Deepak's Musings #137: 🇮🇳 The state of the Indian consumer market

What are the largest CPG companies in India saying about the state of the Indian consumer?

Author

Deepak Shahdadpuri
February 19, 2024

All things consumer & insurgent brands. What I am currently reading, thinking about, and reflecting upon. You can follow me on Twitter at @dishahdadpuri or follow DSG Consumer Partners at @dsgcp.

p.s. You can click on any of the summary links to read the full article from its source.

🇮🇳 The state of the Indian consumer market

There is so much conflicting data and news on the state of the Indian consumer market. Here is a snapshot from last week.

Consumer sentiments improve, household inflation expectations moderate: RBI

According to the survey conducted in January, CSI improved further to 95.1 in January from 92.2 in November 2023

FMCG market growth rate will improve next fiscal, says Godrej Consumer Products MD Sudhir Sitapati

Godrej Consumer Products: The FMCG market growth rate is expected to improve next fiscal. Godrej is evaluating options to expand its presence in the hair care market. Demand for premium products is high.

Mainstream demand tepid despite premiumisation: Nestle CMD

NielsenIQ forecasts a slowdown in the FMCG sector's value growth. Nestle India reports a 4.4% YoY rise in net profit for the December quarter, driven by pricing and strong momentum in ecommerce and out-of-home channels.

Unilever to 'defend its position' amid attack on price points by local companies

"If you look at India, the good thing about quarter four is with the price pressure that is there in India, one of the impacts of deflationary pressure in some categories could be with increased competition and so forth. We have seen a volume growth, so the minus 2% on pricing was balanced by a 2% volume growth. I think that's a positive for India," Unilever's chief executive officer Hein Schumacher said.

🇮🇳 Global consumer product companies are betting big on the India growth story

Over the weekend, I read this story confirming that global CPG companies like Coca-Cola, Mondelez, and Nestle are investing heavily in India's growth story.

Global consumer product makers to step up investments in India

🇮🇳 India’s consumption divide

More news confirming what we have been reading over the last few weeks as companies announced their most recent results. Premium categories such as international travel, premium alcohol, premium beauty and personal care, and premium home improvement have performed relatively better than mass categories based on recent reports.

Mass market lags but premium end soars

It's the great consumption divide in India: discretionary spending remains subdued in the mass markets, but the premium end seems to be faring well

🐶 Supertails closes new round to fund expansion

DSGCP portfolio company Supertails welcomes RPSG Capital to the cap table. Founded in 2021 by Varun Sadana, Aman Tekriwal, and Vineet Khanna, the company offers a wide range of pet supplies such as toys, accessories and pet food, as well as online veterinary consultations, pet training services and pet pharmacies across India.

Listen to Aman speaking to CNBC on Supertails’ focus on customer love.

Petcare startup Supertails raises $15 million led by RPSG Capital Ventures

Bengaluru-based startup Supertails will use the funds for offline expansion, scaling up products, acquiring new customers and expanding its healthcare service, Supertails Pharmacy. The company plans to launch trial stores in a mix of metropolitan and tier-I cities like Bengaluru, Mysore or Ahmedabad.

🦈 Koparo on Shark Tank India

Watch Simran Khara, founder of DSGCP portfolio company Koparo, battle the sharks. Did Simran seal a deal?

Simran Khara's Sustainable Home Care Brand Koparo Bags Rs 5.2

Digital-first, sustainable home care brand Koparo has raised Rs 5.2 crore from 4P Capital Partners and an additional Rs 70 lakh from Shark Tank India, with Aman Gupta and Vineeta Singh investing.

🧴 Bain & Company's Consumer Products Report 2024

Last week Bain & Company published their 2024 Consumer Products Report where they argue that CPG brands, big and small, need to focus on volume growth versus price increases going forward. Some very interesting data. Bain’s POV is that winners will be brands having a positive impact on all stakeholders—not just shareholders, but also consumers, customers, employees, and the planet. Download the report here.

Consumer Products Report 2024: Resetting the Growth Agenda

With no room for price increases, CPGs must fundamentally reshape their businesses to reignite profitable, volume-driven growth.

What is social wellness?

Is this the start of a new long-term trend? Virgin Active’s Fitness Trends Survey 2024 found that members prioritised recreational spaces (73%), wellness programmes (71%) and community-focused social bonding activities (60%). Believing the traditional gym is “no longer relevant”, Julien Bera, Virgin Active’s Country Director in Southeast Asia, sees the brand’s future spread equally across wellness, recovery and social programming.

Virgin Active Bets on Social Wellness in Singapore

Social wellness is moving mainstream.

Select funding & deal news

Lots of interest in mushroom-based functional beverages and see what DSGCP’s LPs are investing in.

DSGCP LP L’Oreal BOLD invests in Chinese fragrance brand To Summer

L’Oreal has announced that its venture capital fund BOLD (Business Opportunities for L’Oreal Development) has closed a minority investment in Chinese luxury fragrance brand, To Summer. Financial terms of the deal were not disclosed.

DSGCP LP Verlinvest backs Cible Skin

Verlinvest partners with French luxury skincare brand, Cible Skin, to support its unique immuno-cosmetic product development and continued global expansion

Odyssey Raises $6M for Mushroom Energy

Functional beats better-for-you.

Spacegoods Scores £2.5M for Functional Mushroom Blends

Going beyond the ‘shroom boom.

InvestBev Backs JuneShine with Seven-Figure Investment

InvestBev, the nation's largest private equity firm dedicated to the adult beverage industry, is thrilled to announce a seven-figure...

Coca-Cola Is Among Suitors for Healthy Soda Brand Poppi

Coca-Cola Co. is pursuing an acquisition of healthy soda brand Poppi, according to people with knowledge of the matter.

Online seafood firm Captain Fresh raises $25 million from BII, Nekkanti

Captain Fresh Funding: Captain Fresh raises $25M in funding round led by BII and Nekkanti Seafoods Group. Utham Gowda to hold 19% stake. Matrix Partners, Ankur Capital, Prosus, and Tiger Global also invest. Acquisition of Senecrus.

Asahi invests in US non-alc retailer The Zero Proof

Asahi Group Holdings has taken part in a Series A funding round at US non-alcoholic drinks retailer The Zero Proof.

Encore Closes Fund IV

Another CPG-focused fund dedicated to insurgent brands. We need more.

NPD Snapshots

Snoop Dogg, Dr. Dre bring hit ‘Gin & Juice’ to the beverage space

Thirty years after the two unleashed the namesake song to the public, the rappers have partnered on a RTD cocktail offering.

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