The decline in consumption of traditional FMCG products among India’s urban middle class reflects complex and evolving consumer behaviors shaped by both economic pressures and lifestyle shifts. Companies like Britannia, Nestle, and Dabur have reported slowed sales growth, particularly in metro areas, with Britannia observing that metropolitan regions contributed disproportionately to the recent consumption slowdown.
While rising inflation and economic uncertainty have strained household budgets, possibly prompting consumers to reduce discretionary spending on snacks and packaged foods, there may be another equally significant factor at play. As health awareness grows, consumers are increasingly critical of products high in palm oil, hydrogenated fats, and sugar – ingredients that are common in many legacy FMCG products. This could be causing consumers to prioritize spending on healthier alternatives, leading to a gradual decline in demand for products perceived as less nutritious.
The shift towards health-conscious choices is noticeable across India’s urban middle class, driven by increased access to information about nutrition and a rise in health-related concerns post-pandemic. Many consumers now prefer foods that align with wellness trends, seeking products free of artificial additives, lower in sugar, and without harmful fats. This is likely pushing them toward brands that emphasize natural ingredients, functional benefits, and cleaner labels, even if they come at a premium.
New-age brands and startups offering organic, plant-based, or minimally processed options are gaining traction, especially in urban areas. For traditional FMCG players, this shift poses a challenge as they are often perceived as lagging in the wellness space, where newer entrants have positioned themselves as more transparent and innovative. Consequently, the urban middle class's evolving preferences might be less about reducing biscuit consumption and more about replacing them with alternatives they consider healthier.
While rising inflation and economic uncertainty have strained household budgets, possibly prompting consumers to reduce discretionary spending on snacks and packaged foods, there may be another equally significant factor at play. As health awareness grows, consumers are increasingly critical of products high in palm oil, hydrogenated fats, and sugar – ingredients that are common in many legacy FMCG products. This could be causing consumers to prioritize spending on healthier alternatives, leading to a gradual decline in demand for products perceived as less nutritious.
The shift towards health-conscious choices is noticeable across India’s urban middle class, driven by increased access to information about nutrition and a rise in health-related concerns post-pandemic. Many consumers now prefer foods that align with wellness trends, seeking products free of artificial additives, lower in sugar, and without harmful fats. This is likely pushing them toward brands that emphasize natural ingredients, functional benefits, and cleaner labels, even if they come at a premium.
New-age brands and startups offering organic, plant-based, or minimally processed options are gaining traction, especially in urban areas. For traditional FMCG players, this shift poses a challenge as they are often perceived as lagging in the wellness space, where newer entrants have positioned themselves as more transparent and innovative. Consequently, the urban middle class's evolving preferences might be less about reducing biscuit consumption and more about replacing them with alternatives they consider healthier.
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