Consumers may have to spend more on everyday household products in the coming months as several major FMCG companies prepare for fresh price hikes during the September quarter.
Rising prices of key commodities, higher input costs and uncertainty linked to global geopolitical developments are putting pressure on the margins of leading consumer goods companies. As a result, major players including Britannia, Dabur India, Hindustan Unilever and Godrej Consumer Products are considering calibrated price increases or other measures such as reducing product quantity to manage rising costs.
Despite inflationary concerns, FMCG companies remain optimistic about demand, supported by steady consumer spending, premiumisation and improving revenue growth.
FMCG Companies May Take Further Price Hikes
The FMCG sector had already implemented average price increases of around 2% to 5% during the April-June quarter. Companies are now expected to continue taking selective pricing actions in the July-September period.
In some cases, brands may also rely on shrinkflation—reducing the quantity or grammage of a product while keeping its price unchanged—to protect their profit margins.
Companies are closely tracking several risks, including commodity inflation, fluctuations in crude oil prices and weather-related factors such as the monsoon and a possible El Niño impact.
Britannia Plans More Pricing Action Through Shrinkflation
Britannia has indicated that consumers could see additional pricing action during the September quarter, particularly in its popular ₹5 and ₹10 biscuit packs.
The company expects to take an additional effective price increase of around 1.5% to 2%, largely through shrinkflation, as the cost of important raw materials such as sugar and palm oil remains elevated.
During the company’s earnings call, Britannia Managing Director and CEO Rakshit Hargave said further pricing measures were likely in the current quarter.
“If the overall impact was 1%, you would probably see maybe another 1.5-2% coming in,” he said.
Britannia said much of its pricing-led growth in the first quarter came through reducing pack sizes, and the company expects further measures to manage continued pressure from rising commodity prices.
Godrej Consumer Products May Also Increase Prices
Godrej Consumer Products Ltd (GCPL) had already raised prices by an average of around 5% during the June quarter and may consider similar action in the current quarter.
However, the company has avoided implementing sharper price hikes because of uncertainty around crude oil prices.
GCPL CEO Sudhir Sitapati said the company could take price increases in the September quarter similar to those implemented earlier.
“We may get a similar kind of price increase in Q2 as well,” he said.
The company’s cautious approach reflects the challenge FMCG brands face in passing higher costs to consumers without hurting sales volumes.
Dabur Sees Continued Pressure From Higher Input Costs
Dabur India has also indicated that elevated input costs could remain a concern in the near future.
The company plans to use a combination of selective price hikes, productivity improvements and cost-efficiency measures to protect its margins.
Dabur India Global Chief Executive Officer Mohit Malhotra said growth is increasingly being driven by higher product prices and revenue rather than stronger sales volumes.
“Because of inflation, we had to pass it on to the consumer. Price growth and value growth are becoming higher than volume growth,” he said during the company’s earnings call.
He added that sales volumes could remain under pressure if inflation continues to stay high.
HUL Expects 2-5% Sequential Inflation
Hindustan Unilever Ltd (HUL) is also preparing for inflationary pressure across several product categories.
The FMCG major expects sequential inflation of around 2% to 5% during the September quarter compared with the April-June period. As a result, the company may take further pricing action across multiple products.
HUL’s strategy is expected to focus on balancing cost pressures with consumer affordability, especially in categories where demand could be affected by sharp price increases.
Why Are Everyday FMCG Products Becoming Costlier?
The potential increase in FMCG prices is largely being driven by rising costs of essential raw materials and other inputs.
Key factors influencing prices include:
- Higher commodity prices, including sugar and palm oil
- Volatility in crude oil prices
- Global geopolitical uncertainty
- Rising packaging and transportation costs
- Weather-related risks, including monsoon conditions and El Niño
- Continued pressure on company profit margins
FMCG companies must carefully decide how much of these higher costs can be passed on to consumers.
What Could It Mean for Consumers?
If the planned price hikes go ahead, consumers may see a gradual increase in the cost of everyday products such as biscuits, personal care items and other household essentials.
However, companies may not always raise the printed price of products directly. Some could instead reduce the quantity of products in smaller price-point packs, particularly those sold at ₹5 and ₹10.
This means shoppers may end up getting slightly less product for the same price—a strategy commonly referred to as shrinkflation.
FMCG Demand Remains Resilient Despite Inflation
Even as companies prepare for further pricing actions, the overall outlook for the FMCG sector remains relatively positive.
Major brands continue to see support from resilient consumption, increasing demand for premium products and improving revenue growth. The key challenge for companies in the coming quarter will be managing inflation without significantly affecting sales volumes.
With raw material costs and global uncertainties continuing to influence the market, shoppers may need to prepare for selective price increases or smaller pack sizes in the months ahead.