FMCG industry clocks 12.2% value growth in June quarter

The FMCG industry clocked a 12.2 per cent value growth in June quarter on the back of moderation in inflation and green shoots of recovery visible in rural regions, as per the latest estimates released by NIQ India.

This was 1.3 per cent higher than June quarter last year and 2 per cent higher than March quarter this year.

Volume growth of the sector for June quarter was pegged at 7.5 per cent, which NIQ India ( formerly NielsenIQ) said was the highest in the last eight quarters.

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Rural shines

Witnessing an uptick in consumption, rural regions clocked a 4 per cent volume growth compared to 0.3 per cent in March quarter and -2.4 per cent in June quarter in the previous year. Urban markets continued to witness growth momentum clocking volume growth of 10.2 per cent, which doubled sequentially from 5.3 per cent in March quarter

NIQ India noted that the June quarter has been the best quarter in a year-and-half with positive strides across all growth vectors.

Satish Pillai, MD, NIQ India said, “The softening of India’s inflationary rate and decline in food inflation is good news for the industry. This has led to a confidence in spending reflected in retail channels across the country that are growing. Further, the overall drop in price growth driven by the food categories has also had a positive impact on consumers and is anticipated to be mirrored in the build up to the festive season.”

• Also read: FMCG companies see strong growth in digital revenues in Q1

Food category tops

The consumption in the sector was led by food categories (8.5 per cent volume growth vs previous year). Staple and Impulse categories led the overall growth in the category. Consumers were also seen leaning back towards habit-forming categories in cities and metros, the research and insights firm noted.

Revival in rural consumption helped non-food categories garner a volume growth of 5.4 per cent in the June quarter versus a year ago. However, personal care categories continued to see a decline in rural regions, it added.

In urban regions, non-food categories continued to see an improvement in volume growth (8.9 per cent in Q2’23 versus 3.9 per cent in Q1’23).

• Also read: IT, FMCG stocks drag equity markets down on weak Q1 performance

Modern trade

In terms of channels, modern trade clocked double digit volume growth while traditional trade saw an improvement in volumes to 6.2 per cent in Q2’23 from 1.9 per cent in Q1’23

“Recovery in rural markets which was in negative territory for the last few quarters, is primarily driven by the non-foods segment. This combined with a 21 per cent plus growth in modern trade augurs well for the upcoming festive seasons,” added Roosevelt D’Souza, Lead, Customer Success, NIQ India.

Although an upward trend was seen for average pack size growth, it continued to remain negative across markets except urban markets, it added.

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