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Tag: FMCG

  • Dabur India net profit surges 34% to Rs 378 cr in Q4

    Dabur India net profit surges 34% to Rs 378 cr in Q4

    NEW DELHI: FMCG major Dabur India reported Rs 378 crore in net profit for the quarter ending 31 March 2021, a 34 per cent leap compared to Rs 281 crore during the same period a year earlier.

    The company reported a total income of Rs 2,421.77 crore in Q4, compared to Rs 1,941.13 crore in the corresponding quarter last year. Consolidated revenue surged 25 per cent to close at Rs 2,337 crore for the quarter.

    The EBITDA for the quarter stood at Rs 442.5 crore, while the EBITDA margin was 18.9 per cent.

    For the full financial year, Dabur India recorded a 10 per cent growth in consolidated revenue at Rs 9,562 crore, while consolidated net profit grew 17.2 per cent to Rs 1,693 crore.

    The Real Juice maker also recorded a sequential revival in discretionary spending, mainly in the home and personal care portfolio, which grew by 32.6 per cent. Dabur’s oral care category was the outperformer in this category, reporting more than 42 per cent growth during Q4. The toothpaste segment also witnessed a surge of 45 per cent. The food and beverages business marked a turnaround to report a nearly 28 per cent growth during the quarter.

     

    The consumer goods manufacturer’s strong growth was on the back of efforts to drive demand for its Ayurvedic healthcare, foods, and nutrition products, along with a greater focus on the expansion of distribution, it said in the earnings report.

    Dabur CEO Mohit Malhotra said, “Our strategic business transformation exercise to develop and implement aggressive growth strategies in our core business areas has led to a more flexible company, helping us successfully navigate the emerging headwinds. Dabur’s financial situation remains strong with a 25.6 per cent growth in operating profit during Q4 2020-21.”

  • TV advertising stares at a stressful quarter amid low market sentiment

    TV advertising stares at a stressful quarter amid low market sentiment

    KOLKATA: Television advertising is expected to bounce back this year, courtesy a power-packed live sports line-up. While the January-March period has been exceptionally good for the industry, there has been a sudden reversal since then – IPL 2021 has been halted midway, partial lockdown has been imposed in several states, and the augury of a third wave of the Covid2019 pandemic have raised the question whether the year will pan out as initially forecast. It is for certain that this quarter will be under stress, experts said in a virtual roundtable organised by Indiantelevision.com.

    One of the major talking points at The Television Ad Room, moderated by Indiantelevision.com founder, CEO & editor-in-chief Anil Wanvari, was how the spend on IPL would be reallocated. As the cricket festival is a high-profile media event, cancelling it would result in a massive setback, Madison Media Sigma CEO Vanita Keswani acknowledged. However, it should be taken in true spirits by the advertisers and stakeholders involved due to health and safety concerns.

    Undoubtedly, monies will have to be switched around, plans for upcoming launches and campaigns will need to be recalibrated, panelists concurred. In this highly volatile situation, planners have to be more agile than ever, Keswani noted.

    Policybazaar brand marketing head Samir Sethi agreed that the suspension of the IPL will be tough for brands that planned around the league, albeit the safety angle should be considered. Now, advertisers will have to look somewhere else to make up for the loss of eyeballs. Nonetheless, it would not be possible to fully compensate for the loss due to the mammoth viewership of IPL.

    “We went in with the mindset that what if there is a cancellation. We had a Plan B early on and ensured to be nimble to switchover. Half the event is gone – which is the good news, because there’s exposure for brands to that extent,” OMD India CEO Priti Murthy said.

    Moreover, this May is a month when advertisers don’t want to go aggressive on media. Looking at the market reality, the spike in cases, lockdowns in different states, suspending IPL could be a blessing in disguise; otherwise, advertisers would not have been able to pull out easily. Hence, they can now look at more digital-led, content-led campaigns, Murthy added.

    While a pre-planned strategy can be more focused on content-led high impact digital marketing, Keswani is of the view that the roles of TV and digital are intertwined, not exchangeable. The television spend for IPL will not go totally into digital but can be fragmented and dispersed. However, a lot of the brands may not want to put the same amount of money in the quarter.

    Already, many businesses have decided to go slow and want to look at the next quarter. In addition to that, consumer sentiment is also not right in the present scenario.

    Following the outbreak of the pandemic, several brands had pulled out of advertising entirely last year, but 2021 will not repeat the trend. Although many categories will be affected, this year will see work in motion. For example, auto, luxury FMCG, consumer durables will be affected but essential FMCG, e-commerce will continue to grow.

