The landscape of FMCG is undergoing a seismic shift. Regional brands, once relegated to niche players, are now grabbing significant market share from established giants.

This edition of the FMCG Insider delves into the reasons behind this disruption. We leverage the invaluable insights from our 20L+ community of retailers to explore what's driving the success of regional brands and what established players can do to adapt and thrive.

Read ahead to know more!

Retailers’ Voice

5 Reasons Why Regional Brands are Winning

It's Regional vs. National in FMCG! Kirana Club app has been buzzing lately with content featuring regional FMCG brands. Intrigued by this shift, we ran a survey and discovered that regional brands sell at par with national brands if not more (52% retailers said they sell regional brands more in certain categories). So we decided to tap into our incredible retailer network to understand why these regional heroes are giving the national brands a run for their money. Here are the top 5 reasons why regional brands are emerging as the new FMCG superstars:

1. Value Play: Quality That Doesn't Pinch Your Wallet: Regional brands are masters of the value proposition. They understand that consumers crave quality ingredients without breaking the bank. So, they focus on using good stuff while keeping prices competitive. It's a win-win for everyone!
   “Kyoki regional brand bade brand se saste hote hai or kuch product ki quality acchi bhi hoti hai” - Bhushan Bansal, Ghaziabad, Uttar Pradesh
   
   

2. Regional Love: Hitting the Right Taste Buds Every Time: Forget mass-produced, one-size-fits-all! Regional brands have a secret weapon - a deep understanding of regional tastes and preferences. They tailor their products to resonate with local palates, creating flavours that hit the sweet spot (or the spicy one, depending on the region!).
   “Regional brand local area ko dhyaan mein rakhkar product banati hai jo unko bahut pasand aata hai jo ki aage chalkar ek achcha chalne wala product ban jata hai” - Nilesh Patidar, Ranigaon, Madhya Pradesh

   
   

3. Faster, Closer, Stronger: The Accessibility Advantage: Unlike national brands with complex distribution networks, regional players are right around the corner. Retailers appreciate the ease of getting local products and the responsive service they receive. This fosters strong relationships and ensures a steady supply of fresh inventory.
   “Local maal sabse zyada isliye chalta hai kyoki maal ki delivery time per hoti hai aur return karne m asaani hoti hai” - Ramlal Bhakhar, Phagalwa, Rajasthan
   
   

4. Innovation Playground: Experimenting to Stay Ahead: Regional brands aren't afraid to break the mould. They're constantly experimenting with new flavours, packaging, and product ideas. This agility allows them to adapt to changing trends and keep consumers excited, unlike established brands that can sometimes get stuck in their ways.
   “Master surf brand walo ka plant hai pass m, pehle rakhi ke naam se surf bechte theh, chala nahi, fir aarti ke naam se, ab master surf laye hai, bahut chal raha hai” - Retailer from Rajasthan

   
   

5. Building Trust: The Power of Familiarity: Regional brands often operate within a smaller area, allowing them to build stronger connections with their customers. This sense of community and shared experience fosters trust and loyalty.

One additional factor contributing to the success of regional brands is their focus on quantity. In a cost-conscious market, consumers appreciate products that offer more for their money. Regional brands often provide more quantity for the same price compared to established brands. For example, a common scenario is finding a 25-gram pouch of namkeen from a regional brand for ₹5, while a national brand might offer just 17 grams for the same price.

These factors, combined with the growing demand for authentic and locally produced goods, are propelling regional brands to the forefront of the FMCG landscape.

Case Studies

Retailers’ Favourite Regional Brands

Our retailer network revealed a treasure trove of regional FMCG champions! With so many exciting names popping up across various states such as Aakriti Snacks, Krown Biscuit, Mayur Masale, Motu-Patlu and more, it was a tough call. But based on the sheer volume of positive feedback and sky-high demand, we've chosen two regional FMCG heroes to showcase their winning strategies.

Case Study #1

Popat Namkeen: Chhattisgarh's Savory Sensation

In Chhattisgarh, the name Popat Namkeen has become synonymous with irresistible flavours. Customers walk into stores specifically asking for Popat's delights, a testament to their loyal following. 

Story of Rahul Verma - Popat’s Retailer Champion

Popat’s Success Story

It began in 1990, a time of immense challenge for the Popat brothers, Bhupesh and Rajesh. Their entrepreneurial spirit, however, wouldn't be deterred. The journey started with a remarkable sacrifice - selling some of their mother's jewels to fund the initial production setup. This dedication laid the foundation for a brand built on passion and quality.

