Industry Context & Problem Statement: The Pervasive Threat of Raw Material Shortages

India’s consumer goods sector, spanning Fast-Moving Consumer Goods (FMCG), packaged foods, durables, and Direct-to-Consumer (D2C) brands, depends on a steady supply of raw materials like edible oils, plastics, paperboard, and chemicals. Raw material shortages disrupt production planning, trigger pricing volatility, and destabilise inventory cycles. For instance, shortages of edible oils, critical for packaged foods, or plastics for packaging, force companies to delay launches or adjust costs, impacting profitability.

Global supply chain fragmentation—driven by geopolitical tensions, trade disputes, and logistics bottlenecks—has intensified raw material shortages. India’s reliance on imports for materials like palm oil (70% imported) and specialty chemicals heightens vulnerability. Climate-linked agricultural volatility, such as erratic monsoons affecting crops like sugarcane and pulses, further complicates supply chains. While the Production-Linked Incentive (PLI) scheme promotes domestic manufacturing, it has limited immediate impact on raw material availability. High import duties, despite recent relief, continue to constrain sourcing, amplifying the challenge of raw material shortages.

Strategic Role of GTM in Mitigating Raw Material Shortages

A resilient GTM strategy enables consumer goods companies to navigate raw material shortages, avoid launch delays, and maintain customer confidence. Agile launch sequencing prioritises high-margin SKUs, allocating scarce raw materials to products with the greatest revenue potential. For example, a personal care brand facing a surfactant shortage might focus on premium shampoos for urban markets, delaying lower-margin variants.

Inventory buffering and vendor diversification are critical GTM components. Maintaining strategic stock reserves and engaging multiple suppliers reduce reliance on single sources, mitigating risks from raw material shortages. Smart bundling strategies—such as pairing high-demand products with slower-moving SKUs—and dynamic pricing help absorb cost increases without fully passing them to consumers, preserving affordability and demand.

1. Recent Trends (As of June 2025)

Several developments in 2025 are reshaping how consumer goods players address raw material shortages. Budget 2025 introduced import duty relief on critical FMCG raw materials like edible oils and packaging polymers, easing procurement costs. The GST Council’s rationalisation of tax rates on semi-processed goods has streamlined sourcing, improving cost-effectiveness for manufacturers.

AI-driven dynamic raw material forecasting is gaining traction, enabling companies to predict shortages and adjust production proactively. Additionally, the rise of nearshoring and local sourcing is reducing dependence on global supply chains. FMCG brands are partnering with regional agricultural clusters and MSMEs to secure raw materials like jaggery, spices, and biodegradable packaging, bolstering resilience against Supply shortages.

2. Key Challenges for GTM Amidst Raw Material Shortages

Raw material shortages create significant GTM challenges, including:

• Stockouts During Campaigns: Shortages during festive seasons like Diwali lead to lost sales and consumer frustration, damaging brand credibility.
• Misaligned Marketing Calendars: Promoting products unavailable due to Supply shortages wastes ad spend and erodes trust.
• Distributor Skepticism: Unpredictable product availability discourages distributors from stocking new SKUs, complicating market penetration.
• Increased Ad Spends: Delayed or partial inventory launches require re-advertising, escalating costs without guaranteed returns.

3. Hybrid Consulting Strategy to Build a Resilient GTM Framework

A multi-disciplinary approach integrating management, finance, legal, and technology expertise helps consumer goods companies overcome raw material shortages.

• GTM Strategy

1. Prioritise Core SKUs: Focus on products with secure supply chains to protect revenue streams. For example, a beverage brand might prioritise bottled water over flavoured drinks during a sugar shortage.
2. Deploy D2C Pilots: Launch controlled D2C campaigns to manage limited inventory and test market fit, leveraging e-commerce platforms for scalability.
3. Use Vernacular Segmentation: Target regions with stable raw material access for phased launches, customising campaigns to local preferences.

• Financial & Legal

1. Dynamic Pricing Clauses: Incorporate flexible pricing in vendor and retailer contracts to manage cost fluctuations from Supply shortages.
2. Protect Brand Equity: Use selective promotions, like loyalty schemes, instead of mass discounts to maintain value during shortages.

• Technology

1. Demand-Sensing AI + ERP Integration: AI predicts demand fluctuations, while ERP systems provide real-time raw material inventory visibility, enabling proactive GTM adjustments.
2. Control Towers: Centralised platforms synchronise marketing, logistics, and sourcing, ensuring swift responses to raw material shortages.

• Operations

1. Alternate Vendor Readiness: Build relationships with secondary suppliers to pivot during disruptions.
2. Last-Mile Partnerships: Collaborate with regional distributors for phased rollouts, aligning product availability with campaign timelines.

Illustrative Examples

• Tiered GTM Rollout:

A home care FMCG brand facing a surfactant shortage launched high-margin SKUs in metro markets while running “out of stock” educational campaigns in Tier-2 cities. By synchronising GTM and procurement, the brand avoided over-promising, maintaining distributor and consumer trust despite raw material shortages.

• Local Sourcing Pivot:

A D2C packaged food brand countered a jaggery shortage by securing alternative suppliers through a government-backed agricultural cluster programme. It delayed a regional launch, using WhatsApp-based pre-orders to retain consumer interest, demonstrating agility and digital engagement in response to Supply shortages.

Conclusion

Raw material shortages pose a persistent challenge, but consumer goods companies can thrive by adopting a data-driven, legally robust, and operationally agile GTM strategy. This approach aligns marketing, procurement, and distribution to mitigate disruptions, protect brand equity, and maintain customer trust. By prioritising resilient supply chains, leveraging technology, and fostering strategic partnerships, leaders can navigate the volatility of raw material shortages and ensure long-term market success.

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