Walk into almost any kirana store in India, and you’ll still find them: long, colourful garlands of sachets, shampoo, detergent, drink mix, fairness cream, swinging gently in the breeze, promising convenience, dignity, and access. Each of them, a micro-transaction of trust. And each of them, quietly breaking under the pressure of inflation.
Over the last four decades, these magic price-point packets, Re 1, Rs 2, Rs 5, Rs 10, became the bedrock of India’s FMCG sector. In 2021 alone, Indians bought nearly 41 billion shampoo sachets, 99% of which were in small-format packs. Shampoos, biscuits, instant drinks, detergents, entire categories have grown fat on wafer-thin margins and billion-unit scale.
But as raw material and packaging costs skyrocket, the economics are becoming untenable.
Palm oil is up 30%. Milk and wheat prices have climbed more than 20%. Multi-layer plastic packaging is more expensive than ever. Yet the pricing of sachets hasn’t moved, largely because it can’t. A Re 1 sachet can’t become Rs 2 without risking a consumer drop-off.
According to the Consumer Price Index (CPI), India’s inflation rate has significantly moderated from recent highs, dropping to 3.16% YoY in April 2025, the lowest since July 2019, driven by declining food inflation (1.78%) and improved supply chains. This contrasts with the 2022 peak of 6.70% caused by pandemic disruptions and global energy shocks23, now stabilising below the Reserve Bank’s 4% target through coordinated monetary tightening and agricultural reforms
So what do they do? They shrink the pack.
A Rs 5 biscuit that once gave 100 grams now delivers just 55g. A Rs 1 shampoo sachet may barely wash short hair, Madhav Kasturia, founder and CEO of Zippee, explained over a post on LinkedIn. Drink mix powders yield thinner cups. This trade-off allows companies to stay within key price bands, but not without long-term implications for consumer trust. This phenomenon, in simple economics, is called shrinkflation. “It’s a war between unit economics and consumer trust,” Kasturia said “You can’t just raise prices. You risk breaking the relationship.”
Kasturia calls low-unit packs “sacrosanct.” He’s not exaggerating. These LUPs (low-unit packs) still drive 25–35% of FMCG revenue in India. They’re what gets a product into the hands of the first-time buyer. A Rs 5 Parle-G packet isn’t a margin play; it’s a market entry strategy.
This consumer-first pricing was never about profitability. It was always about building a habit, one cup, one wash, one hunger break at a time. And it worked. But now, with brands “at the edge,” according to HUL’s own CFO, companies are forced to rewire how sachets are priced, sold, and perceived.
Brands are responding with a series of micro-innovations, such as launching products at Rs 7, Rs 8 and Rs 16 in order to ease the consumer into not realising the inflationary hit. Some are encouraging consumers to upgrade to Rs 10 or Rs 20 packs with better per-use economics or bundling offers like “buy 12 sachets for Rs 10” to maintain price optics. FMCG brands are also keeping the Rs 1 and Rs 2 SKUs alive, sometimes even incurring a loss, because losing the low-end customer is costlier than subsidising them. “You don’t scale with your most profitable customer. You scale by not losing the one who gives you Rs 1 with full faith.” Kasturia added.
This is particularly crucial because sachets are not just about affordability, they are about access, especially in rural and semi-urban markets. In categories like shampoo, sachets account for 70–75% of all units sold, and an estimated 99% of shampoo transactions are in small-format packs.
India’s 12 million kirana stores, the primary distribution network for these products, make this possible. Their hyperlocal reach, low operating costs, and deep consumer understanding allow brands to sell billions of sachets with limited overhead.
Even as e-commerce and Q-commerce platforms grow in urban markets, the sachet economy has shown resilience. BrandPulse Global research suggests that modern formats will not replace kiranas; they will coexist, serving different consumer segments.
Moreover, current consumer behaviour supports the sachet model. Indians are making more frequent grocery trips (142 annually, up from 135 pre-pandemic), but buying smaller quantities (966g vs 1033g per trip). This reflects careful budgeting and a preference for low-unit purchases.
The beauty, and irony, of the sachet economy is this: it’s not built on premiumisation, subscriptions, or loyalty programs. It’s built on single-use portions, sold consistently, through hyper-local relationships. FMCG giants may dream of pushing consumers up the value ladder. But sachets are the reality check.
And if they lose that Re 1 customer? They risk losing the very foundation they were built on.