Arjun Ranga, president of the All India Agarbathi Manufacturers Association (AIAMA), said before the pandemic, prayer timings in a household were generally fixed. But after the lockdown was lifted and supply chain constraints eased, prayer timings changed with household members lighting incense sticks at different times of the day as they were still working from home. “Multiple usage of agarbattis has now reduced, with the overall industry growing annually at 5-6%,” said Ranga.
Ranga said post-pandemic, there was also panic buying of agarbattis because it’s not an essential commodity, and this added to the demand surge. “Given that the category has almost 80% penetration across the country, the current growth of 5-6% is good,” he said.
Mysore Deep Perfumery House (MDPH) managing partner Ankit Agrawal said, “After the first wave of the pandemic, the agarbatti industry witnessed around 30% surge in demand. People were working from home then and this gave them enough time to light up an agarbatti to the almighty.”
However, individual brands are said to be performing better than the market growth. ITC’s chief executive (agarbattis & matches business) Gaurav Tayal said, while the overall market may have slowed down to some extent thereof, Mangaldeep – ITC’s flagship brand in the incense sticks category — has a CAGR of 12% in the last two years, that is, 2x the category growth.
“During the lockdown period, when consumers were unable to visit temples due to the shutdowns, Mangaldeep, through its devotional app, bought the divinity of the temple home, through its ‘Live Puja’ module during various festivals,” said Tayal.
The space of wellness ingredients, while currently niche, is also said to be picking up. Agrawal said the pandemic has changed consumer behaviour and even in agarbattis, there is a shift towards products that offer medical benefits. “Although regular fragrances such as rose and sandalwood continue to remain best sellers, there is growing demand for new fragrances like pineapple, green apple and musk melon. Just like fashion industry, we too are constantly innovating our product offerings,” said Agrawal. ITC’s Tayal said since there was a need for purification of homes during Covid, Mangaldeep launched its UpaVeda range, which has ingredients like camphor and tulsi. Like other industries, the agarbatti industry also is impacted by inflation, mainly in fragrance costs, packaging material and freight rates across the value chain. Category players are engineering innovative ways to mitigate the increase in input cost. ITC says it mitigated the unprecedented increase in prices of key inputs through focused cost management interventions across the value chain, premiumisation, product mix enrichment and judicious pricing actions.
MDPH’s Agrawal said the company cannot raise prices because demand has reduced. “We expect the demand to pick up during the festive season,” he added.
The total agarbatti industry, including the large unorganised segment, is said to be of the order of Rs 10,000-12,000 crore. Besides Mangaldeep, the other top branded players are Cycle Pure and MDPH’s Zedblack.