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<\/p>\nConsumer-focused companies have been left with few options but to increase the prices of their products as input costs mount because of various factors, including supply chain disruptions.<\/p>\n
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This has been affecting monthly household budgets.<\/p>\n
Prices of scores of items — from spices to soaps to rice — have increased in the past year.<\/p>\n
Consumer-focused companies have come up with a number of solutions to address this problem; they include a reduction in pack sizes, the introduction of bridge packs, and passing on the price increase to the consumer on bigger packs.<\/p>\n
There has been a double-digit year-on-year increase in the prices of most spices, with branded coriander costing 16.9 per cent more in June this year than a year ago.<\/p>\n
Garam masala, too, is costlier by 15.6 per cent, according to data provided by Bizom, a retail intelligence platform.<\/p>\n
Essential food items, too, witnessed their prices going up in the mid-single digits in the past year.<\/p>\n
Branded milk is costlier by 5.4 per cent and bread by 12.3 per cent.<\/p>\n
Earlier this year, players like Amul and ITC had increased the prices of milk by Rs 2 per litre.<\/p>\n
According to an ICICI Securities note, wholesale milk prices have increased 6 per cent YoY across India in July this year.<\/p>\n
The brokerage also said the prices of maize, wheat, and soybean are rising, as well, thus leading to higher cattle feed prices.<\/p>\n
Hence, it expects dairy farmers to pass on any further inflation in input costs via higher milk prices.<\/p>\n
In the essential non-foods space, branded bathing soaps are costlier by 15 per cent YoY.<\/p>\n
FMCG companies, such as Hindustan Unilever and Godrej Consumer Products, have resorted to increasing the prices of soaps.<\/p>\n
The prices of branded detergent, too, are up 9.7 per cent in the past year; floor cleaners are costlier by 12.3 per cent, according to Bizom’s data.<\/p>\n
In the indulgence foods segment, the prices of butter, ghee, and basmati rice are on the rise, too.<\/p>\n
The sharpest spike is seen in the price of branded basmati rice, which now costs 32 per cent more than a year ago.<\/p>\n
Butter is costlier by 7.7 per cent, while ghee is 5.3 per cent more expensive.<\/p>\n
“Basmati rice is also a key export from India.<\/p>\n
“This means that there have been better realisations for companies in this space,” Akshay D’Souza, chief of growth and insight at Bizom.<\/p>\n
“For other indulgent foods, the price increases are slightly higher than mid-single digits,” he said.<\/p>\n
The prices of personal care products have also witnessed an increase over the past year.<\/p>\n
The price of shampoo was 8.3 per cent more in June this year than last year, while hair colour became costlier by 7.1 per cent, according to Bizom’s data.<\/p>\n
But D’Souza expects an easing of inflationary pressure in the coming months.<\/p>\n
“With fuel and cooking oil prices trending lower in India, we see that the pressure on other product prices will ease a little,” he said.<\/p>\n
“We can expect to see an increased focus on improving consumption rather than focus solely on price-led growth, as has been the key execution strategy for brands over the last two quarters.”<\/p>\n
After announcing its December quarter results, HUL said in its presentation citing Nielsen’s data that volumes started contracting in rural areas from August last year.<\/p>\n