MAGGI MAGIC .............

HUL re-launches Red Label, ropes in Anupam Kher

The country's largest fast moving consumer goods Hindustan Unilever (HUL) today said it has re-launched Brooke Bond Red Label tea brand.

As a part of the re-launch that is aimed at changing the brand's positioning, HUL has released a new advertising campaign featuring Bollywood actor Anupam Kher.

"Red Label has been re-launched as not just a tasty but healthy drink. For the first time the brand will have a Bollywood celebrity as part of the campaign," HUL, Category Head (Beverages) Arun Srinivas said in a statement.

The company's Broke Bond portfolio also includes brands such as Taj Mahal, 3 Roses, Taaza and Sehatmand. Red Label is HUL's largest tea brand, the statement added. 

HUL, P&G, Reckitt, Kellogg's raise margins up to 25%

 Modern retail has taken a lead in its fight against consumer product companies with consumer product companies including Hindustan Unilever and Procter & Gamble increasing retailers’ margins on the wake of tough competition from the latter’s private brands. 

“Since March this year, multinationals including Hindustan Unilever, Procter & Gamble, Reckitt Benckiser and Kellogg’s have been increasing margins by 10-25% in leading supermarkets like Big Bazaar and Reliance Retail to match up with low priced private brands offered by retailers,” a top industry official said on condition of anonymity. 

These multinationals have, however, increased margins only in categories such as diapers, ketchups, floor cleaners, soups, breakfast cereals and toothbrush, where retailers’ private labels have been most active in new launches and gaining market share. 

The friction between retailers and fast-moving consumer goods players over higher margins and better shelf space has been there for some time now and hit the headlines when Future Group , the country’s largest retailer, pulled Kellogg’s breakfast cereals off the shelves of around 150 Big Bazaars.  

“Private Brands, apart from allowing retailers to differentiate their merchandise which over a period of time creates consumer loyalty to the store, make more margins than national brands,” said Devendra Chawla, business head, private brand, at Future Group. “It also helps in growing consumption and expanding category size as India is under-branded and under-penetrated in many categories.” 

Future Group, in the last one year has launched three new brands across a dozen categories. With modern retailers contributing just 6-7% to the total sales of consumer goods companies, their overall margins aren’t getting impacted drastically. But in the last few years, consumer goods companies have been aggressively trying to channel most of their resources into nascent segments like deodorants, diapers and ready-to-eat products that they feel have huge potential.

GCPL board approves merger of GHPL.

“The merger of GHPL with GCPL is an important milestone in our aspiration towards becoming a leading emerging markets FMCG company,” GCPL chairman Adi Godrej said in a statement. 

 

The company said the merger subsequent to GCPL’s acquisition of 51% stake in Godrej Sara Lee (GSLL) from erstwhile partner Sara Lee Corp, will be applicable with retrospective effective from 1 April, 2010. 

The merger will provide us with significant strategic and operational benefits. Both GCPL and GHPL have delivered outstanding performance and we believe that the merger provides us with a scale platform to accelerate our growth and profit trajectory,” Godrej said.  
      
       ccording to analysts, the integration of the two firms will help in bringing more synergies in terms of its distribution and marketing.

“There has been synergy already between the two firms, it will be higher now whether in their distribution channel or marketing,” an analyst with Angel Broking said.
           They will have a bigger basket of products to offer. Besides, there might be certain things, which were overlapping. It will help in overcoming that and help in cost saving, he added.

 

Nirma to de-list for flexibility

         Detergent manufacturer-turned-retail operator, Ahmedabad based Nirma, has decided to de-list its shares from Bombay Stock Exchange and National Stock Exchange. 

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The move is expected to give the management of Nirma, which started with soaps and detergents before diversifying into chemicals,cement ,retail and real estate greater flexibility in operations . The company said in a statement that it will acquire 3.63 crore of its shares not held by promoters, at an offer price of Rs 235 each, a premium of 19 per cent on the average price for the last 26 weeks.

The Board of Directors gave the nod for the proposal on Saturday.

"The promoters believe the profile of the business of the company is likely to further change towards entering into select early stage and capital intensive businesses and the nature and risk profile of these businesses may not be easily understood by and appropriate for non-promoter investors," the company announcement said.

