FMCG makers dial up price hikes
Leading FMCG companies are preparing for another round of calibrated price increases in the September quarter as higher commodity costs and geopolitical uncertainties put pressure
Leading FMCG companies are preparing for another round of calibrated price increases in the September quarter as higher commodity costs and geopolitical uncertainties put pressure on margins, even as they remain optimistic about consumer demand.The sector, which raised prices by an average 2-5% in the June quarter, is now turning to a mix of selective price increases and shrinkflation — reducing the quantity in packs without proportionately lowering the price — to offset higher input costs.Also Read: FMCG price hikes could rewrite India’s inflation story: ReportCompanies are also keeping a close watch on crude oil prices, the monsoon and the potential impact of El Nino, while banking on resilient consumption, premiumisation and improving revenue growth to support their performance.Britannia Industries expects to take another 1.5-2% pricing action in the second quarter, primarily through shrinkflation in its Rs 5 and Rs 10 biscuit packs, as sugar and palm oil prices remain elevated.The bakery major said its pricing-led growth in the first quarter came largely from shrinkflation and indicated that further action could follow in the current quarter."Going ahead in the quarter, you will see something more coming in. If the overall impact was 1 per cent, you would probably see maybe another 1.5-2 per cent coming in," MD and CEO Rakshit Hargave said during the company's earnings call.Despite the pricing actions, Hargave said the demand environment remained strong.
Britannia expects to preserve its FY27 EBITDA margin at least at FY26 levels if input costs remain elevated.Godrej Consumer Products Ltd, which raised prices by around 5% in the June quarter, is also open to another increase in the current quarter, although it is waiting for greater clarity on commodity costs.Also Read: FMCG, Retail, Food industry must improve consumer grievance redressal system: Consumer Affairs SecyCEO Sudhir Sitapati said the company had refrained from taking larger price increases because of volatility in crude oil prices. "No... We may get a similar kind of price increase in Q2 as well..." he said when asked whether GCPL had taken further price increases towards the end of the quarter.Sitapati said several of the company's input costs are linked to crude oil and typically reflect changes in crude prices with a lag of three to four weeks. With Brent crude at around $80-85 a barrel, GCPL believes its current pricing is broadly adequate and does not expect a significant additional increase for now."With revenue growth tracking ahead of our original expectations and input costs beginning to ease, we enter the remainder of FY 2027 with increased confidence. We remain firmly on track to deliver our guidance for the full year with the confidence to exceed the same in select areas," he said.Dabur India, meanwhile, expects elevated input costs to persist in the near term and plans calibrated price increases alongside productivity and cost-efficiency measures to protect margins.The company remains confident of delivering double-digit revenue growth in FY27, supported by its brands, new product pipeline and execution.Dabur India Global CEO Mohit Malhotra said inflation was already shifting the composition of growth towards pricing and value rather than volumes.The growth "will be more driven by revenue and price.
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