Will the pandemic spin the wheel back in favour of regional players? To answer that, Ramakrishnan points to the reasons behind the growth of the large brands. Big brands’ volumes have swelled at the expense of regional brands and in rural markets, which indicates that the gains may be long lasting. They learnt from the lean local approach of regional
brands and adapted to suit the marketplace needs, Ramakrishnan adds.
The report lists three factors responsible for the success of big brands.
Value packs, better channel presence and greater variety in the portfolio. Value packs play a big role in penetration and here, big brands
score far better, across categories such as tea, floor cleaners, salty snacks and such others, than regional players. They also dominate modern trade and in the past couple of years have flooded shop shelves with different pack sizes and product extensions. This has edged out the regional players, who have also been unable to leverage the digital channels well enough to blunt the disadvantage in the physical world.
Finally big brands
have also extended their scope to meet the needs of every customer. For instance, Aashirvaad Atta
(ITC) has multiple variants of the core product (multi-grain, five-grain, organic and so on) while its regional competitors have just one or two, if any.
Another example is Lizol that comes in eight fragrances as against its biggest regional competitor (Sunny Home Care) that has two. It also has cleaners for bathrooms, floors, and cement surfaces while regional brands have a catch-all cleaning agent. Meeting multiple needs and an articulation of the benefits have helped big brands firm up the foothold in rural and urban markets.
The pandemic will not change that and the shift to regional labels may well be on account of a broken supply chain, according to Ramakrishnan. But, will the vocal for local campaign hamper the reach of multinational brands? In consumer goods, it is often difficult to draw the line between local and foreign brands, Ramakrishnan says. Old brands with long standing relationships in the category are often seen as local even if they are not, he says. Size may well play in their favour, as will age.