JOIN USPrice hike on products up to 7% across portfolios: Godrej
Packaged consumer goods company Godrej Consumer Products Limited (GCPL) recently forayed into the baby care products market by launching a premium range of certified products made from organic ingredients and zero toxins for baby skin under the brand ‘goodnessme’. The new product contains oil, soap, lotion among others and is categorised in the premium segment of products. It is quite the opposite of another recent launch of the GoodKnight Jumbo card for those in rural areas and urban poor. The company’s India and SAARC CEO Sunil Kataria talks to Veena Mani of DH about the company’s growth plans for the new baby care products that are available only online. Excerpts:
Organic products are generally more expensive than regular products. What is your plan for ‘Goodnessme’?
It is in the premium segment. It is priced at on an average two and a half times the same products you’ll find in the market. We are getting into a market that is less known in India. But the decision to price it like that is conscious. It might limit our customer base but it is a calculated risk we have taken. And, no, we will not focus just on the premium segment. We will invest more in the Jumbo Cards in the next six months. They are just priced at Rs 15 for 10 cards. We want to penetrate deep into the rural market and hence such a product. Also, with regard to Goodnessme, even though pricing will be on the higher side, we believe that people are beginning to understand the importance of organic stuff and are becoming more conscious of what they are using. We will be able to educate them and do well. Covid has made people more health-conscious. Plus, it is a baby care brand. People would want to give their baby the best. So that might help us.
Moving on to the consumer products segment on a broad basis. We have witnessed a lot of price hikes in products. What kind of price hikes do we see in your products?
Margin pressures are going to be there as raw material prices are at an all-time high. We are looking at cost optimisation within the company so that volumes don’t suffer. But yes, there have already been calibrated price hikes. We have had price hikes to the tune of 6 to 7% across portfolios. We do not know when this pricing pressure will change. We are looking at bringing down on the fixed overhead. It mostly has to do with global factors like crude prices etc. One of the biggest contributions to inflation is Palmolive and the biggest price hike would be in soaps.
What kind of revenues do you expect from this new brand?
We have not calculated the revenues yet. It will take us at least seven to eight months to know what kind of revenues it will generate for the company.
Why did you go in for a separate certification for ‘Goodnessme’ when the FDA already approves and certifies cosmetics in India?
The biggest problem in India is education. There are a lot of products in the country that claim to be organic but we do not know for sure whether they are. We took that extra step. It took us 18 months to get this certification. ECOCERT requires us to prove that the product does not have synthetic matter, genetically modified matter among other things. The certification can only be achieved after passing through stringent compliance processes including raw material testing, formulation approvals, even annual factory audits, including banning more than 1,300 ingredients deemed not fit for use for baby products as per European standards.
It’s no surprise, then, that the products don’t include any toxins, parabens, petroleum, phthalates, synthetic fragrance, mineral oil, or silicones, ensuring 100% transparency and re-establishing the promise of purity.
Certified organic products are made of ingredients that have been grown without any harmful chemicals, synthetic pesticides, or fertilisers – just how mother nature intended.
Goodnessme products also go through rigorous testing outside of the European standards and are hypoallergenic, dermatologically tested, paediatrician certified and vegan making them safe to protect the skin of babies.
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