Indian FMCG industry surges with 6.6% value growth, rural consumption leads: Report

This quarter's volume expansion surpasses the previous year's Q1 figures, which registered at 3.1 percent, the report noted.

The Indian FMCG (fast-moving consumer goods) industry has seen a notable uptick, with a 6.6 percent growth in value, primarily fuelled by a 6.5 percent surge in volume at the national level, according to the NielsenIQ (NIQ) FMCG Quarterly Snapshot for Q1 2024 report.

This quarter's volume expansion surpassed the 3.1 percent growth recorded in the first three months of calendar 2023, the report noted.

Rural consumption growth has been steadily increasing and has exceeded urban growth in Q12024. Urban areas witnessed a decline in consumer demand, dropping 5.7 percent this quarter.

The report noted that in the retail sector, the segment it classified as Modern Trade showed robust double-digit volume growth at 14.7 percent. Meanwhile, Traditional Trade maintained stable growth, with volumes increasing by 5.6 percent in Q12024 compared to 5.3 percent in the previous quarter (Q42023.

At the national level, both the Food and Non-Food sectors contributed to consumption growth.

In the three months to March 31, 2024, the Non-Food category grew almost twice as fast as Food. And while more Food items were purchased compared to last year, Non-Food saw an increase in the purchase of larger packs.

Volume growth in the Food sector slowed sequentially to 4.8 percent from 5.3 percent in Q42023, mainly due to Staples. Conversely, Non-Food categories improved, reaching 11.1 percent growth in Q12024 compared to 9.6 percent in Q42023. This was driven by Rural areas, growing at 12.8 percent (compared to 9.8 percent in Q4’23), led by Personal Care & Home Care. In Urban areas, Non-Food consumption, particularly in Personal Care, grew 8.4 percent in Q12024 versus 5.8 percent in Q42023).

In the broader FMCG sector, larger companies consistently outperformed their smaller counterparts. However, smaller manufacturers have shown greater volume growth rates in non-food segments over the past two quarters compared to larger corporations. This trend could be attributed to the difficulties smaller players encounter in maintaining stable prices in the food sector, whereas non-food categories, despite experiencing significant price hikes, have seen increased volume growth.

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