Smaller Companies giving tough competition to bigger FMCG companies/Brands

The acquisition of three Henkel brands by Mumbai-based VVF is not an isolated development in which a small FMCG company beat a large retail group to

buy brands owned by a multinational. There is a silent revolution on in the Rs 85,000-crore FMCG industry in the country: the rise of a number of small companies into national players.



From prominent players like Paras Pharma, Cavin Kare, Zydus Wellness and MTR to lesser-known ones such as Capital Foods, Desai Brothers and Temptation Foods, these companies have started to give sleepless nights to leading consumer product multinationals such as Hindustan Unilever, Procter & Gamble and Nestle.



While it may look like a battle between David and Goliath, the small companies are growing in strength and expanding their presence, with some help from modern retail that let them share shelf space with bigger brands.

The Rs 400-crore Ahmedabad-based Paras Pharma has mastered the art of developing successful household brands such as Moov, Krack, D’cold , Dermicool and Itchguard, across niche product categories. The company has been growing at 15% a year, with FY10 providing strong growth of 25% in revenues.



Its Dermicool brand in the prickly heat & cooling talc category is a market leader with a 33% share. Its deodorant brand Set Wet is No. 2 in the male grooming category after HUL’s Axe and enjoys little over half of the latter’s market share. Its D’cold brand increased its market share while the shares of its competing brands like Vicks Action 500 and Crocin Cold & Flu stagnated. Its hair serum brand Livon dominates the category despite Procter & Gamble launching Pantene Hair Serum.



In a category like tomato ketchup, dominated by Nestle’s Maggi and HUL’s Kissan, Mumbai-based Capital Foods has amassed a highly respectable 20% share with its Smith & Jones brand, launched in late 2007. Its Chinese cuisine under Ching’s brand is also steadily gaining market share against Nestle’s Maggi and HUL’s Knorr.



Zydus Wellness, the divested FMCG business of Cadila Healthcare, has successful brands like Sugar Free, EverYuth and Nutralite, while Rajkot-based Balaji Foods is giving tough competition to Frito Lays in the potato chips category.



Kolkata-based Bisk Farm is a Rs 100-crore biscuit manufacturer competing with Britannia, Parle and ITC.


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