Disha's Column: Choclates, FMCG, Flipkart

When life is sweet

Mintel says India's chocolate market was estimated at Rs 17,200 cr in 2019. In between 2019-2023 it is estimated to grow at a CAGR of 10%. And so the numbers are adding up. This means, more and more companies getting into packaged food products and competing with the likes of ITC and Mondelez. For example, Haldiram's has launched an in-house incubation project to develop chocolates. This means single serve bars which will be priced between Rs 150 to Rs 399 and large packs for Rs 2000. Meanwhile Mondelez India is not staying quiet. The chocolate maker has promised to invest Rs 4,000 crore over four years to boost its manufacturing capacity and build more warehouses and cold-chain facilities.

When life is sweet, the P&L is sweeter for packaging converters.

Rural tailwinds

FMCG majors are worried that the rural market is lagging as compared to urban demand. Some say, a revival in consumption would help volume growth inch up. Needless to say this is good news for the mono carton converters. For Dabur, the rural market accounts for 45-50% of its revenue. When I looked at the fortunes of the majors, Marico was trading 4.5% down after their Q3 update. The ripple effect could spread among others like HUL, Nestle, Godrej CP and so on.

The buzz among packaging managers who we spoke to is, low to mid-single-digit volume growth; and rural growth is still absent. This is one to keep an eye on.

Flipkart restructure

In August 2023, Anal Jha of Flipkart spoke about sustainable packaging and the world of eCommerce at the 10th Specialty Films & Flexible Packaging Summit 2023, held at the Jio World Convention Centre, Mumbai, on 31 August and 1 September 2023. Now the spotlight is on a Flipkart reboot. The Walmart-owned group may trim rolls by up to 7% which is expected to be complete in hundred days. As per market reports, this means a re-look of their business, existing and new.

Everyone agrees that the macros are tough but we hope Flipkart does not forget the basics that made them a Rs 14,845 cr revenue earner in the first place. Even today, fraud persists. This is especially true for open box delivery of smartphones and other gizmos. No one has the time to go to consumer court and squabble over warranties and consumer rights.