Social Throwback 2022: The changing face of FMCG advertising & packaging

Social Samosa speaks to industry experts to understand how the FMCG industry changed with the changing needs of the post-pandemic consumer, especially as inflation becomes a concern.

COVID-19 had an adverse effect on various sectors of the economy, especially the FMCG sector. After the industry started recovering from its aftereffects, another curveball hit its way - inflation.

The festive season is one of those times for brands when they go all out on advertising where FMCG takes the biggest cut. But unlike pre-pandemic, the country’s biggest spenders cut down on their advertising budgets. 

A direct reason for these budget shavings was inflation and its direct effect on raw materials and consumer spendings. According to Kantar Worldpanel’s report, the rural market’s consumption drastically fell, which was the fifth fall for the country in this sector in July-September of this year. 

With rising inflation and other affecting factors, brands were forced to increase their costs while cutting down on FMCG advertising. 

Krishnarao Buddha, Sr. Category Head - Marketing - Parle said, “With the geopolitical war and rising inflation, this was a time when we were struggling to manage these . In many such cases, we were forced to take either a direct or indirect price increase.”

To drive sales amidst inflationary pressures, brands looked for ways to cope. One method that stood out in FMCG advertising this year was many brands moved on to produce smaller packs of their products. 

With money crunch being a major factor in purchasing decisions, consumers sorted to buy smaller packs but to fulfill their requirements pushed them to buy more, said a report by Kantar. 

Krishnarao Buddha added, “The want for smaller packets differed from market to market. Tier 2 and Tier 2 towns had a greater acceptance of smaller packages than urban markets.”

Digital advertising: The saviour

Another big pattern that was seen across brands when it came to driving sales in between budget crunches was moving towards digital. According to a report by Nuvama, digital models became the key ingredient for FMCG advertising this year. Many brands found a niche market in the online market by incorporating digital marketing in their marketing mixes. 

Mukesh Ghuraiya, CMO, Modi Naturals said, “Since digital channels are growing for us, we continued to spend on the digital marketing and brand engagement efforts with an ‘always-on’ approach. It helped us to stay top-of-the-mind in tough times as well. We also kept our platform marketing budgets intact to continue the momentum we had built in the last year.”

With changing times and customs, the marketing sector had to realign its strategies as well. Social media had a big role to play in reaching the audience for the FMCG market amidst budget constraints. A large number of D2C brands came into play as well that sorted to digital as their primary mode of connection with the audience. 

“Since our major focus is the digital medium and e-commerce platform, we used search history and previous buying patterns to improve the customer experience. We did leverage our social media presence to market our products and strengthen our branding.” said, Vanda Ferrao, CMO, WOW Skin Science. 

With this digital-first approach from many brands, the FMCG advertising industry hopes to recover from the major losses incurred this past year. The coming year still hopes to heavily rely on digital, quick-commerce, and more.

Healthy packs make their way

Interestingly enough, consumers chose to spend on FMCG goods very wisely. With COVID-19 having a great impact on the audience’s buying patterns, this year consumers put extra care into choosing healthy products. This saw an increase in FMCG brands coming up with healthier variants of their products. 

Consumers are more concerned about what’s going on behind the scenes of their favourite products. Not just healthy products, but consumers are also choosing brands that are transparent and follow up with their claims.  

Ved Agarwal, Head of Marketing - True Elements said, “Consumers have become aware of what they are consuming and hence are choosing their brands very carefully - with increasing importance placed on Back of Pack information, Ingredients, Nutrition Declaration etc.” 

Future of FMCG advertising 

Talking about the trends that they foresee in the marketing front for the FMCG sector, Ajay Khanna, CMO, Amway India says, “Going forward, performance marketing and return on Ad spend on every marketing initiative will play a crucial role to build the brand and drive business. Our communication will be focused on content that is social and digital first, which resonates with the language and persona of health-conscious consumers alongside leveraging on-moment marketing  and user-generated content to further help the brand engage with existing customers and reach  new consumers.”

Also Read: Social Throwback 2022: Metaverse campaigns that married commerce with creativity

Ashish Khandelwal Managing Director - BL Agro adds, “Rational advertising and more creative and innovative ideas would work in the coming years. Changing the stereotypes will definitely work well for the brands.” 

The coming year seems to focus more on hyper-personalization and catering to what the consumer truly wants and needs.

Vanda Ferrao mentions, “Content will be king, and content-led marketing will be more accepted among consumers over traditional marketing methods.”

Despite several challenges, FMCG industry has found a creative way to reach out to their audience. In 2022, brands upped their spends on digital and focused on launching healthy products for urban audiences. In the future, digital advertising will continue to be an important part of FMCG strategy.

Social Throwback is Social Samosa’s marquee editorial property that recaps the important happenings of the industry from the year that went by. You can catch up with 2022 here.