‘Top 15-20% of consumers driving growth energy’

Sudhir Sitapati, MD & CEO, Godrej Consumer (GCPL), says there is cautious optimism among FMCG players, driven by GST 2.0 price reductions, rural demand anda gradual urban recovery.

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Sitapati, also the chairman of the CII National Committee on EMCG, speaks with Viveat Susan Pinto on the sidelines of the CILFMCG Summit on the company’s premiumisation agenda, acquisitions and big bets. Excerpts:

How do you read the current environment three months after the GST 2.0 reforms were introduced? What explains the mixed urban demand trends despite the price cuts?

It has actually been about two months since the GST price reductions kicked in, so it is still early to draw definitive conclusions. Pipeline movements can distort short-term performance, and September was a weak month for most FMCG companies. That said, in principle, GST cuts should support consumption. We saw a similar impact in 2017 after GST was first introduced, and are hopeful of a repeat. As far as urban demand goes, it was slower even prior to the GST price reductions. And yes, it does remain mixed, although certain segments such as quick commerce are growing rapidly. Overall, we expect urban demand to gradually strengthen over the next few quarters. Rural demand, of course, remains robust.

What are the building blocks for GCPL now that the FMCG market is on the growth path?