Regional FMCG brands are scaling up rapidly to give even tougher competition to national brands after outpacing them to post double-digit sales growth in the past two quarters with inflation cooling off.

 

Rungta Tea, Balaji Wafers, Mario Rusk and Bovonto soft drinks are among regional brands expanding or diversifying and increasing brand visibility, having emerged stronger post pandemic disruptions.

 

Rungta Tea, which sells in Uttar Pradesh, Rajasthan and Bihar, among other markets, is setting up tea parlours similar to Chai Point and Chaayos and putting together an ecommerce team to scale presence.

 

"We are growing faster than many national brands in markets we are present in and have relationships with distributors and customers," Girjesh Rungta, managing director of Rungta Tea, told ET. "Now we are moving to the next level with tea parlours and ecommerce, while continuing with quality and innovation."

 

Kantar Worldpanel in a recent report said local brands grew 12.7% by volume between last April and this April, when national brands grew 8.2%. The consumer monitoring firm attributed this to innovation and increasing distribution of regional brands.

 

Rajkot-based snacking firm Balaji Wafers, which has been aggressively wooed by PepsiCo's Indra Nooyi and other large snacks giants, is setting up its first plant in North India, in Lucknow. "Our expansion plan is to go across India, well beyond Gujarat, one territory at a time," Chandubhai Virani, founder of Balaji, said. "We will continue to follow our value-for-money strategy."

 

Executives said the trend of regional giants going national is playing out across categories including snacks, tea, biscuits, detergents, soaps and toothpastes. "The key is ownership. We see regional brands primarily driven by founders who are directly involved in operations," said Sumit Agarwal, co-founder of Vitrak ExtendReach, a platform for traditional trade distribution. "That gives them the nimbleness and quick response time to market challenges."

 

They also have "razor-sharp focus on the category", he said. "Unlike, say, an HUL, these brands don't focus on different categories at the same time," Agarwal said. "Also, they operate with no frills - they are able to give enhanced value to the consumer." Bovonto soft drinks is laying out plans to take its products such as orange and ginger ale fizzy drinks, beyond its core markets in Tamil Nadu and Andhra Pradesh. Mario Rusk has roped in actor and singer Diljit Dosanjh as its first brand ambassador.