    “Businesses have figured out a way to operate in this volatile environment. Spends are not going to be completely pulled back in any category. There will be recalibration and rethinking but things are going to keep moving,” Policybazaar’s Sethi commented.

    Yamaha Motor India Sales marketing head Vijay Kaul added that if a brand has already invested money in a regular platform, it’s also not good to hold back. In case of the IPL, it would be wise for brands that have already carried out launches not to stopper their advertising spends and lose the momentum they have gained. There will be a rejig in terms of switching to digital, he agreed, but the brands will back it up with TV too.

    For Yamaha Motor, both TV and digital are the preferred modes of advertising. But with the IPL off the table now, the kind of money that they had set aside may be reallocated to subsequent quarters. While the brand will not pull out of media, it will be cautious with its ad budget given the unpredictability of the situation. However, the two-wheeler maker may double its spends in the festive season again if the current state of affairs improves.

    While every business is differently affected, they will continue to spend depending on the nature, dynamics of business, Sethi said. But brands will try to be very careful when spending big bucks. Big-ticket launches may get delayed in the next one-two months, events like sale days may get postponed, he noted.

    Despite the momentary headwinds, TV advertising will grow this year, at a double-digit rate, experts asserted.

  • Marico Q4: Net profit surges 14.1% driven by volume growth

    Marico Q4: Net profit surges 14.1% driven by volume growth

    NEW DELHI: Consumer goods major Marico has reported a 14.1 per cent year-on-year growth in consolidated profit at Rs 227 crore for the quarter ended 31 March 2021, driven by volume-led strong revenue growth.

    Revenue from operations shot up 34.5 per cent to Rs 2,012 crore compared to the year-ago quarter, backed by robust volume growth of 25 per cent in the domestic business and constant currency growth of 23 percent in the international business, the Saffola oil maker said in its BSE filing.

    The foods portfolio grew 134 per cent in value terms in the quarter and crossed Rs 300 crore in turnover in FY21. “The base oats franchise grew by 84 per cent in value terms, backed by increased penetration and market share gains,” noted the FMCG player.

    Parachute Rigids grew 29 percent in volumes, albeit on a low base, undeterred by price hikes and pullback of consumer offers to counter a part of the input cost push.

    “Value-added hair oils grew 22 per cent in volumes with all of the key brands clocking double-digit growth. Saffola edible oils extended stellar run with 17 per cent volume growth despite a particularly strong base, on the back of investment in new markets and increasing household penetration,” the company added.

    At the operating level, EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 13.1 percent year-on-year to Rs 319 crore but margin contracted 300 bps year-on-year to 15.9 per cent in Q4.

    Advertising and sales promotion grew by 35 per cent as the company invested aggressively mainly in core franchises and food innovations while continuing to drive spending rationalisation and channelising investment towards growing franchises.

    In the international business, “Bangladesh clocked 20 per cent constant currency growth. South East Asia also reverted to positive territory with 13 per cent constant currency growth. MENA and South Africa also gained on a low base,” said Marico.

  • E-commerce may become a major growth driver for FMCG in 2021

    E-commerce may become a major growth driver for FMCG in 2021

    NEW DELHI: If there is one business which has distinctly gained during the unprecedented Covid2019 pandemic, it is e-commerce. And this gain has occurred across product categories and sectors. Building on this advantage, there would be only more traction for e-commerce in the coming year. What will particularly be more noticeable is the entry of a whole lot of new players, both big and small, democratising the e-retail marketplace. However, this expanded and democratised e-commerce marketplace would co-exist with the physical brick-and-mortar retail spaces. These kirana stores significantly enough would forge partnerships with online delivery services while also digitally upgrading themselves with the help of the latter. Therefore, apart from the regular retail formats, there would be more tie-ups with different brands on e-comm platforms.

    The extraordinary growth of e-commerce

    In a report, the Indian e-commerce industry has been projected to grow by 40 per cent in 2020 as compared to 23 per cent in 2019. In fact, it has even been reported elsewhere how during the Covid2019 months, a decade of growth has been registered within just a few months this year. And in terms of cross border growth, the country’s e-commerce sector has been ranked ninth globally. Around the festival season in the second half of the year, major players such as Amazon, Flipkart, Myntra, and Snapdeal made sales worth $3.1 billion in the first four to five days of the festive season sale. And this growth has not remained confined to metros and big cities. An online player reported that 70 per cent of its orders were received from tier-2 and tier-3 towns during Diwali. Once we have seen the last of Covid2019 which is expected in 2021, these figures would grow to become even more impressive. In fact, the e-commerce penetration in the country is expected to cross 10 per cent in the coming five years from the current four to five percent.

