With good monsoon and growth in rural demand, media spends to pick up in H2 2023: Rajesh Ramakrishnan

Speaking at IAA Retrospect and Prospects 2023, Rajesh Ramakrishnan, MD, Perfetti Van Melle emphasised the importance of sustainability in the FMCG industry. He also suggested multiple learnings for business transformation from photography, a field he is passionate about

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With good monsoon and growth in rural demand, media spends to pick up in H2 2023: Rajesh Ramakrishnan

Rajesh Ramakrishnan

The India chapter of the International Advertisers Association (IAA) held its annual ‘Retrospect and Prospect’ event in Delhi. Rajesh Ramakrishnan, MD, Perfetti Van Melle, was the speaker who shared the nuances of the confectionary business along with its challenges. 

“When we launched Centre Fresh, it was priced at Rs 1 and even today it is being sold at the same price. But the price of sugar didn't remain the same if we compare it to the earlier times. So, we have been just absorbing inflation into our cost concept and that is not sustainable. Also, reducing the size can only happen to an extent,” Ramakrishnan said. 

He also went on to say that it is about looking at all facets of the product, packaging and production and seeing where are the opportunities to optimise. 

“I cannot change my product's price from Rs 1 to Rs 1.20. I’ll have to jump straight to Rs 2 which is a 100% jump in the price. However, this increase in price may discourage young customers from buying the product as there are other candies available in the market at Rs 1. This puts us in a challenging position and requires us to explore innovative cost management strategies to come up with truly creative solutions,” he added. 

Speaking about the FMCG and confectionery sector, Ramakrishnan stated, “There is a general level of bullishness, the challenge is in ensuring profitable growth and because of this we are also seeing some pullback on media spends. Hopefully, if the monsoon is good and the rural demand kicks in well, then that should pick up going forward. That's the challenge many CEOs are talking about.”

He went on to add that the other challenge that brands today face is that of sustainability, albeit plastic waste management or green energy. This is another key watch out for companies because these are gaining a lot more traction.

“From a consumer point of view, the buoyancy in demand is there. So, the consumers are willing to spend, however, post-Covid-19 consumers have gravitated towards going to the brands that they trust and offer superior value,” Ramakrishnan stated. 

Speaking about Perfetti Van Melle India’s primary consumers, Ramakrishnan said, “Our brand portfolio consists of seven distinct brands - including Centre Fresh, Centre Fruit, Mentos, Alpenliebe and Chupa Chups - catering to diverse age groups. The range of our products covers the entire demographic spectrum from seven-year-old children to 80-year-old individuals.”

Centre Fruit and Alpenliebe lollipops are primarily targeted towards children, while Chupa Chups appeals to teenagers. Centre Fresh, on the other hand, is geared towards young adults, while Happydent is a functional product designed for adults.

Ramakrishnan also highlighted that for Perfetti Van Melle India, rural and urban markets are equally important. 

“The significance of rural markets cannot be overstated, as they account for 35% of our total share, while the urban market comprises 65%. Contrary to popular belief, rural consumers are smarter and technologically aware, with significant purchasing power,” he stated. 

“Therefore, it is essential to treat them as equals and offer them appropriate product and portfolio options to encourage them to buy,” he added. 

Ramakrishnan also shared the pride the company derives from innovation. “Centre Fruit and Centre Fresh were the first liquid-filled gums introduced in the country, while Alpenliebe was the pioneer of both deposited and smooth candies. Additionally, Chupa Chups was the first  lollipop that contains chewing gum inside.”

An avid photographer, Ramakrishnan elaborated that the concept of ‘composition’ in photography also applies to business strategy as they are about making choices on which areas the focus should be, in terms of what one wants to start, continue to build on and also stop doing.

“Because resources, time and energy are all finite, one can’t keep doing new things without stopping some of the old things. Therefore, one needs to be very clear about making the choices,” he said.

In case of a crisis, he shared that while it is important to ensure there isn’t a panic situation, there should be a certain sense of urgency and an attempt to inspire people by making it visible and relatable.

Citing an example, he said that when Perfetti went through the change in the management process, the employees cumulatively shared the viewpoint that the company was like a Ferrari that was stuck in 1st gear as they had ‘an apparently great run from 1994 to 2012 but flat revenues between 2013 and 2017’, followed by low profitability, and therefore the brand launched a project called ‘Sparkle’ which was about reigniting the spark that was already there but had become a little ‘jaded’.

“It’s very important to help people visualise the change that you want to bring and for us, it was all about how do we get the growth back, the profitability, and determine the enablers that we wanted to invest on- technology, organisational structures and capabilities,” he said.

Ramakrishnan also shared that the other concept from photography which can be implemented in businesses is that of having multiple perspectives for one subject, which means diversity- not just in terms of gender but also from various regions and backgrounds, amongst other things, as that’s where the richness of thinking comes and the quality of decision making improves.

Additionally, he also pointed out that one needs to go wide before going deep. “We have a tendency to jump right into the problem and then say let's solve it, but if you go a little wider before going deep, you’ll maybe find other things to consider before actually trying to solve the problem,” he said.

With this, he also went on to suggest that marketers should not just stick to their respective industries and be open to taking learnings from other industries as well that can be applicable to their field.

“Very often, we are either in the past or we’re in the future and what photography has taught me is how can I be mindful of this because if not this, one cannot see what’s happening around them. Therefore, it is very important to be present in the moment and ensure that there are the right systems and processes to act as enablers and not as derailers,” he added. 

Ramakrishnan also shared the view that when it comes to transformation, one of the most important things is influencing without being authoritative - which is why it is crucial for a CTO to win the trust and respect of the stakeholders and ensure they see the value that the plan brings to them.

Another lesson that one can take from photography in business, in his opinion, is to always have a plan B if one is unsure that things may not go the way one had planned or desired.

“Earlier on, we called it situational adaptability, but to me, it today is situational agility, which is adaptability too - but with an element of speed.”

FMCG IAA photography Rajesh Ramakrishnan confectionary International Advertisers Association Retrospect and Prospects Perfetti Van Melle India Centre Fresh Centre Fruit Alpenliebe change management business transformation