Companies pause packaged food price hikes as input costs stabilise
New Delhi: Makers of grocery staples such as snacks, biscuits and tea have paused price hikes after three back-to-back quarters of 5-10% increases across pack sizes, as key
commodity prices
like palm oil and wheat stabilise.
Executives at companies such as Britannia, Wipro Consumer,
Parle Products
and
Bikaji Foods
said they are pausing price increases. Some said they are also bringing back selective
consumer promotions
to boost sales even as urban demand remains under stress, their executives said.
"(While) we see no price reduction or grammage increase in the next couple of quarters, there will be no more price increases for sure," Varun Berry, managing director of
Britannia Industries
, told ET.
While the maker of Nutrichoice biscuits and Laughing Cow cheese did some strategic buying of wheat and flour, most of its commodities are priced at the same level as at the end of FY25, he said. "Flour is just slightly lower than the exit price of last year despite the wheat season," he added.
Deepak Agarwal, MD, Bikaji Foods, too, said the snacks firm would not increase prices as some inflation is under control and raw material costs are reducing. "Selective consumer offerings and promotions will be reintroduced to get better market share and momentum," he added.
Companies making daily essentials and grocery products had been increasing prices by 5-10% on higher raw material costs while maintaining that they withheld some of the cost pressures amid stagnating sales in cities. With
food inflation
expected to remain low, company executives expect their retail prices to remain steady.
"Core inflation will likely remain range-bound, led by weaker commodity prices, softer growth and a stronger rupee," HSBC Research said in a report released on Monday. This, it said, is a relief for consumers and "may fuel the purchasing power of households."
Anil Chugh, president, food business, at
Wipro Consumer Care
, said the overall food inflation is expected to remain in the region of 3-4% in the coming two quarters. "This is because of commodity prices stabilising, expected good monsoon and companies taking cautious approach to price increases," he said.
Wipro Consumer Care makes Nirapara ready-to-cook foods and Granamma snacks.
"For 3 quarters, prices were increasing," said Mayank Shah, vice president at Parle Products. "Now the hikes have been paused as some commodities are stable. Some key commodities are still higher than a year ago, but what's happened is that the rate of inflation has come down for now."
The food inflation rate dropped to 1.78% year-on-year in April 2025, compared to a year-on-year Consumer Food Price Index of 10.87% in October 2024, according to government data.
"Going forward, we expect tea pricing/ tea costs to soften rather than pricing going up (if the tea crop is normal). So, therefore, margins will come back," Sunil D'Souza, managing director,
Tata Consumer Products
, said in a quarter four post earnings call.
NielsenIQ in its January-March quarter update earlier this month had said the FMCG industry grew 11% year-on-year by value, driven by a 5.6% price hike.
Growth of packaged foods slowed to 4.9% in the January-March quarter compared to 6% in the fourth quarter of 2024, which the report attributed to declining lower volumes in edible oils and palm oil, impacted by higher prices.
The past three quarters had seen surging prices of wheat (which increased 17.4% year-on-year in the March quarter), palm oil (17.2%) and cocoa (78%).
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