FMCG companies can drive growth by leveraging brand equity: Report

Worldpanel by Numerator says FMCG firms must leverage brand equity to expand into high-growth categories and win new consumers

Amid rising competition in the country’s packaged food sector and the emergence of new retail channels, fast-moving consumer goods (FMCG) companies can drive growth by leveraging brand equity to establish brand extensions, said a new report from Worldpanel by Numerator (formerly Kantar) shared exclusively with Business Standard.

 

“Brand extensions are necessary and an easy way for any brand to find their growth. They can either grow by going to new geographies or finding new customers or entering new categories or look at things like new-usage occasions, among others. So, brand extensions are a necessity now,” said K Ramakrishnan, managing director (MD), South Asia at Worldpanel by Numerator.

 

The Indian FMCG market has transformed radically, growing to ₹6.8 trillion in 2025 from ₹4.9  trillion in 2021, while the average number of shop trips per household has grown to 153 in 2025 from 124 a decade ago.

 

Products like Godrej Fab liquid detergent and Cadbury choco bakes cakes have been successful extensions of brands, stated the report.

 

For a brand extension to be successful, it is necessary to choose a category with a penetration of over 40 per cent or a three-year compound annual growth rate (CAGR) of 25 per cent or above, the report stated.

 

Before the launch of Godrej Fab, Surf liquid had a category penetration of 31 per cent, but a three-year CAGR of 26 per cent.

 

It is also necessary to target categories with one big player holding at least one third of the category’s volume share and where the large player does not have a high share of requirement.

 

“If there's a large player, there’s a ready-made share available for companies to grab. But if the share of requirement is above 75 per cent for that large player, then customers are extremely loyal to that large player. It will be difficult to dislodge customers,” Ramakrishnan added.

 

Meanwhile, in the frozen foods category, McCain had only a 23 per cent volume share, but a high 75 per cent share of requirement (SOR) — which signals increased brand loyalty. Similarly, Fun Foods mayonnaise had a volume share of 57 per cent in the category, with an 83 per cent SOR, making it difficult for new entrants to dislodge its position as leader. These made it difficult for brands like Haldiram’s frozen foods and Saffola mayonnaise to take off, the report added.

 

The market researcher defined the success of a brand extension as at least 0.5 per cent penetration after one year of launch in its primary market.

 

“Leveraging trust and equity in a core brand is a strategic way to expand a brand and increase consumer interaction for brands. Acquisitions and mergers remain the biggest route to do this, but they are cost and effort intensive exercises,” Ramakrishnan said.