As per reports, the FMCG industry is reaping the twin benefits of rising rural penetration and increased uptrading or premiumization in urban India. In urban India, rising disposable income and increased aspirational levels has led to the phenomenon of uptrading wherein after a threshold level of penetration, consumers move up the value chain rather than increase consumption. This trend of premiumization has been catalyzed by modern trade format and explosion of new launches and is particularly prevalent in personal-care and convenience food categories. Reportedly, sales contribution from modern retail format is a substantial 40% for breakfast cereal maker Kellogs India and over 10% for FMCG behemoth Hindustan Unilever. Not to be left behind, companies like ITC, Godrej Consumer Products, Marico and Britannia are increasingly focusing on this channel to increase sales. Market research agency, Nielsen has projected sales from modern retail format to triple to $ 5 bn by 2015 from the current $ 1.8 bn.
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