Too Many Sweet Offers In This Festive Season

It’s that time of the year when we have been hearing about bumper sales offers and celebrations all over the country. Extracting the maximum profits during the festive months is what the brands strive for.

For most people, sweets are a hallmark of the festive month, synonymous with sweets, which has led to a significant increase of 71 per cent in their sales, as per the CUTS Institute for Regulation and Competition.

Tarak Bhattacharya, Executive Director, Mad Over Donuts said, "The customers are actively seeking a perfect gift for their loved ones during this time. Understanding their needs and diligently promoting the right product to the right person through online media and social networking websites is the way to go. A customised touch and fun discounts can easily make the brand stand out and earn a good profit as well."

When asked about the sales in August in comparison to the last two months, Geetika Mehta, Managing Director, Hershey India said, "We have seen increased momentum for FMCG brands, especially premium chocolates, related to Rakhi gifting and increased outdoor consumption, led by receding summers across the country.  On the back of our core portfolio, gifting, and new launches, we expect to lead category growth from August through Diwali and Christmas."

Standing Still In An Inflationary Environment

The report by CRISIL ratings states that the FMCG sector’s revenue will proliferate from five-six per cent in FY21 to 10-12 per cent in FY22. Nonetheless, the sector also witnessed healthy FDI inflows of USD 20.11 billion from April 2000 to March 2022. The February union budget has also allocated Rs 1,725 crore to the department of Consumer Affairs and Rs 215,960 has been provided to the department of Food and Public Distribution.

Contemplating the chocolate industry in the FMCG sector, the report reveals a positive growth of 30 per cent increase in sales in the category of chocolates, biscuits and other sweets.

Though the industry is witnessing some headwinds as the inflation rate has dipped to 6.71 per cent for the third time in a row, which has resulted in increasing commodity prices. The current GST applicable on khandsari sugar is 5 per cent and  12 per cent GST is applicable on condensed milk, butter, ghee, and cheese, which are the basic requirements for making sweets.

The experts believe that innovation and personalisation are the key elements to attracting a range of audiences and providing them with customised offers to suit their liking. The key to surviving and succeeding in such times is to understand consumers' needs and external influences.

Sales Manoeuvre

The FMCG sector's food and drink brands ads expenditure is expected to boom by 14 per cent per year, the Zenith (Publicis Groupe-owned media) report stated. On the other hand, Business Intelligence-FMCG Food and Drink covered 12 global markets, which included the US and UK. The agency predicted a steady growth between two per cent to five per cent.

Bhattacharya points out that the festive seasons are a good time to improve sales. Brands should enthusiastically increase their online presence for better reach and engagement. Mad Over Donuts invested in online media through Google Ads, Aggregator Tie Ups and video content on social media for people to spot our special discounts and offers and also become aware of our activities and deals.

Taking a sneak at the pandemic times in 2021, the television ad accounted for 50 per cent and a total of 38 per cent was spent on digital media ads.

Mehta had planned the recent campaign for Rakhi, where they executed a full-funnel performance campaign on digital media to support Ecommerce exclusive gift packs. The strategy followed by Hershey’s in the festive season was to curate experiences by launching e-commerce packs and DIY cards for immersive and shared gifting. The brand also carried clutter-breaking campaigns and curated content through influencers and the traditional media. In an attempt to drive sales, they also increased the availability in stores and targeted sampling.

Due to the rapidly rising disposable incomes in India, there will be a boost to FMCG advertising spending in India due to the booming consumer market, the experts affirmed.

Keeping A Bullseye On Audience

A new generation of digital natives is changing how we buy. "In comparison to people of all ages, on average, 68 per cent of GenZ and 58 per cent of millennials have ordered directly from brands," according to the Capgemini Research Institute report.

The experts noted that with their extensive social media use and screen time, Gen Z seems to be the most engaged audience with the marketing campaigns as compared to other generations.

Meanwhile, they firmly believe that brands should keep an eye on the ongoing trends in the market and launch new products to cater to different sets of customers. By innovating new products, the brands can meet a variety of consumer cohorts.

The festive August season has been sparked due to the bumper sales and offers that have brought delight and happiness to the consumers' lives.