FMCG industry’s volume growth was down to 3.8 per cent year-on-year in the June quarter compared to 6.5 per cent in the March quarter, as per the latest data released by NielsenIQ.

The research and insights firm said this consumption slowdown was led by the foods sector and was also due to the impact of macro-economic factors. Rural volume growth was pegged at 5.2 per cent y-o-y, continuing to outpace urban volume growth (2.8 per cent).

However, both rural and urban regions reported softer consumption trends compared to the March quarter.

The drop in volume growth of the FMCG sector is not just sequentially. Even in the June quarter in 2023, the industry had posted higher volume growth at 7.5 per cent

Roosevelt Dsouza, Head of Customer Success-India at NIQ, said, “The Indian FMCG industry growth has been steady, reflecting its resilience and adaptability. The sector experienced a 4 per cent value growth in Q2 CY2024 , 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.” Price growth stabilized at a modest 0.2 per cent, underscoring a stable market environment, NIQ noted.

Urban volume growth dipped to 2.8 per cent in June quarter from 5.7 per cent in March quarter while rural volume growth was down to 5.2 per cent from 7.6 per cent in the previous quarter.

The slowdown in FMCG consumption was largely due to the dip seen in food segment volume growth to 2.4 per cent in June quarter year-on-year ( vs 4.8 per cent in March quarter).

This moderation in volume growth is attributed to staple categories including packaged salt, packaged atta, and palm oil, NIQ’s report added.

In Non-food categories, the volume growth stood at 7.6 per cent in June quarter year-on-year, which was a drop from 11.1 per cent in March quarter.

“This downtrend in consumer demand for Personal Care & Home Care categories is observed in both Urban and Rural markets. In Urban markets, Personal Care categories are witnessing a volume growth at 5.2 per cent in Q2 CY2024 (vs. 9.7 per cent in Q1’24), while in Rural it is resting at 8.3 per cent in Q2 CY2024 (vs. 10.6 per cent in Q1’24),” NIQ added. It also said that in rural regions, high contributing categories laundry and utensil cleaners within homecare witnessed slower consumption.

Meanwhile, summer-centric categories such as soft drinks, packaged drinking water, prickly heat powder, and glucose powder saw an uptick in June quarter over a year ago. Soft drinks grew two times the overall FMCG growth in April-June period but moderated sequentially.

Modern Trade store channel continued to grow at double digits at 10.9 per although slower than March quarter. But general trade volume growth slowed down to 3.1 per cent in June quarter compared to the previous quarter, NIQ’s report noted.

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