Can FMCG companies manage high growth rates without compromising on margins?
Yes, this would be possible if the FMCG company is consumer centric and focuses on increasing value creation for the consumer which ensures rising margins. This way the consumer pull goes up and so does the margin. Thus, it is important to build value- have an insight into the needs of the consumer and offer a product that addresses these needs- and through that build strong brand equity. In such a scenario, more often than not, consumers are willing to stay with the brand despite moderate price increases to counter input price increases. Also, FMCG companies have been working at improving efficiencies across the supply chain to ensure reduction in costs. These contribute toward continuous improvement in margins. There would, of course, be times when…
