Sparkle for premium brands

Aarati Krishnan

FABRIC wash was among the few FMCG categories that did not entirely fall prey to a promotional free-for-all in 2001.

Unlike toilet soaps or toothpastes, where every major brand offered substantial free volumes by the end of the year, promotions in the detergent market remained relatively low-key. The shrinkage in the detergent cakes market did appear to drive marketers to desperation for a brief period (with a spate of '1 free for every 3' offers), but this activity appears to have subsided.

The players have instead concentrated on re-launching old brands and improving formulations to deliver better quality products to consumers. In this respect, it is the premium end of the market (which incidentally is better equipped to handle price increases) that has seen considerable activity. HLL relaunched Surf and Surf Excel during the year, claiming better stain-removing abilities for both brands after the addition of new ingredients. P&G rolled out Ariel Total Compact, with Magicare, a new system of washing that it claims removes stains without scrubbing. Henkel SPIC recently launched Henko Powerpearls, a premium product positioned against Surf Excel and Ariel Compact in the super premium segment.

HLL claims it is the premium segment that has recorded the highest growth rates this year. This is also evident from the healthy double-digit growth rates in premium brands such as Surf and Henko Stain Champion in 2001. Since the premium segment offers higher margins, this should be good news for the major players which have a presence at the higher end of the market.

Henkel SPIC, which restricts its presence to the mid-priced and premium segments, appears to be a big beneficiary of this trend. However, Nirma, which straddles the mid-priced and economy segments, is unlikely to be in a position to take advantage of the opportunity in premium powders.

This is also partially reflected in the financials of the respective companies. HLL's fabric wash portfolio grew by 5.2 per cent in the first half of 2001 and by a higher 10 per cent in the July-September quarter. Henkel SPIC saw its sales growth accelerate from 6.5 per cent to nearly 15 per cent in the July-September quarter. However, Nirma's sales shrunk by around 4.5 per cent in the April-September period.