for its ‘Engage’ brand of deos and perfumes. It also brought out a ₹5 pack of Savlon handwash earlier this year.

Until recently, ITC had restricted its smaller sized offerings mostly to the packaged food, snacks and beverages segments (under Bingo and BNatural brands), and to shampoos (Vivel brand), that too in select markets.

In 2013, the company experimented with small value packs of Vivel soap, targeting the popular segment, sources said. According to Sameer Satpathy, Chief Executive, Personal Care Products Business, ITC, India is an under-served and under-penetrated market in most categories. Smaller packs are a critical lever to expand reach.

“We have smaller packs across categories like personal wash and shampoos,” he told BusinessLine in an emailed response.

Explaining the rationale behind having an offering in the sub ₹100 perfume segment — rather than deodorants — Satpathy said the Indian consumer tends to use a deo like a perfume at the mass end of the market. Based on this, the company introduced its pocket perfumes under the ‘Engage On’ brand.

“In India, small value packs are as popular in metros as in rural markets. Small value packs help consumers to experiment more often. For a marketer, it is a definite opportunity to ensure that their brands continue to remain in the consumer’s monthly purchase baskets,” he added.

ITC is not the only FMCG major focussing on low unit packs. These packs are estimated to account for 30-40 per cent of FMCG sales irrespective of the geographic profile of the customer.

Until about a decade back, smaller offerings were primarily meant to target rural markets. However, all that changed with neighbourhood kirana stores witnessing rising demand for such packs.

A city-based FMCG distributor said categories like instant noodles and personal care see faster movement in the small value segment than in their larger counterparts.