India’s FMCG industry clocks 11% growth in March quarter on higher edible oil prices
India’s FMCG sector grew 11% in Q1, driven by 5.1% volume and 5.6% price growth, says NielsenIQ. Rural markets led with 8.4% volume rise, outpacing urban areas. High edible oil prices kept staples costly despite easing inflation. Consumers preferred smaller packs, and non-food segments outperformed food. Growth is expected to continue, supported by a good monsoon and tax reforms.
The Indian fast-moving consumer goods (FMCG) industry reported 11% year-on-year value growth in the March quarter, driven by a 5.1% volume increase and a 5.6% price hike, according to NielsenIQ. While overall inflation is easing, high edible oil prices are keeping the basket of staples expensive, resulting in higher value growth. But higher unit growth compared to volume growth suggests consumers are choosing smaller pack sizes.
“The FMCG sector is showing mixed signals—while volume growth is slowing across categories, non-food segments are still outpacing food. Inflation is easing overall, but high edible oil prices are keeping staples expensive,” said Roosevelt Dsouza, head of customer success, FMCG, NielsenIQ India.
Rural markets continue to drive growth, while metros continue to see a shift toward e-commerce, with higher shopper engagement. Dsouza said with a favourable monsoon forecast and revised tax slabs, consumption is likely to pick up in the upcoming quarters. Interestingly, small players are gaining ground owing to a low base and changing market dynamics, though their long-term momentum remains to be seen, he added. NIQ follows a January-to-December year.
Rural surges ahead
Although rural demand growth slowed slightly in the March quarter compared to the previous one, it still significantly outpaced urban demand, expanding four times faster.
Urban market growth decelerated in the March quarter. Rural markets saw an 8.4% volume increase, a slight dip from the December quarter. In contrast, urban market volume growth slumped to 2.6% year-on-year, declining both sequentially and annually. Across most of India, rural markets continued to perform better than their urban counterparts.
Large consumer goods companies, which act like proxies for household consumption, have shared similar views in recent earnings calls. Last week Hindustan Unilever Ltd (HUL) pointed to a recovery in rural markets. These markets have been “resilient and robust” over the last few quarters, Rohit Jawa, CEO and managing director, HUL, said after the company’s earnings call last week.
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Source : Mint
