The fifth 'P' in FMCG: How politics shapes what we consume

In the realm of consumer business, the four P's of marketing—price, place, promotion, and product—take center stage. However, amidst these, there's a silent influencer that plays a pivotal role in shaping our consumption landscape: politics. The Sitapati Brothers, with Sudhir's vast experience in FMCG and Vinay's expertise in politics, delve into the intricate dance between political landscapes and consumer behaviour.

With three bestselling books between them, the brothers explore the often-overlooked connection between political regimes, policies, and elections on what we choose to buy. As the nation gears up for numerous state elections and the impending central election, understanding this dynamic becomes crucial.

Sudhir Sitapati, reflecting on India's consumption evolution, notes key turning points. The boom in the FMCG industry from 1991 to 2000 was propelled by supply chain advancements and industrial deregulation. However, an intriguing slowdown occurred between the late '90s and 2005, correlating with increased GDP growth as consumer preferences shifted. Subsequent broad-based growth, influenced by initiatives like MNREGA, marked another phase. Currently, a trend of premiumisation is shaping consumer choices.

As we navigate the complex interplay between politics and FMCG, Sudhir Sitapati's insights beckon us to pay attention, emphasising that the fifth P—politics—profoundly impacts the other four, dictating what products reach us, how they are priced, where they are available, and the promotional strategies employed.

Vinay emphasised that the trend of premiumisation is closely tied to the reduced intervention of the state. The nature of state spending, whether it's directed towards capital expenditure or revenue expenditure, significantly influences consumer behaviour.

The foundational belief in 1947 was that India, perceived as backward with its villages, required a robust state to propel it into modernity. However, following the ideological shift post-1990, advocated by figures like Manmohan Singh, Narasimha Rao, Deve Gowda, and Narendra Modi, there has been a consensus that the state should play a supportive role rather than being the primary actor in the economy. This shift, according to Vinay, has played a pivotal role in driving the trend of premiumisation in the market.