FMCG Brands Are Finding It Hard To Sustain Launches Amid Rising Competition: Kantar
'Launching new products is becoming more difficult than ever,' K Ramakrishnan, managing director at Kantar Worldpanel, told NDTV Profit.
Consumer goods companies are increasingly facing the daunting task of sustaining new product launches, especially in the aftermath of the Covid-19 pandemic, a private study showed.
According to a study by research firm Kantar, only 6% of stock-keeping units achieved a penetration of 1% in the launch year in 2019, or pre-Covid, but even fewer brands have sustained success beyond their initial introduction in 2022.
"Launching new products is becoming more difficult than ever," K Ramakrishnan, managing director at Kantar Worldpanel, told NDTV Profit.
The key factors contributing to this trend are the multiplicity of consumer offerings and the higher acceptance of new players. "There is a limit to how much consumers can expand their consumption basket, so they inherently trade off one item for another," he said.
The share of new brands in top launches increased to 39% in 2022 from 22% in 2019. "If a brand is meaningfully different, it stands a fair chance of capturing a significant share of new consumers," Ramakrishnan said.
The Kantar study identified the competitive landscape within the fast-moving consumer goods sector as another obstacle. Innovation is very high among local companies, and the national brands have followed with a me-too product, vying for market share.
For instance, about 70% of the launches in 2018–19 in the detergent category were by local players focusing on liquid detergents. National players followed suit in 2020–21 by expanding into machine-specific liquid variants. Similarly, local dominance continued in the insecticide market, where citronella sticks accounted for 9 out of the top 10 launches in 2021–22. In response, Godrej Consumer introduced an anti-mosquito agarbatti in 2024 to consolidate this segment.
In 2021–22, eight of the top 10 launches in the toilet cleaner category were introduced by local players. Kantar predicts this trend could motivate national players to innovate and grow the category even further.
Interestingly, the study pointed out that innovation with a "healthy" tag is becoming harder to sustain. In 2020–21, 25% of launches in the noodles and biscuits categories were conventionally healthy; however, both the penetration and repeat rates were lower compared to pre-Covid times. This is despite conscious consumers seeking out healthier food alternatives.