    Emerging new players are intensifying competition

    While Covid2019 did pose a stupendous challenge to many small players in the early phases, several of those same affected players soon enough turned this adversity into an opportunity by upgrading themselves digitally and even recasting their product portfolios. While staying at home, a new generation of entrepreneurs called ‘homepreneurs’ has emerged, offering competition to existing players. This will only get bigger and a more competitive retail marketplace including both online and offline will emerge in the coming year.

    Kirana stores taking the digital leap

    At the same time, demonstrating massive momentum on the b2b front, several new players as well as existing players reinvented their business processes by forging links with other players and bigger and stable e-commerce businesses. Many new e-commerce start-ups have come up helping kirana stores or mom-and-pop stores digitize and expand their operational footprints. A cash and carry store had offered digitisation services to kirana stores promising complete digitisation in a span of 24 hours. So a vigorous drive for development of e-commerce platforms for local retailers and grocery stores underpinned by digital payment mechanisms has been underway. This trend is expected to continue in the present year democratising the marketplace further.

    Contactless delivery of ready-to-eat and packaged food to acquire permanence

    During Covid months, the trend towards partnerships between online delivery behemoths and FMCG companies including food brands has been a notable phenomenon. Also, the tie-ups between local food businesses and local e-commerce startups for final delivery of products have been equally noteworthy. In light of Covid-dictated explosion of cloud kitchens and food delivery apps, the near-institutionalization of highly-sanitised kitchen environment, double-layer packaging of food products, deployment of all-round safety gear equipped-delivery personnel, and contact-less delivery services would acquire a more permanent feature. The ripple effect of this new delivery culture would be seen even for the delivery of packaged food for final consumers.

    Trends in shopping spend across categories

    According to market research, in terms of average spend by online shoppers, electronics and accessories (39 per cent) had emerged as the largest product category followed by mobile and accessories (12 per cent); fashion, including apparel, footwear, and accessories (10 per cent); and appliances such as TV, washing machines, refrigerators (nine per cent) in the aftermath of Covid2019 outbreak. However, a management consultancy white paper has revealed that food, grocery, consumer electronics and apparel will be the top e-commerce product categories contributing to sales in the coming five years. Then based on a report by Goldman Sachs, online grocery and fashion/apparels are set to be the biggest drivers of incremental growth in e-commerce in the country.

    M&As and investments to impact domestic e-commerce space

    The last few months have seen considerable investment by foreign social media behemoths such as Facebook into domestic giants such as Reliance Industries which could allow the latter to play a bigger role in the e-commerce market. Then Reliance retail buying out Future Group has been another significant development.  

    Therefore, while 2020 was a year of crisis-driven instant improvisations and restructuring in a broadly subdued business environment, the coming year would see more stability and consolidation of the e-market space. Essentially, 2021 will see businesses adopting more of an omni-channel approach.

    (The author is director, Bikano. The views expressed here are his own and indiantelevision.com may not subscribe to them.)

  • TV advertising shows record growth in Jan-Mar 2021: BARC

    TV advertising shows record growth in Jan-Mar 2021: BARC

    NEW DELHI: The overall growth in television ad volumes during the first two months of the year has further consolidated in March, said Broadcast Audience Research Council (BARC) on Friday.

    According to the television monitoring agency, 456 million seconds of ad volumes was recorded during the January to March period, the highest since 2018.

    The latest data offers a glimmer of hope to the television industry which has been struggling to get back on its feet amid the second wave of Covid2019.

    The growth in ad volume was observed across all genres. While the news genre recorded a growth of 25 per cent, the surge in the GEC space was 21 per cent. The movies genre saw an uptick of 23 per cent.

    According to BARC, growth of ad Volumes on TV observed in Jan-Mar 2021 was broad-based, with advertisers across the spectrum accounting for the higher levels. The top 10 advertisers, as well as the next 40, registered healthy growth at 37 per cent and 31 per cent respectively.

    E-commerce sector continued to show a healthy growth of 13 per cent in January to March 2021 compared with the same period in 2020.  

