Rural Sales Of FMCG Products

Company's rural business growth outpaced urban in Q3

Excluding branded commodities, sales up 7% in Oct: Bizom data

Kirana stores in rural areas stocked up in preparation for the festival season, which began in September

Rural sales grew at a faster rate due to a higher focus on increasing its rural distribution network

Month-on-month sales growth numbers for July were lower mainly on account of a significant drop in beverage sales

Urban demand also hit, but not as badly; Overall FMCG sales decline 15.3% MoM and 2.7% YoY

The FMCG industry expects an improvement in its margins and hopes to make a comeback from the rural market from the third quarter, though it witnessed pressure on volume in the September quarter as high inflation persists. Makers of fast moving consumer goods (FMCG) are now seeing green shoots of recovery with the onset of the festive season and a good monsoon and crop harvest in the rural areas. In the July-September quarter, listed FMCG companies, including HUL, ITC, Dabur, Nestle, Tata Consumer, Britannia and Marico, reported pressure on their margins on similar lines as the preceding quarter and said the demand environment remained challenging with inflation impacting consumption. However, as the commodity prices of palm, khopra etc have softened, FMCG companies expect a sequential improvement in their gross margins and mid-single-digit volume growth. In the September quarter, FMCG companies reported a price-led growth in their top line. While in some segments, FMCG makers such

Bizom pointed out that rural sales were impacted in September due to excessive rainfall in some areas and weak rainfall in some other regions, thereby affecting agri yields and household incomes

Sales of goods from shampoos to biscuits stayed lower due to inflationary pressures on commodities

Key reasons: Inflation, Omicron fears, uneven rainfall hurting crop production

Emami is also progressing with its focussed rural expansion drive under 'Project Khoj' initially targeting top four potential rural contributing states -- Uttar Pradesh, Bihar, Maharashtra and Andhra

During unlock, most consumer goods makers, including durables majors, turned their attention to small towns and rural areas

Nestle India's aggressive shift to the hinterlands points to the growth that beckons in these areas; Britannia and Parle have already got there

Sale of FMCG items in rural India - home to over two-thirds of the country's population is now growing at 28 per cent higher than urban areas

Higher disposable income, price cuts to aid volume growth; Unilever, Dabur, Colgate, Emami among those to benefit more