Soaps to biscuits to cost more as oil, wheat turn dear

Your next pack of cookies could be lighter than the one you got for the same price last time.

- Suneera Tandon

Welcome back to shrinkflation, where manufacturers reduce pack sizes to make up for costlier ingredients. Alongside, direct price hikes are taking effect too.

Packaged consumer goods makers Britannia Industries Ltd, Parle Products Pvt. Ltd, ITC Ltd and Godrej Industries Ltd are working on reducing pack sizes—grammage in industry parlance—or nudging up prices. As key raw materials such as wheat and oil cost more, prices of biscuits, cakes, soaps and packaged staples are expected to rise as much as 7% in the coming quarters, industry executives said.

"Commodity prices are on the boil," said Rajneet Singh Kohli, chief executive officer of Britannia Industries, referring to costlier flour and cocoa. Palm oil is now 40% costlier from a year ago, Kohli said, thanks in part to the recent 20% import duty on edible oils. Britannia, which sells bread, biscuits and cheese products, will raise prices by 3-5% across the next two quarters, Kohli said.

"It will not cover the entire inflation, but we will take cost efficiency measures at our end to ensure that we don't pass on the entire thing to consumers," Kohli said on the sidelines of an industry event last week. He said the company will most likely cut grammage than make direct price hikes.