FMCGs up R&D spend on design

According to the innovation design engineering (IDE) division of Tata Elixi, which designed the Women's Horlicks bottle for GSK, spends on product design by fast moving consumer goods (FMCG) companies have gone up two to three times in the last seven years.  Increased competition and a growing need to differentiate one's product in the FMCG sector, which has become crowded with record number of new product launches in the last year itself, has led companies to step up their spends on product design.  Anil Narayan Sondur, general manager, IDE, Tata Elixi, said, "About seven years ago approximately 5 to 8 per cent of research and development spend of companies was put in for product design and packaging. However, recently this number has risen to 15 to 20 per cent of the total R&D spend by FMCG companies. We see the reflection of this growth in our own business that is growing by 45 per cent year-on-year."  FMCG major Hindustan Unilever (HUL) spokesperson said "Companies are definitely increasing the cost of repackaging and the R&D involved in it. After the revamping of Sunsilk from a brand which was well known among the older generation, the new iconic and aspirational positioning has definitely helped the brand.  The new look has increased the market shares and sales. The relaunch of Sunsilk has given significant consumer feedback, according to data by market research firm IMRB, 100 per cent have seen a change in the brand Sunsilk and 50 per cent in the overall packaging."  United Spirits (USL) in February also relaunched its whiskey brand McDowell's No 1 in a new smartpack designed by a Flex-America and new look by Claessens International. It aims to become the largest selling whiskey brand in the world by attracting consumers through its new design. It is already the fourth largest and is growing the fastest at 43 per cent in 2007 with sales crossing 9 million cases. Mathew Xavier, business head, United Spirits, attributes the position of its brand to the constant innovations in product, packaging, marketing and promotions undertaken by the company.  He said "Packaging was always considered as something needed for protection. However, with changing times it has emerged as one of the key differentiator and has gained importance due to its high display value. Consumers can now pick and feel their brand as they have access to the shelves that was a distant reality prior to the retail revolution."  Companies say gone are the days when the kirana shop keeper would hand over products to a consumer and the consumer had no choice. To survive in this clutter of brands, one has to keep up with the spirit of the time and match with the modern habits of the consumers.  To keep up with a continuously upgrading consumers who want the best, companies are at a cut throat competition to deliver the best and be singled out among the clutter.