The pandemic has brought unprecedented changes across the world. People are thinking differently, acting differently, and buying differently. Consequently, consumer product companies have had to reimagine their businesses.
The Indian economy is indicating signs of revival. India's GDP (gross domestic product) grew by 8.4% in the second quarter of FY22. The size of the GDP in the second quarter of FY22 expanded to a level more than what it was in the same period in the pre-Covid year FY20. Continued government spending along with benign interest rates have aided the revival, despite inflationary pressures. While concerns around new variants of the virus remain, 2022 promises accelerated economic recovery, on the back of a rising vaccination rate.There are some underlying trends that I believe will resonate in 2022 and beyond:
1) Premiumisation, a big opportunity
Approximately 100 million Indian households will be in the upper-mid and high-income groups by 2024. With rising affluence and growing aspirations not just in big cities, but smaller towns too, we expect growing consumer demand for premium products.
2) Spotlight on millennials
India has emerged as the largest and youngest global economy with a median age of 28 (US is 38 years, China is 37 years), and will add 100 million ‘new legal drinking age consumers’ in the next five years. This cohort is willing to experiment and seeks quality and authentic brands that can provide a differentiated and enhanced experience -- providing an opportunity for brands to innovate. In the alco-bev segment, we are already seeing this trend play out with consumers experimenting with craft whiskey, beers and RTDs - anchored on differentiated and lighter, smoother (better) ‘liquid’ propositions.
3) Homes, the new frontier for consumption and innovationHomes have become the heart of everything we do. 2022 will see the emergence of a new, adaptable home. With growing socialising and experimentation at home, especially in the beverage alcohol segment, we are increasingly seeing repertoire behaviour - different choices being made as occasions evolve, from ‘special moments’ to ‘sharing moments’. Moreover, with tech enablement and growing omni-channel retail, homes will become the heart of experimentation, self-discovery, and indulgence.
4) Women consumers on the rise
5) Organisational diversity – a new priority
The pandemic has strengthened the discourse on diversity, on the back of global events, policy initiatives and proliferation of social media. It is heartening to see companies strengthening their commitments towards diversity and inclusion efforts. There is increasing acceptance in corporate India that having a diverse workforce can lead to more productivity and profits. We will continue to see more companies embracing diversity.
6) Doing well by doing goodSustainability opens up new growth opportunities, improves operational efficiencies and also strengthens the internal and external relationships of an organisation. Not just investors, even customers, employees and job seekers are subjecting companies to the lens of sustainability. The dynamic nature of developments with expectations from regulators and the market is changing rapidly. 2022 will be an inflection point for sustainability and we will see cross-sectoral and broad-based adoption of sustainability in corporate India.