Fueled by a remarkable 7.5% surge in consumption growth, the FMCG sector experienced a substantial 12.2% increase in value during the June quarter, marking the highest growth rate observed in the past eight quarters.
The growth exceeds the previous quarter by 2 percentage points and surpasses the corresponding period from the previous year by 1.3 percentage points, as indicated by NIQ’s (formerly NielsenIQ) FMCG overview. During the quarter, volume growth of 7.5% has outpaced price growth of 4.4%. In the preceding March quarter, volume growth was merely half (3.1%) of the price growth (6.9%).
The rural market’s growth rate surged to 4% during the June quarter, a significant improvement compared to the 0.3% growth recorded in the March quarter. Before this, the rural market had been experiencing a decline. Urban markets, on the other hand, maintain a faster growth pace than rural areas. The growth momentum in urban markets experienced a substantial boost during the June quarter, expanding by 10.2%, whereas it had grown by 5.3% in the March quarter.
NIQ India MD Satish Pillai said, “The softening of India’s inflationary rate and decline in food inflation is good news for the industry. This has led to confidence in spending reflected in retail channels across the country that are growing.”
The decrease in price growth, primarily influenced by the food categories, has yielded a favorable effect on consumers and is expected to be replicated as we approach the festive season.
NIQ lead (customer success), Roosevelt D’Souza, said, “Recovery in rural markets which was in the negative territory for the last few quarters, is primarily driven by non-foods. This, combined with a 21%+ growth in modern trade, augers well for the festive seasons.”
“At this stage, it is important to focus on the right assortment and pack sizes of products. The reduction in input costs, if continued to being passed on to consumers, will only increase consumption benefitting manufacturers, retailers and consumers,” D’Souza added.