Over the next decade, Popat Namkeen persevered through hardships. Their dedication paid off in 2000 when they transitioned from a manual setup to a fully automatic one. This shift allowed them to cater to the growing demand and introduce new products, like the ever-popular Nylon Saloni, a staple snack in countless households. Fast forward to 2020, and Popat Namkeen stands tall as a testament to perseverance and innovation. Their production capacity has tripled, and the entire operation is automated. But their commitment to quality and customer satisfaction remains unwavering.

Interestingly, Popat Namkeen's biggest competitor isn't a national brand. It's another regional champion - Tulsi - highly praised by our retailer network.
This highlights a fascinating shift: regional brands are now competing fiercely, pushing established giants to the sidelines. As the battle for taste buds intensifies, Popat Namkeen is well-positioned to maintain its dominance by staying true to its roots - quality, innovation, and a commitment to delightful flavours.

Case Study #2

Dhoom Detergent: Conquering Jaipur & Beyond, One Wash at a Time

Dhoom's story began in 2012 with Lt. Shri Jugal Bajaj, who saw the potential for a regional detergent brand built on trust and relationships. Jugal ji, as he's fondly called by retailers, understood that partnering with local distributors and store owners was key. This commitment to collaboration fostered a strong foundation for Dhoom's success.

Story of Mukesh Sahu - Dhoom’s Retailer Advocate

Building a Brand: Jugal ji's Vision

One quote exemplifies Dhoom's approach to growth: "brand banane ke liye brand ka saath lena padega” (To build a brand, you need to take the help of a brand) - excerpt from a retailer's conversation with Jugalji, founder of Dhoom detergent. This philosophy underlines Dhoom's strategic decision to bring on celebrity, Raveena Tandon as a brand ambassador. This move aimed to expand Dhoom's reach and establish it as a household name.

Currently, Dhoom has successfully established itself in several Indian states, including Rajasthan, Haryana, Jammu & Kashmir, Himachal Pradesh, and Madhya Pradesh. With its focus on quality, value, and customer responsiveness, Dhoom appears poised for continued growth and expansion into new markets.

2 More Brands to Watch

Regional Stars Emerge

There are two more brands with captivating stories that deserve the spotlight, following the impressive journeys of Popat Namkeen and Dhoom detergent.

Malani Tea - A legacy of Taste from Hisar, Haryana

Malani Tea, established in 1965 by Sohan Lal Malani, has carved a niche for itself in the competitive Indian tea market. Their success hinges on a winning recipe:

• Affordable Quality: Malani Tea is at par with loose tea (khuli chai) and half of that of established brands in terms of price. This allows them to offer an attractive alternative to both options.

• Superior Taste and Quality: Malani Tea is renowned for its distinct taste and rich color, attracting repeat customers. Consumers appreciate the high-quality ingredients and brewing experience, making them loyal to the brand.

A retailer from Nang Thala, Haryana, emphasizes Malani Tea’s hold on customers: "iska taste achcha hai, agar koi 1 baar peene lag jata hai toh phir isko he piyenge" This quote highlights the power of Malani Tea’s taste and quality in building brand loyalty.

Keshav Masale: The Spice King from Rajasthan

Born from a humble stall in a local market, Keshav Masale has become a household name in Rajasthan, particularly in Gunah and Chhabra. Their journey began with a focus on core spices like mirchi (chilli powder), haldi (turmeric), and dhaniya (coriander), ensuring exceptional quality with each packet. Inspired by established brands, Keshav transitioned to attractive packaging, making their spices more accessible and visually appealing.

Today, Keshav is not just about single spices. They've expanded into masalas (spice blends), catering to evolving consumer preferences. Notably, their chilli powder reigns supreme in some areas of Rajasthan, a testament to their commitment to taste and affordability. While established brands like Suhana Masala offer stiff competition, Keshav's pricing strategy keeps them a favorite. Recently, with a new plant set up in Indore, Keshav is poised for national expansion, bringing their unique blend of tradition and quality to a wider audience.

Conclusion

Regional brands are rewriting the FMCG rulebook. Their competitive pricing attracts budget-conscious customers, while higher margins make them a win for retailers. They build trust by listening to both retailers and consumers, fostering a responsive feedback loop. Maintaining consistent quality and expanding distribution are ongoing challenges, but their success underscores a critical message for established brands: agility is the new standard.

This means offering a wider range of SKUs that cater to specific regional preferences. Gone are the days of one-size-fits-all approaches. Established brands need to develop regional-level strategies informed by in-depth market research. Going beyond state-level segmentation is crucial. By tapping into the local knowledge of retailers and distributors, established brands can gain valuable insights, experiment faster, and innovate more effectively. Embracing these principles will allow them to adapt and thrive alongside the rising stars of the regional FMCG landscape.

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