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Change Is The Only Constant

The health- and environment- conscious consumer could compel the FMCG sector to closely examine the ingredients and the packaging process

Photo Credit : Bivash Banerjee

1503647757_C72lqy_Varun-Berry-of-Britannia_BB470.jpg

Is the world I imagined 30 years later, back when I started working in 1986 same as what I see today? Heck, no! When William Gibson said, “Future is here, it’s just not evenly distributed,” he perhaps hadn’t accounted for India, which chugged along the socialist line. An embarrassing economic event of 1991 wrought a change that catapulted India forward. From an era when the middle class waited years for a phone connection, the transformation is complete when my driver calls to announce delay for he is stuck in traffic.

Amidst this upheaval, FMCG sector has scarcely changed. Product assortment has evolved slightly but the old favourites still dominate, shops have increased in number but possess the same basic character. The revolution seen in technology sector is conspicuous by its absence. However, next 30 years will be different because consumers will be different. This future is here to see. And  Gibson would be happy!

Let us visualise the India of 2047. Assuming a 4.5 per cent real GDP growth and 1.5 per cent population growth over 30 years, per capita real income will be 2.5x of today. Ergo, affordability will not be as critical a factor in consumer choice. India will be 1.65 billion strong with a median age of 37 years. Age cohort with most economic influence would be 18-50 years. Talk to the 10-20-year-old today and you get a sense of where the world will be in 2047. Let me call this cohort Gen-Rad, rad being their moniker for Radical.

Their world view is being shaped by a concern about sustainability of life on earth. This is not mere idealism but a hard-nosed realism. This manifests as care for the environment, physical wellbeing, going back to the natural and living in the now. This is nothing like the economically insecure, nest-egg building, rebel without a cause generation of mine. Gen-Rad prefers natural, shuns preserved, avoids excess, preserves individuality and tries to make the world sustainable. This force will affect the FMCG business in three big ways. Mass-customisation, natural/fresh and reduce-the-bad. Each of these will transform FMCG into something it is not today.

Mass Customisation
Yes, it is an oxymoron, but I see it play out already. Take the Indian decorative paint business, which as mixers at retail stores churning out shades. Across the world, there are fresh baked cookies/croissants from frozen dough and soda fountains. This will repeat in categories in unimaginable ways. What stands between a consumer and a million different deodorant fragrances or ice-cream flavours is technology. Prepare yourself for a store that has no shelves and check-out counters but only machines and mixers that deeply respect your idiosyncrasy.

Back to the Nature/Roots
Natural, not artificial, is the new mantra from medication to milk. One sees this manifested in the success of nature- based propositions in food, cosmetics and many more. But the movement is getting stronger and will pervade all aspects of consumption. This will mean FMCG companies have to be careful of ingredients. Organic, no artificial, fresh-off-the-farm will not be buzzwords but business models. With this, long shelf life, non-biodegradable packaging will be penalised. FMCG that benefited from the efficiency wrought by the synthetic material and ingredients will have to reorient its procurement, manufacturing, storage and distribution to meet the new consumer need. Smart companies will combine mass customisation with back to nature phenomenon to deliver fresh, just in time and naturally preserved solutions.

Reduce the bad
Plastics, insecticides, fertilisers have already turned villains and others like preservatives are getting there. This will cause an overturn that few companies are prepared for. Today I don’t know how my business will run without polymers. I am not aware of a large scale, viable solution. Using paper or metal to replace polymers will likely exploit the environment even further. Here again, the age-old concept of recycling or reuse will acquire a new meaning. I am reminded of my younger days when one bought milk and brought it back home in one’s own container. May be that model will come back, and this time, for even biscuits, balms and beverages!

Last, technology will change FMCG distribution forever. Many consumers have shifted to electronic shopping, more will do so. Making and packing closer to consumption will change transportation and storage practices. In short, skills that helped me succeed in last 30 years will be useless in the 100th year of Independence!

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Varun Berry

The author is MD, Britannia Industries

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