Consumer companies’ advertising spends nearing pre-Covid levels

Kolkata | Mumbai: India's largest consumer companies Hindustan Unilever, Amul, Britannia, ITC, LG, Marico, Emami, Parle Products and Dabur said their spending on advertising and promotion is reaching normalcy of pre-Covid levels with demand picking up and due to high number of new launches.
Most of these companies said they will hike their advertising spending in the second half of the fiscal and are going forward to continue demand generation now that several of them have also entered multiple new categories during the pandemic.

As per Nielsen, a record 9700 new products were rolled out during April-September period with most companies entering new categories like health and hygiene, home care and packaged food.

One of India’s largest advertiser, Hindustan Unilever (HUL), has increased advertising spending which also includes promotion on the rebranding of Glow & Lovely and brands acquired from GSK Consumer.

Similarly, Britannia has increased advertising spending on brands which had stock, SKUs and availability all across, while overall spending is getting close to normal. Brands like Amul, LG and Dabur said they are increasing their advertising spending over last year.

"I think it is the right time to continue to invest, and we are comfortable to invest to really drive demand generation," said Srinivas Phatak, chief financial officer at HUL.

“We are focusing on getting the right share of voice. And therefore, we have spent. And if I look at the December quarter, our objective would be to continue to invest further behind our brands," said Pathak, during a recent earning call.

Britannia MD Varun Berry said advertising and sales promotion spending, which was finally returning back to normal levels. He said spending had taken a backseat since there were not enough products to sell.

Berry said Britannia will focus on advertising on brands like Good Day, Marie and Milk Bikis, which are highly profitable and also right priced, during the earnings call.



ITC is going to sequentially increase its spending on advertising in the second half of the fiscal.

FMCG advertising spending is usually determined by their percentage to overall sales, which had gone down during the Covid disruption and subdued discretionary spends. However, demand has recovered for a lot of categories since August, marketers said.

Marico managing director, Saugata Gupta, said advertising spend at 9.5% of sales is almost back to pre-Covid levels. “We will continue to invest behind growth and market share in core and scale the new mass offerings in foods,” he said.

India’s largest appliance maker, LG India, had doubled its advertising spending for the just concluded festive season and is now finalising the budget for the period till March which would also see an increase, said vice president Vijay Babu.

The country’s largest dairy company, Amul managing director RS Sodhi said it was increasing advertising spending by 10-15% for this fiscal. “The spending mix which had shifted to digital and TV is now back to pre-Covid with print media getting back to normal,” he said.

The rapid expansion of consumer companies during Covid will also drive advertising.

Emami director Mohan Goenka said it has set in place an aggressive budget for the new launches, particularly in the second half of the fiscal that should increase the advertising spending by about 200-basis points.

Dabur CEO Mohit Malhotra said the company is now trying to get into categories which are much larger than where it was already prsent, as Covid has taught that it also has to pivot the business to categories which are larger and which will give the scale leverage.

"Therefore, we have to invest the upsides into advertising…So in terms of the long term, two to three years of horizon, we are wanting to invest in advertising,” he said.