Shrinkflation haunts FMCG as war raises costs

Retail inflation rose from 2.75% in January 2026 to a 10-month high of 3.40% in March, driven largely by food prices.

- Neethi Lisa Rojan

Multinationals are already bracing for the fallout

(MINT)

Fast-moving consumer goods makers are leaning on a mix of price increases, smaller pack sizes and tighter cost controls to navigate raw-material volatility triggered by the ongoing US-Iran war, while still reporting robust volume growth for the March quarter. The ongoing war blew up end February this year, disrupting global supply chains.

Executives said calibrated pricing and 'shrinkflation' are helping them protect margins. The trend shows staples demand have held up, but also points to a gradual pass-through of higher input and packaging cost as geopolitical disruptions spike input prices.