Power of Rs 10: Firms bet big on small packs

MUMBAI: This summer, consumer goods companies are turning up the heat on Rs 10 price packs-brands are pushing new products and variants within the price range into the market and also sharpening focus on distribution and marketing of smaller packs. Rasna for instance, has launched a fruit drink concentrate in Rs 10 sachet packs which can be used to make three glasses of beverage. The company's chairman Piruz Khambatta told TOI it will allow the lower middle-class an affordable alternative to other brands selling similar products at higher prices. Mother Dairy has widened its bouquet of Rs 10 packs by adding mango lassi and pudina chaach to the mix while PepsiCo has introduced a no-sugar beverage pack in Hyderabad at that price.

While Rs 10 packs have always been key to companies' pricing strategy for India as it enables them to get more consumers within their fold in the value conscious market, the renewed bets on smaller packs also comes at a time when hit by high inflation over the past few quarters, middle class households have curtailed discretionary spending. Given that summers this time set in early in many parts of the country and projections indicating a scorching season ahead, companies want to tap into this opportunity to spur demand and the ploy here is pricing.

"In terms of consumption, the environment remains mixed. Companies are trying to push smaller packs and drive more frequency. Also, after the launch of Campa, Rs 10 packs will somewhat make sure that companies remain competitive," said Karan Taurani, senior vice-president at Elara Capital.

Dabur said that its portfolio of juices offered at Rs 10 will be a key distribution and market share driver for the company this summer. "For beverages, the Rs 10 price point hits the sweet spot of affordability for Indian consumers, making it the preferred out-of-home consumption price point. This summer too, we will focus on offering more value for money to reduce the relative price differential with aerated beverages," said Monisha Prasher, marketing head, beverages at Dabur India. Mother Dairy has already seen a 30%-40% surge in demand for beverages, ice-creams and curd over last year, helped by an early onset of summer, said managing director Manish Bandlish. Rival Amul has stepped up competition in the market by launching Tru dairy-based fruit drink at Rs 10 for 150 ml.

Coca-Cola's global CFO John Murphy who was on a visit to India earlier this year had said that the Rs 10 price point is very important in India and the company will focus on it. "It's very important to understand the magic price points in a market like India and the Indian consumer is pretty elastic in what price point they are willing to buy or not," Murphy had said. Reliance's move to push Campa Cola in the market at a cheaper price of Rs 10 has nudged all brands to revisit their strategies.