Small pack sizes, higher grocery bills rule FMCG purchases in south: Survey

  • Overall five states in South India contribute to about 24% of overall FMCG sales in the country
  • South India spend roughly 7,892 on FMCG compared to 7,365 spent by the rest of India

Suneera Tandon
Updated17 Apr 2019
The grocery bills of South Indian states are on an average higher than the rest of India.
The grocery bills of South Indian states are on an average higher than the rest of India.(Mint)

New Delhi: Shoppers in India’s southern states indulge in small pack sizes, are more experimental, and spend more on an average on their household groceries compared to the rest of India, according to a study by research firm Kantar Worldpanel.

The research firm carried out a monthly consumer survey to study the annual shopping habits of households in south India, mapping the monthly purchases of fast moving consumer goods (FMCGs), their frequency of shopping, and what they spend on. India’s five southern states are more urbanized, economically ahead, better developed and even socially ahead of the rest of the country, Kantar said.

This, it said, has an influence on the shopping behaviour of households in the region.

The five south Indian states account for roughly 24% of overall sale of FMCGs, said K. Ramakrishnan, group head and general manager, Worldpanel division, Kantar in India. At 33%, southern states have a higher concentration of SEC A and B households than the rest of India that has 24% such households. Per capita net state domestic product (NSDP) in the south is well beyond 1,30,000 as opposed to a national average of 85,229. These states are also more urbanized than the rest of India, data sourced from census 2011 by Kantar shows.

All these factors “determine some level of affluence or a slightly more forward consumer demographic and that’s perhaps the reason they are experimenting”, Ramakrishnan said.

The grocery bills of these states are also on an average higher than the rest of the country. Southern homes spend roughly 7,892 annually on FMCG compared to the 7,365 spent by the rest of India. These households also buy more small-sized packs, reflecting a shopper who is open to trying out new products, albeit at lower price points. “Southern households are in love with smaller packs,” said Kantar’s research note, adding that the average pack size bought in the South is 178 grams (excluding packaged wheat flour), which is significantly less than the 215 grams average for the rest of India.

Clearly, though they buy small packs their preference to make fewer trips to the grocery stores causes them to buy more packs in one go. This is reflected in the number of packs bought—south buys 586 packs of FMCG in a year; while rest of India buys 534 packs. They spend more on food products and households care products, Kantar’s research showed.

“On average, southerners pay 31% more for household care products and 12% more for food and beverage products than the rest of the country,” the study said.

The south contributes to a quarter of sales of packaged foods company Parle Products. Not surprisingly, it is a market where the maker of Milano cookies, and Parle G biscuits offers the maximum amount of stock keeping units. Evolved retail channels and consumers who are willing to spend on trying new, and more expensive products merits the presence of a wide variety, said Mayank Shah, senior category head at the Mumbai-based firm. “The south, unlike other zones, has a very well-developed multi-channel distribution. For instance, it was among the first zones to latch on to modern trade, and has also been a pioneer as far as digital marketplaces are concerned. Given these variables, the consumer in the south is far more evolved,” Shah said.

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