FMCG firms becoming less dependent on rains?

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FMCG firms are not very worried about delayed monsoons this year. Things have changed a bit, since the days when companies dreaded a weak monsoon, reports CNBC-TV18.

 

These showers bring welcome respite to the Delhi heat. But it will be a while before they get to where it matters most, the northern plains. The Met Department believes the monsoons will be less than average this year. Even so, FMCG companies are not too perturbed.

 

Executive VP, Godrej Consumer Products , Rakesh Kumar Sinha says, "Of late the FMCG sales haven't been so dependent on the monsoon. So even in poor monsoon years, FMCG sales have been pretty good. Dependency on monsoons has come down over the years."

 

Nevertheless, rural areas contribute significantly to the FMCG industry. AC Nielsen figures show that in 2005 metros like Delhi, Mumbai and Chennai contributed 28.7% to FMCG sales, towns like Jodhpur and Solapur pitched in about 19%, other smaller towns contributed 22.4%, while rural India accounted for 30% of FMCG sales.

 

It's clear that rural areas are crucial to the FMCG industry. But the countryside is becoming less dependent on the rains. That's because of better irrigation, and people moving to the services sector. So now, those monsoon showers will continue to bring welcome respite from summer heat, instead of a crucial element of survival.