    The digital-native brands under education (3X growth), pharma/health care (7X growth) and BFSI (55 per cent growth) categories also continued to propel growth of the ECOM sector in Jan to March 2021 compared to 2020. The top 20 advertisers drove more than 50 per cent of ad Volumes during this period, showed the data.

    Festivals and special events like Sankranti and Republic Day in January garnered the highest ever ad volumes in 2021 since 2018, reported BARC.

    With a promising start to the year, the expectations for higher ad spends have definitely gone up for the coming months.

  • Nestle India posts strong Q1 performance, net profit surges 14.6%

    Nestle India posts strong Q1 performance, net profit surges 14.6%

    NEW DELHI: FMCG major Nestle India posted a strong performance in the opening quarter of 2021, reporting a 14.6 per cent year-on-year growth in its net profit. Beating estimates, its PAT stood at Rs 602 crore, up from Rs 525 crore in the year-ago period.

    Total sales increased by 8.9 per cent during the quarter, while domestic sales rose by 10.2 per cent, mainly driven by volume and mix.

    The consumer goods giant’s revenue from operations during the quarter came in at Rs 3,610.8 crore, a surge of 8.6 per cent from Rs 3,325 crore in the same period last year.

    Its e-commerce operations have continued to pay dividends and grew by 66 per cent to maintain its robust contribution to the domestic sales.

    Export sales were lower by 12.9 per cent due to lower exports to affiliates. Demand in out of home channel has improved in the quarter but still remains impacted by Covid2019, the company said in a BSE filing.

    Key brands like Maggi noodles, Kitkat, Nescafé Classic, Maggi sauces, Milkmaid, Maggi Masala-e-Magic have also performed strongly and achieved double digit growth in Q1.

    “As the pandemic rages on, the quarter gone by has been another test of resilience of my team and our partners,” said Nestle India chairman & MD Suresh Narayanan. “I feel incredibly privileged to lead a team who faced with serious challenges, persevered regardless, to deliver double digit growth over a strong comparable in 2020. It is tribute to the commitment of the team to serve consumers as best as we could during the pandemic.”

    At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) in Q1 grew by 17.1 per cent to Rs 929.8 crore and margin expanded 190 bps to 25.8 percent compared to the year-ago period.

  • Puneet Das elevated to Tata packaged beverages president India & south Asia

    Puneet Das elevated to Tata packaged beverages president India & south Asia

    NEW DELHI: Tata Consumer Products (TCP) has elevated Puneet Das as president – packaged beverages, India and south Asia. Das, who has been associated with Tata Consumer Products since 2017, was earlier senior vice president- marketing for the India beverages business.

    Das takes over from Sushant Dash, who was recently named chief executive officer for coffee chain Starbucks in India. 

    Before joining Tata Consumer Products, Das held senior marketing roles in companies such as Marico, PepsiCo, GSK Consumer. He comes with about 20 years of experience in the FMCG sector, having worked in India, Africa and other international markets.

    In a recent statement, TCP stated that Das has played a crucial role in formulating marketing strategies for Tata Tea and Tata Coffee Grands. 

    "We are happy to elevate Puneet Das as president for packaged beverages. This is in line with our aspiration to recognise and groom internal talent. We have an exciting time ahead for our packaged beverages business with focus on scaling up our distribution and reach, building on product innovation while strengthening the core portfolio. Puneet’s appointment comes at a time when the organisation is going through its transformation journey and we are confident that his experience and leadership will help us accelerate the business and achieve new heights," said Tata Consumer Products managing director & CEO Sunil D'Souza. 

  • Print faced setback in advertising & circulation in 2020, could re-grow this year

    Print faced setback in advertising & circulation in 2020, could re-grow this year

    NEW DELHI: Who could have known that a microscopic organism would disrupt the global economy and adversely impact businesses across the board in a single year – but the Coronavirus did. And the media industry was no exception to its rampage. In 2020, print media de-grew 36 per cent, and this unexpected plummet came at a time when the industry has been ceding ground to digital media. 

    Advertising and circulation impacted

    A recent FICCI-EY study report indicates that advertising revenues for newspapers in 2021 fell by 41 per cent in 2020. Subscription revenues for print media also plummeted by 24 per cent last year. Compared to regional newspapers, it was English newspapers that witnessed a more pronounced decline. 

    Advertising revenues of English news publications fell by 52 per cent in 2020, while revenues of Hindi and other regional language contents dropped by 35 per cent. 

