New Delhi: FMCG player Godrej Consumer Products (GCPL) is mulling further price hikes on some products across all segments in the next few months as high input cost continues to put pressure on its profitability.
The company, which primarily targets the mass market, is also looking at “premiumisation” of its product categories as part of its plan to enhance its reach to the urban population.
“Rising input cost is still a pain area for us. Oil prices are going up. Besides, foreign exchange is giving an incremental impact on our business. It is definitely putting pressure on our margins,” GCPL executive vice-president (head of marketing) Tarun Arora told PTI on the sidelines of an event organised by the Nielsen Company.
He said the company has taken various steps, including managing its cost efficiently and prices increases to offset the high input cost.
Arora said the firm might consider taking price increases in the next few months across some of its product categories. He, however, did not specify by how much the company will take the price hike and in which products.
“We may have to take price increases in the next few months. We have taken couple of times this year,” he said, adding the soap category is the most affected one.
“We are studying the situation right now and are evaluating which other categories we can take the price increase,” Arora said.
In the recent past, GCPL has taken price hike primarily in the soaps and insecticides segment.
Despite high inflation putting pressure on consumers, the company said it is also looking at upgrading some of its product range with an aim to enhance its presence among the higher income population.
“We are looking at premiumisation of some of our range also as see a growing trend among consumers of upgrading their choices but we will never be at the very high end,” he said.
Stating that the company would like to cater to consumers across all segments of the society, he said: “We already have products like Cinthol which are more popular among urban masses.”
According to a Nielsen study released on Tuesday, Indian consumers are upgrading their shopping baskets with indulgent items that cost more. For instance, premium products contribute more than 21 per cent to the growth of the FMCG sector than other price tiers.
“Even in rural India, the age of individual gratification is gradually replacing frugality and austerity,” Nielsen Vice President Prashant Singh said.