Parle remains India's top FMCG brand because it has worked very strongly on penetration and frequency, says K Ramakrishnan of Kantar

Brands can be ranked on many things like revenue, relatability and profitability, Kantar India uses a product of these three to come up with Most Chosen FMCG Brands based on Consumer Reach Points, said K Ramakrishnan, Managing Director- South Asia, Worldpanel Division at Kantar.

On Thursday, Kantar India released the 10^th anniversary edition of its annual Brand Footprint report, as per which Parle has topped the list of Most Chosen FMCG Brands based on Consumer Reach Points for a record 10 years in a row. Parle, with a CRP score of 6531 million, is at the top followed by Amul, Britannia, Clinic Plus and Tata Consumer Products.

K Ramakrishnan

“Brands can be ranked on many things like revenue, relatability and profitability and each one might show a different result. The metrics that we use are a product of these three things and in this context, we see Parle is leading because they have worked very strongly on the penetration level as well as their frequency,” Ramakrishnan said.

As per Kantar, CRPs are calculated by multiplying the number of households in the country with the percentage of population buying from a brand, this is then further multiplied by the number of their interaction with the brand, across categories, in a year.

According to the report, overall consumer reach points (CRPs) have increased from 89 billion to 98 billion with the growth rate going up from 3% in 2020 to 9% in 2021. The report states that the growth in CRPs is driven by Food, Health and Beauty and Beverages categories.

Moreover, as the shadow of lockdown fades purchase frequency has improved leading to CRP growth. Bigger brands also continue to grow.

However, the ongoing inflation phase is expected to grow the CRPs even further. Ramakrishnan noted that people tend to downgrade in terms of pack sizes during inflation, and they buy smaller packs more frequently, which contributes to an increase in CRPs.

The report further said that the bigger the brand, faster the growth.

As per it, big brands with over 61% penetration levels grew the fastest with over 11.6% growth in 2021. Meanwhile, only 66% small brands (with penetration between 1-20%) were able to register a growth in their CRPs in the past year.

In terms of CRP growth, some snacking brands grew by over 30%, with Balaji leading the race at 49%, followed by Kurkure at 45% and Bingo at 37%. Among the beverage players, Nescafe registered a 19% CRP growth followed by Boost at 15%.

Ramakrishnan said, “Each category has a different set of competitive landscapes and a different sort of penetration. The brands have to look at these categories and understand what is happening and then look at the relative range from one point that they should pick up.”

However, the consumer has shown an increase in frequency, markets opening up in relation to 2020-21, the frequency of visits to the market, and as a result, the frequency of purchase has improved leading to a significant CRP growth in 2021, noted Ramakrishnan.

Also, a remarkable growth in the beverages has been seen in 2021, it sharply increased from -3% to 18% in 2021 which proves that they must have adopted a good strategy for this.

Noting the increase in beverages in 2021, Ramakrishnan said, “When the pandemic first struck in the year 2020, we had a very severe lockdown that occurred during the summer, which happens to be the peak season for carbonated soft drinks, which make up the majority of beverages. As a result, they lost the entire summer season in 2020, whereas in 2021, they were slightly better prepared and the lockdown was not as severe as in 2020. So, to that extent, there was some mobility and a significant portion of consumption occurred within homes.”

“The golden rule of penetration is, the higher the penetration is, your frequency will automatically follow. It is always recommended that one needs to work on penetration. Most of the brands have an inherent problem of having lower penetration. So, it takes a long time before they can improve their penetration. Afterwards, the frequency response is given to us for small brands to look at penetration as a metric that they will chase and then frequently will fall. That's the issue that small brands have to face,” explained Ramakrishnan.

Info@BestMediaInfo.com