FMCG sector grows 4% in value, 3.8% by volume in April-June: Report

Industry growth steady and reflects resilience and adaptability, says consumer research firm NielsenIQ

India's fast-moving consumer goods sector grew 4 per cent by value in the April-June quarter compared to the same period last year and on the back of relaxed consumption patterns, according to consumer research firm NielsenIQ. Volume growth came in at 3.8 per cent.

Price growth stabilised in April-June at 0.2 per cent, underscoring a stable environment. Rural volume growth in the quarter stood at 5.2 per cent while urban was at 2.8 per cent. The two markets experienced softer consumption in the quarter ended June, said the firm in a press release.

In the January-March quarter, rural volume growth stood at 7.6 per cent and urban was at 5.7 per cent.

 

“The Indian FMCG industry growth has been steady, reflecting its resilience and adaptability. The sector experienced a 4 per cent value growth in Q2 2024 (April-June), attributed to relaxed consumption patterns. This deceleration in volumes is largely due to macroeconomic headwinds. While rural volume growth at +5.2 per cent continues to outpace the 2.8 per cent growth in urban areas, both regions experienced softer consumption this quarter,” said Roosevelt Dsouza, head of customer success – India at NielsenIQ.

FMCG consumption growth has been primarily impacted by the food sector, with growth at 2.4 per cent in the April-June quarter compared to 4.8 per cent in January-March and NielsenIQ noted that the moderation in volume growth is attributed to the staples categories- packaged salt, packaged atta (wheat flour) and palm oil.

In non-foods, volume growth stood at 7.6 per cent in the quarter ended June compared to 11.1 per cent in the quarter ended March.

“This downtrend in consumer demand for personal care and home care categories is observed in both urban and rural. In urban markets, personal care categories are witnessing a volume growth at 5.2 per cent in April-June (vs. 9.7 per cent in January-March), while in rural it is resting at 8.3 per cent in April-June (vs. 10.6 per cent in January-March),” said NielsenIQ.

In rural India, high contributing categories like laundry and utensils cleaners within homeware witnessed slow consumption.

Summer-specific categories like soft drinks, packaged drinking water, prickly heat powder and glucose powder saw a sharp uptick in the April-June quarter. Soft drinks grew two times faster than FMCG but saw some moderation sequentially.

“Within the broader FMCG industry, large players continue to demonstrate stronger performance compared to small, mid players, and giants. Small players face challenges in keeping prices stable, thereby impacting their volumes,” said NielsenIQ.