    As the world limps back to normalcy, industry experts believe that advertising and subscription revenues could increase in 2021. According to the study report, advertising revenues will grow by 25 percent in 2021, thus elevating the revenue share to Rs 152.1 billion. The subscription revenues are also showing signs of revival, and it is expected to grow 25 per cent in 2021 and exceed 2019 levels by 2023. Meanwhile, magazine revenues that were halved in 2020 may not recover until 2023. 

    Print companies adopting measures to stay financially afloat

    To combat the ongoing crisis, print media companies have implemented significant cost reduction measures to achieve between 25 per cent and 40 per cent efficiencies, and this trend is expected to continue in the upcoming years as well. 

    Some of the noted cost-cutting measures adopted by print media include shutting down unprofitable editions, downsizing the employee base, curtailing the rental of leased properties, and giving work from home options to certain employees. Some publications pulled the plug on low-cost subscription packages, while a few others implemented salary reductions and abeyances. 

    Even though most of these measures are reversible when the business environment picks up again, industry experts believe that some of these reductions may be here to stay and could eventually enable print companies to stay financially afloat. 

    Print ad revenues rely on FMCG, auto, and education

    Further, the report suggests that the top five categories that contributed to print ad revenue in 2020 were FMCG, auto, education, retail and real estate, and home improvement. These five categories contributed 59 per cent of ad revenues, up from 50 per cent in 2019. 

    Almost all categories showed de-growth as advertisers fear that print media circulation has not returned back to pre-Covid levels. 

    Due to the Coronavirus outbreak, digital hands of print media gained massive popularity in 2020. Online news viewership has surged to 454 million unique visitors in 2020, much greater than 394 million unique visitors in 2019. Many print companies have now started to give importance to digital news publications as well, and they are focusing on products like websites, apps, and e-papers. Amid these positive signs, monetisation remained an issue with most print companies, as they generated only five percent of their revenues from their digital handles. 

    Contribution by ad-volumes

    Amid the Covid pandemic, Hindi has continued as the largest contributor to ad volumes with the largest reach of any language in India, growing its share by four per cent. In 2019, the ad volume generated by Hindi newspapers was 37 per cent, and it grew to 41 per cent in 2020. English language publications had slight degrowth in 2020 and have lost two per cent volume share since 2018. 

  • Real estate emerges biggest spender on OOH advertising in 2020

    Real estate emerges biggest spender on OOH advertising in 2020

    NEW DELHI: 2020 was a very crucial year for humanity, as the entire world went into sleep mode due to the Covid2019 outbreak. From wearing masks, social distancing, the deadly virus changed the way people have been living for centuries. The pandemic also brought about changes in the out-of-home (OOH) ad segment, as people limited their lives inside their homes. 

    OOH segment de-grew 60 per cent in 2020

    As a majority of people were confined to their homes for the better part of last year, the OOH sector de-grew by 60 per cent in India. Revenue generated by the category was 15.6 billion in 2020, a steep drop I from Rs 39.1 billion in 2019. According to a recent study conducted by FICCI and EY, OOH advertising  will Blake a comeback in 2021, with the revenue rising to Rs 21.6 billion. By the end of 2023, the sector’s revenue will be Rs 31.8 billion, though still less than the 2019 earnings. 

    Traditional OOH comprised 60 per cent of revenues and remained the largest segment, while transit media comprised 35 per cent of the sector. The OOH spends on transit media was 39 per cent in 2019, and it witnessed a drastic fall as rail, metro, and air all witnessed large drops due to the lockdown and restrictions on travel. 

    Findings of the study showed that transit media comprised Rs 5.5 billion in 2020, and it is expected to grow to Rs 10.8 billion by 2023. This will be mainly due to 452 kilometers of metro line projects across the top seven cities that are currently under construction. Moreover, the government also plans to build or widen 60,000 km of roads by 2025. 

    As the vaccine rollout is progressing steadily, the sector is currently on the road to recovery. 

    Real estate dominates the ad sector in OOH

    Real estate and construction, FMCG, financial services, auto, and media are the top five categories that contributed to OOH spends in 2020. With 21 per cent spends, real estate dominated the OOH ad sector. Primarily, the factors that drove the real estate sector in 2020 were revision in home loan interest rates and conducive government policies. 

    However, OOH spends from hospitals, restaurants, educational sector, organised retail, and telecom witnessed a sharp fall in 2020. Moreover, from April to June 2020, most of the OOH sites were dominated by government ads about the pandemic. During this time, several companies refrained from spending on OOH, as Covid cases in the country were on the rise.