Undeterred by Maggi issue, other product launches double

There were 52 launches during January-June 2015, compared with 29 in the year-ago period and 32 in 2013.

Belying concerns that the packaged goods sector might be on a back foot in the wake of the ongoing Maggi controversy, product launches doubled in the first six months of 2015 (calendar year) compared to the corresponding period last year.

The Maggi controversy erupted in May this year after the Uttar Pradesh Food and Drugs Authority flagged the product for excessive presence of lead.

Subsequently, Nestle pulled it out from the market. The Bombay High Court, subsequently, lifted the ban subject to fresh tests.

According to data by market research firm IMRB Kantar World Panel, there were 52 launches during January-June 2015, compared with 29 in the year-ago period and 32 in 2013.

The new launches are split across categories from personal care to food & beverages (F&B) to household care products.

Personal care products constituted 60 per cent of the launches, while 34 per cent were from the food & beverage stable and homecare contributed six per cent of the launches, according to the data.

For its analysis, IMRB considered around 60 categories across personal care, home care and F&B, among others.

However, industry officials said most of the launches happened before the Food Safety and Standards Authority of India (FSSAI) termed Maggi harmful. "I would say 52 new launches in a year in an evolving and high growth potential market like India is quite normal. Had the Maggi issue not happened, the number of launches would have been higher," said Mayank Shah, deputy marketing manager at Parle.

According to Shah, the expectation of revival in consumer demand had encouraged the consumer goods companies to go for more launches.

"I expect it to be the same during the next half (July-December), too. In spite of the monsoon not being up to the mark, the festive season is a big reason for that."

Simultaneously, the companies splurged heavily on advertisement and promotion during the period.

Data from EY show the sector majors such as Hindustan Unilever, Britannia and Emami's advertisement spend increased by 199 basis points (bps), 21 bps and 274 bps, respectively.

"The companies are hoping that with the consumer sentiment showing a slight change of improvement, it is the right time to market themselves more aggressively. With the raw materials prices staying low, it is expected to remain the same in the coming quarter," said Pinaki Ranjan Mishra, partner and national leader - retail and consumer products - at EY.