- FMCG firms like HUL and Dabur adopt shrinkflation amid rising input costs
- Dabur cut Vatika hair oil sachet size from 4 ml to 3.8 ml at Re 1 price
- HUL reduced Pears soap size from 60 grams to 57 grams, price unchanged
Amid persistent input cost pressures, FMCG majors such as HUL and Dabur are adopting "shrinkflation" strategies after implementing price increases. By reducing product grammage while keeping prices unchanged, companies aim to offset rising costs while limiting the impact on consumer demand.
Recent distributor data shows that Dabur reduced the quantity of its Vatika hair oil sachet sold at Re 1 from 4 ml to 3.8 ml. Similarly, HUL has reduced the grammage of its Pears soap priced at Rs 20 from 60 grams to 57 grams.
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The combination of price hikes and grammage reductions highlights the growing pressure on FMCG companies as they navigate a challenging cost environment. With commodity inflation remaining elevated, consumers may continue to witness further pricing actions and pack-size adjustments across everyday household products in the coming months.
In April, prices of key brands such as Liril, Pears and Dove had been increased by Rs 2-3 per 100 grams, translating into hikes of 3-5% across variants. Liril's 100 g bar now costs Rs 41, up 5.13%, while Pears has been raised 4% to Rs 52.
Dove Serum (white) has seen a 3.45% increase to Rs 60, while Dove Pink has recorded the steepest hike of 4.48%, taking the price to Rs 70 per 100 g.
The main reason behind a sharp rise in input costs, particularly palm fatty acid distillate (PFAD), a key soap-making raw material. PFAD prices have surged in recent months due to supply tightness and higher palm oil volatility.
At the same time, chemical input costs have climbed following geopolitical tensions in the Middle East, disrupting supply chains and pushing up freight and energy expenses.
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Packaging costs have added to the pressure, with prices for paper, plastics and laminates jumping between 15% and 50%, according to industry estimates.
Dabur and HUL had indicated in their Q4 earnings of a potential price increase and grammage adjustment.
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