Reliance Consumer Products Limited (RCPL) is still on our radar in the FMCG industry. The company has said that it is expanding its line of FMCG products and entering the home and personal care markets. RCPL wants to keep the price range of this venture 30–35% lower. The historic Campa brand's redesign also highlights RCPL's distribution alliance and beverage-focused focus.
Additionally, RCPL intends to go after the dairy and frozen food markets.
Things to watch for:
- Expansion of distribution is a feat that typically takes time (M&A could help); setting up shop infrastructure such as Visi Coolers by RIL.
- Manufacturing tie-ups.
- Marketing and advertising initiatives by the company.
Portfolio expansion in home and personal care segments
Foraying into home and personal care products, RCPL is expanding its FMCG portfolio to mom-and-pop stores. In its arsenal are brands such as Glimmer beauty soaps, Get Real natural soaps, Puric hygiene soaps, Dozo dishwashing bars and liquids, HomeGuard toilet and floor cleaners and Enzo laundry detergent powder, liquid and bars.
RCPL’s pricing for these products undercuts market leaders. However, given limited shelf space, securing distribution in kiranas will be gradual. Apart from pricing, factors such as quality, consistency, marketing etc. need to be monitored.
Aggressive on beverages
With the launch of Campa, RCPL strengthens its portfolio in the beverage segment, along with the JV with Sosyo Hajoori Beverages. The Campa portfolio is priced competitively. As per media reports, the company is in advanced talks for partnership with leading Chennai-based Kali Aerated Water Works (Kalimark), makers of Bovonto soft drinks, for the manufacturing and distribution of the Campa range of products. For enhanced branding, RCPL has tied up with three IPL teams as ‘pouring partners’ to plug Campa Cola in this cricket season.
About the portfolio
The home and personal care portfolio includes Glimmer beauty soaps, Get Real natural soaps, Puric hygiene soaps, Dozo dishwashing bars and liquids, Home Guard toilet and floor cleaners and Enzo laundry detergent powder, liquid and bars.
Soaps: RCPL launched Glimmer, Get Real and Puric soaps that are in Grade-1 soap category with mandatory 76% Total Fatty Matter (TFM). They come with a variety of fragrances. Glimmer includes Rose, Jasmine, Lavender, and Floral Burst variants. Get Real has Sandalwood, Neem and Mixed Herbs, while Puric has Active Power and Turmeric Aloe.
Homecare: Dozo dishwash liquid has a unique 2X POWER WASH formula with bio-enzymes that helps loosen tough stains to make dishwashing effortless. In addition, RCPL will launch a highly effective range of toilet and floor cleaners under the Home Guard brand along with laundry detergent (bar, liquid and powder) under the brand, Enzo Smart wash.
RCPL plans to scale up these launches through omni-channel distribution across India in the coming months. In soaps, some brands such as Lux and Santoor are established and dominate the market. Besides, there are more than 1,000 other brands that are available in the market. But, unless RCPL’s soaps becomes a brand and starts advertising with media campaigns and making products available in the market, it may not gather traction.
After sparking a price war in the carbonated beverages market, RCPL has taken the price battle to more segments in the FMCG market. Within the home and personal care range, we observe that the price points for soaps, dishwashing bars and detergents are 30-35% lower than the market leaders across these categories. RCPL, which competes with HUL's Vim, Jyothy Lab's Exo and Pril in the dish wash category, has also introduced an ₹1 sachet of liquid gel in the category.
The business is known for upending industries into which it ventures, typically by offering huge discounts in the beginning. To scale the business, RCPL has chosen to "buy" rather than "build." It buys businesses and goods that are already well-known on the market. Given the restricted amount of shelf space, we do anticipate that distribution in kiranas will take some time. In addition to price, it is vital to consider other elements like quality, consistency, active marketing, etc.
Navigating the milky way
As per media reports, RCPL is planning to enter the dairy and frozen food market. The company will focus on value added products like yogurt, frozen dessert, ice cream, flavoured yogurt etc. in this category. According to a source, Reliance is looking at acquiring some companies in the dairy and value-added product category. Reliance Industries had earlier entered the market in 2007 but sold its dairy business to Heritage Foods in 2016.
Entry into staples and processed foods RCPL had announced the launch of its made-for-India consumer packaged goods brand 'Independence' in Gujarat in Dec-22. The company will be selling products ranging from staples to processed foods such as edible oils, pulses, grains, sugar, flour, biscuits, and other daily essentials.
How’s reliance able to do all of this? – Its Reverse sourcing
In addition to pharmaceuticals, food and beverage products, agricultural and non-agricultural produce, commodities, educational, raw, processed, and commercial items, RCPL plans to enter the complete spectrum of domestic, household, and consumer goods with an equal focus on backend sourcing. In a filing with the registrar of companies, the business claimed that by engaging in all agricultural and related activities, such as crop-raising and plantation, it will have a full play in backend sourcing.
Shuchi Nahar is a Certified Research Analyst. She can be found on Twitter at @shuchi_nahar
Note: This article is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related investment-related decision.