India’s FMCG industry posted volume growth of 4.1 per cent in the September quarter over a year-ago period, with price growth being flat at 1.5 per cent. The industry’s value growth stood at 5.7 per cent, as per the latest estimates released by NielsenIQ.It said this reflected the industry’s “resilience” and a slight improvement in volume growth sequentially. Rural regions reported 2x faster volume growth ( 6 per cent) than urban regions (2.8 per cent) and surpassed urban areas for the third quarter in a row.
The industry’s volume growth was pegged at 3.4 per cent in the June quarter with price growth 0.1 per cent taking the value growth to 3.5 per cent.
Urban consumption increased to 2.8 per cent in the September quarter from 2.1 per cent in the June quarter, while rural growth increased to 6.0 per cent from 5.2 per cent. “Notably, rural areas continue to surpass urban areas in volume growth across most regions of India. In Q3 2024, both urban and rural markets showed a sequential recovery in consumer demand,” the insights and research firm added.
Roosevelt Dsouza, Head of Commercial – India at NielsenIQ, stated, “ The Indian FMCG industry shows resilience with steady value growth and marginal price increase. Rural volume growth at 6 per cent continues to surpass urban markets, despite softer consumption in both regions this quarter. Small manufacturers are rebounding after recent decline, while major players trail in value growth.”
Food category revival
The September quarter, which witnessed start of festival buying, signalled revival in food category volumes . Food consumption growth increased to 3.4 per cent in Q3 CY24 compared to 2.1 per cent in Q2 CY24. This uptick in volume growth is attributed to staple categories, including edible oils, packaged atta, and spices, despite consumers coping with food inflation.
Meanwhile, in home and personal care category consumption growth were marginally lower at 6 per cent in the September quarter compared to 6.7 per cent in the June quarter. However, NIQ said stabilisation in consumer demand for these categories was observed in both urban and rural regions. Over-the-counter categories like Rubefacient and Analgesics exhibited growth in value sales to 11.7 per cent in Q3 CY 24, backed by price growth.
Rural region volume growth in food ( 5.1 per cent ) and home and personal care (8.2 per cent) outpaced urban regions.
Channels
Kirana stores or traditional trade channels reported volume growth of 4.1 per cent in the September quarter, higher than the 3 per cent volume growth in the June quarter. Modern trade channel volume growth was pegged at 3.8 per cent in the September quarter but lower than the June quarter volume growth (6.8 per cent). “ Despite the slowdown , modern Trade channel managed to outpace urban growth (2.8 per cent),” NIQ added.
Large players
“Large players continue to demonstrate stronger performance compared to small, mid players, and giants. Small manufacturers recovered from consumption decline of last 3 quarters & grew faster than giants this is led by sharp recovery in volume growth in food for small players. Giants grow slowest in terms of value growth; and volume growth drops compared to June quarter,” NIQ added.
Giants signify companies with over ₹5m000 crore in value sales; large players are those with ₹1,000-₹5,000 crore in value sales, mid players have ₹100-₹1,000 crore in value sales, and small manufacturers are those with less than ₹100 crore in sales.