Innovation will be a key driver to reignite growth in the fast-moving consumer goods (FMCG) sector, which has seen a slowdown in the last three years, according to industry experts.
"One of the drivers of growth for the industry in the next 5 to 10 years is innovation. We, as a sector, haven't innovated enough. The biggest innovation has come from people outside the traditional FMCG marketers," said Marico Managing Director and Chief Executive Officer Saugata Gupta.
He was speaking at the CII FMCG summit here.
Citing Patanjali's disruption in the FMCG space, he said, "Patanjali is a wakeup call for industry. This disruption will shake us from some kind of complacency and perhaps the realisation for any industry or company that what got us here will not get us to next level." The growth of the FMCG industry, which was around 20 percent, has come down to 7-8 percent over the last three years. According to market research firm Nielsen, the per capita FMCG consumption in India is USD 29, while its share of GDP from FMCG standpoint is 2 percent.
"In the last three years where the industry has seen recessionary growth trends, it coincided with a period where we had deflationary trend in the market.
"At this time, innovation should have been the key.
But the innovation rates have come down from 16,000 launches to 8,000 launches per annum," said Godrej Consumer Products Business Head India and SAARC Sunil Kataria.
Echoing similar sentiment, Nestle India Chairman and Managing Director Suresh Narayanan said, "The level of innovation has come down. There is enormous opportunity in terms of innovation. Some of the companies were once pioneers of innovation buy have become laggards now. Somewhere along the line, something seems to have got morphed." Companies need to identify the trends and innovate products around them, according to Tata Global Beverages Chairman Harish Bhat.
"In any generation, there are 3-4 broad trends and if we align to those trends, we can offer the consumer products and services based on these trends. We need to innovate around these trends and provide products and services," he said.
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