Procter & Gamble Hygiene and Health Care Ltd on Wednesday said it is witnessing emergence of “positive consumption trends” in both rural and urban regions on the back of softening of inflationary pressures and above normal monsoons. The company said that while rural wages and unemployment levels will be key monitorables but expects these to stabilise in the near term due to government interventions.
Procter & Gamble Hygiene and Health Care sells Whisper, Vicks and Old Spice. In India, P&G is represented by four entities which include P&G Hygiene and Health Care, Gillette India, P&G Home Products and P&G Health.
Declining rural wages
On an investor call, Mrinalini Srinivasan, CFO, Procter & Gamble Hygiene and Health Care Ltd said, “In the FMCG industry, positive trends are finally emerging in consumption, both rural and urban... Inflation has been consistently softening... Monsoon across 75 per cent of the country’s districts has been either normal or above normal, and rural demand is expected to keep up with these positive trends. The watch-out though is declining rural wages and rising unemployment, both of which should stabilise in the near term with government’s recently announced interventions.”
The FMCG major said that while it anticipates some challenges in the near term, it remains confident that it will navigate these difficulties to drive “sustained business results.”
In the June quarter, the FMCG industry reported about 4 per cent volume growth and is expected to end 2024 at mid-single digit growth.
Stating that consumption remains underdeveloped in several categories, Srinivasan added that the company sees strong potential in driving category growth to meet the evolving consumer needs and aspirations by “doubling down on the company’s integrated growth strategy.”
Talking about the company’s focus on Supply 3.0 initiatives, V Kumar, MD, Procter & Gamble Hygiene and Health Care Ltd, and CEO, P&G India said the company is seamlessly leveraging on data, analytics, automation and Artificial Intelligence technology to enable speed and effectiveness in manufacturing processes and operations and make its products available to consumers swiftly. a
Feminine care segment is leading the growth for PGHH and contributes nearly 70 per cent to its revenues. “We are the market leaders in the feminine care category which now stands at ₹3,400 crore. We expect double-digit growth to continue over the next three years for the category,” said Srinivasan.
Quick commerce
The FMCG major said that it has grown its distribution reach by “more than 1.5x times” over the last three years. It is also betting big on quick commerce channel which is expanding to new locations. “While currently a small channel, quick commerce for us is more than doubling year-on-year,” she said while adding that the channel’s growth is driven by consumers increasingly seeking convenience.
In a separate investor call for Gillette India Ltd, the company’s management said that growth in oral care segment, which consists of Oral B toothbrushes, has been “slow” due to intense competition in the entry tier segment but it has continued to “maintain” its “business size in the category” despite these challenges.