Google News
spot_img

FMCG industry sees 6.5% volume growth in Mar qtr, rural surpass urban consumption: NielsenIQ

Must Read

The FMCG industry has experienced a 6.6% growth in value

New Delhi: The Indian FMCG industry experienced a 6.5% growth in volume terms at a national level in the January-March period of 2024, with rural consumption surpassing urban for the first time in five quarters, according to consumer intelligence firm NielsenIQ.

Both food and non-food sectors contributed to the growth in consumption in the first quarter of 2024, but non-food saw almost double the growth as compared to food, NielsenIQ (NIQ) said in its quarterly snapshot for Q1 2024.

The FMCG industry has experienced a 6.6% growth in value, attributed to a 6.5% increase in volume at an all-India level. The volume growth for this quarter was higher than Q1 2023, which stood at 3.1%, it added.

NIQ Head of Customer Success India, Roosevelt Dsouza said, “The FMCG industry’s growth continues to be driven by consumption trends in Q12024 with rural areas surpassing urban growth for the first time in five quarters.”

Notably, Dsouza said home and personal care (HPC) categories have outperformed food categories. While food categories witness higher unit purchases, the growth in HPC is largely driven by the popularity of larger pack sizes.

The quarterly snapshot pointed out that there is a consumption slowdown in urban and modern trade, while there is an uptick in rural and traditional trade.

“Rural consumption growth has gradually picked up pace and has surpassed urban (growth) in Q12024. Urban sees sequential decline in consumer demand leading to 5.7% this quarter,” NIQ said.

Within the retail sector, modern trade continues to exhibit strong double-digit volume growth at 14.7%. Traditional trade, on the other hand, experienced stable growth, with volumes registering 5.6% growth in Q1 2024, compared to 5.3% in the previous quarter (Q4 2023), suggesting that traditional retail channels are holding their ground, it added.

According to the snapshot, at a pan India level, both food and non-food sectors contributed to the growth in consumption but non-food saw almost double the growth as compared to food.

“More units were purchased in food categories compared to the same period last year, whereas in non-food, more large packs were bought,” it said.

In Q1 2024, the volume growth in the food sector was 4.8%  compared to Q1 2023, down from 5.3% in Q4 2023. This slowdown in growth is primarily due to products falling under staples.

In contrast, non-food categories, there is an improvement, with consumption reaching 11.1 % in Q1 2024 compared to last year, an increase from the 9.6% recorded in Q4 2023.

“This improvement can be attributed to an increase in rural uptick, with a growth rate of 12.8 % in Q1 2024 (versus 9.8% in Q4 2023); led by personal care & home care categories,” it said.

In urban areas, the non-food sector is witnessing increasing consumption in personal care growing at 8.4% in Q1 2024, as against 5.8% in Q4 2023.

NIQ pointed out that within the FMCG industry large players continue to demonstrate stronger performance compared to small players. However, smaller manufacturers have seen higher volume growth rates in non-food categories over the last two quarters compared to large companies.

“This might be because smaller players face challenges in keeping prices stable in the food sector, while non-food categories, with significant price increases, have experienced higher volume growth,” it said.

Latest News

Tax relief for middle-class, salaried will help increase consumption patterns: Marico MD

The key expectations from the full budget of 2024-25 include a continued emphasis on rural development through investments in...