The FMCG market growth rate is expected to improve next fiscal year, according to Sudhir Sitapati, Managing Director and Chief Executive Officer of Godrej Consumer Products. This improvement will be led by a rebound in value growth, which was impacted this fiscal year due to a steep fall in commodity prices.
This year, the increase in volume has outpaced the increase in value, as most FMCG product prices have declined, according to the manufacturers of Good Knight mosquito repellent and Cinthol soaps.
Sitapati mentioned that commodity prices are currently stable to slightly positive, whereas wage inflation is on the rise. This will result in product prices being slightly higher than before in the coming quarters, ultimately contributing to a high single-digit value growth for the industry this calendar year.
Continue Exploring: NielsenIQ forecasts 4.5-6.5% growth for FMCG sector in FY24; volume surges by 6.4% in Q4 2023 as urban-rural gap narrows
“The water has found its own level as far as commodity prices. Unless there is a big geo-political factor, prices of palm oil and crude which are the biggest inputs for FMCG are expected to remain stable in 2024. This will improve overall industry growth rates next fiscal,” he said.
Godrej, the market leader in hair color in India and globally, boasts a complete portfolio in the hair care range. Sitapati mentioned that the company is evaluating options to expand its presence in the domestic market in this segment with newer categories like hair conditioners, treatment, and straighteners.
He mentioned that the company is currently gauging the market as it already offers these products through the salon channel under the brand name Godrej Professional. Depending on their success, a separate lineup may be introduced in retail stores. However, the company is not particularly interested in crowded categories such as shampoos and hair oils.
Continue Exploring: FMCG firms optimistic about rural recovery amid macroeconomic improvements
“Globally, we have a big hair care portfolio accounting for almost a third of our consolidated business. There are no definitive plans yet to launch those in India, but the potential remains,” said Sitapati.
The hair care market in India is valued at around INR 35,000 crore, encompassing products like shampoos, conditioners, hair colors, hair oils, and straighteners.
In its December quarter earnings, Godrej announced that India volumes grew by 12%, while revenue surged by 9%. However, despite this growth, revenue continued to trail volume expansion, primarily due to price declines in personal wash products. The company, positioned as the second-largest soap manufacturer, had previously raised prices of most soap packs by up to 25% during the peak of inflation in 2022. Yet, it has now opted to slash prices by up to 20%.
