Your Rs 10 Products Are Quietly Getting Smaller

If your favourite Rs 10 products feel smaller lately, consumer companies may now be explaining why.

India's fast-moving consumer goods makers are shrinking the size of low-priced packs instead of increasing headline prices as inflation pressures return and packaging costs rise, according to comments by Dabur India Chief Executive Officer Mohit Malhotra during the company's quarterly earnings call.

"All the Rs 10, Rs 20 packs we are reducing grammage," Malhotra said. "We can't breach those price points."

The comments offer a view into how India's consumer goods companies are responding to inflation without directly increasing prices on products sold in small neighbourhood stores and mass-market retail channels.

Small packs priced at Rs 10 and Rs 20 remain important for products such as shampoos, toothpaste, juices and daily-use grocery items, especially in price-sensitive urban and rural markets. Companies often avoid visible price increases on these packs because consumers react faster to higher printed prices than to small reductions in quantity.

Inflation Pressure

Dabur said inflation across several categories has increased after crude-linked packaging and raw material costs moved higher following geopolitical tensions in the Middle East. Malhotra said the company had already announced about 4% price increases across parts of its business to offset rising costs. But smaller packs remain harder to reprice.

"Input costs are increasing," he said later in the call. "To offset that input cost increase, we will be doing price increases... and the smaller packs where we can't do price increases at INR10, INR20, there we'll be doing shrinkflation, we'll be shrinking our pack."

The company said packaging accounts for roughly one-third of its raw material and packaging basket, with crude-linked costs rising alongside higher global oil prices.

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The Rs 10 Psychology

Dabur's comments also point to the importance of psychological price points in India's consumer economy. Malhotra said the company preferred reducing quantity over crossing fixed low-price thresholds that consumers track closely during periods of inflation.

The strategy has become common across India's consumer goods industry during periods of rising input costs. Companies typically reduce pack sizes, trim weight or change product dimensions instead of raising prices on low-unit packs that drive high-volume sales.

Dabur said low-unit-price packs contribute about 30% of its business and are expected to grow further as the company expands in rural markets. The company added that inflationary pressures had increased sharply after initially expecting raw material prices to remain stable this year.

"We see an inflation of roughly around 10% hitting us in a lot of portfolios," Malhotra said during the earnings call.

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