While these new age companies presently account for only 3% of total revenue, given targeted white spaces their share could reach 8-10% in the next few years, which can potentially slice off 100-200bps of growth for incumbents. For new age brands with critical scale in terms of income levels, ease of distribution, and funding, a flywheel effect is in motion. While the majority of these individual brands will likely not scale beyond a certain point, a long tail of brands will emerge. In comparison to other sectors, the FMCG sector has historically been more resilient to external challenges, leading to strong earnings (12.5% CAGR) and valuation rerating (2x) in the last two decades. Earnings traction was steady, driven by (1) share gains from regional/small players, (2) distribution expansion (particularly in rural areas), (3) consistent success with brand extensions, (4) high brand recall to drive premiumisation, and (5) outsourcing to help deploy funds to increase competitiveness. Top-tier mainstream companies have had a smooth ride, boosting investor confidence in earnings visibility. However, in the evolving competitive landscape, we remain sceptical about sustaining these drivers/assumptions. D2C/New age consumer brands are far more disruptive/ agile than traditional/regional competition. Established incumbents are no longer protected by entry barriers (distribution and brand), resulting in a level playing field and category fragmentation - a structural trend.