"Such new businesses may also have long gestation periods which are normally not acceptable to public market investors." the company said in the statement. "Therefore, the company is of the view that the next phase of the company's life cycle can be better managed as an unlisted company."

The promoters hold 77.17 per cent of the paid up equity share capital of the company.

Shares of Nirma closed at Rs 224.5, up 3.6 per cent, on Bombay Stock Exchange on Friday 

FMCG brands increase online ad expenditure

   FMCG companies significantly increased their online adspend in the first half of 2010, accounting for £240m of the £2bn spent on the medium between January and June. 
   
    Brands in the sector, which have not significantly invested in the platform in the past, now account for 11.8% of UK online adspend, up from 9.4% last year, according to research from the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

Marketers invested almost £2bn online between January and June this year, equating to a 10% increase on the same period in 2009.

Online now accounts for 24.3% of total UK advertising expenditure.

• The 10% year-on-year growth rate is a marked improvement on the 4.6% increase recorded in the first half of 2009, when the recession was in full swing.

•   In the first half of 2010, search marketing accounted for £1.2bn, or 60%, of the total spent on online advertising.
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• Paid-search grew by 8.9%, while spending on display ads increased by 6.4% to £381m. The majority of the latter was devoted to embedded formats such as banner ads.

• The total spent on digital advertising by FMCG brands was surpassed only by the expenditure of the media, entertainment and finance sectors.

• Media and entertainment brands contributed 14.4% of total spending online, compared with 13.2% for the same period last year.
• Finance brands, meanwhile, lowered their online adspend and accounted for 13.3% of the total, compared with 14.9% for the first half of last year.
• Jon Ingall, managing director, AIS, said: "Display advertising is getting smarter and, because it can be priced and tailored live, it is now a far more powerful tool than it used to be."
• He cited recent campaigns by Old Spice and Marmite as evidence of established brands directing their advertising online in an attempt to attract new audiences.
• Brands spent £20.7m on pre- and post-roll video advertising in the first half on 2010, an 82% rise on the same period last year. This form of advertising is predicted to continue to grow, if web-based TV initiatives such as YouView and Google TV lure adspend.

• Guy Phillipson, chief executive of the IAB, said: "FMCG brands have taken time to understand the evolution of online advertising, but they are now engaging with the relevant platforms.

• "It was tough for advertisers last year, but they have learned a lot and, now that advertising budgets have returned, it is good to see double-digit growth in online adspend, ahead of overall advertising." 

FMCG sector to grow over 50% by 2010

 

      Fast Moving Consumer Goods (FMCG) sector will witness more than 50 percent growth in rural and semi-urban India by 2010, according to an analysis carried out by the Associated Chambers of Commerce and Industry of India (Assocham). 

In totality, it is projected to grow at a CAGR (compounded annual growth rate) of 10 percent and increase its market size to $22.72 billion from the present level of $10.2 billion. 

The growing penchant of rural and semi-urban folks for FMCG products will be mainly responsible for this development, as manufacturers will have to deepen their concentration for higher sales volumes. 

In the rural and semi-urban areas, FMCG market penetration is currently less than 1 percent in general as against its total growth rate of about 6.2 percent, the President of Assocham, Mahendra K. Sanghi, said while releasing the analysis. 

The analysis is based on the feedback obtained from various district industry centers all over the country on the future demand-supply situation of FMCG products. 

Sanghi said the Indian rural market with its vast size and demand base offered a huge opportunity that FMCG companies cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban. 

Though the rural and semi-urban demand of FMCG products will grow, it will put a severe pressure on the margins of manufacturers of FMCG products due to cutthroat competition, finds the analysis. Companies in the sector to benefit will include known names such as Nirma, HLL, Dabur, ITC, Godrej, Britannia, Coca-Cola, Pepsi, among others. 

The chamber is of the view that the rural market may be alluring but it is not without problems such as low per capita disposable incomes and large number of daily wage earners. 

Some of the other problems associated with rural markets are acute dependence on the vagaries of the monsoon, seasonal consumption linked to harvests, festivals and special occasions, poor roads and power problems. 

The other difficulty that FMCG companies are likely to face is that of logistics. India's 627,000 villages are spread over 3.2 million sq km. Delivering products to the 750 million Indians living in rural areas will be a tough task.