Comments
India’s FMCG industry is expected to clock a value growth in the range of 7-9 per cent for the full year of 2023 despite global uncertainties, as per NielsenIQ’s latest forecast. This comes on the back of the sector clocking double-digit value growth of 10.2 per cent in March quarter (compared with 7.6 per cent in December quarter) and posting positive volume growth of 3.1 per cent after five quarters.
In terms of annual growth forecast for the sector, the insights and research firm noted that pressures on consumers and high unemployment rate can act as headwinds. But, it added that factors such as the government’s focus on agriculture and capex investments, GDP growth rate forecast, revisions in tax regime and forecast of normal monsoons will act as tailwinds.
Rural offtake
The FMCG industry’s growth was driven by revival in consumption in rural markets and traditional trade which were under pressure for more than a year. The rural consumption revival with 0.3 per cent volume growth was led by the Southern and Eastern regions. Urban consumption maintained momentum (5.3 per cent volume growth) across both foods and non-foods categories.
“The positive consumption growth in the hinterland seen in the quarter is heartening. Urban India continues to be the growth engine in terms of value growth, with organised retail seeing high double-digit growth in modern trade,” said Roosevelt D’Souza, India Customer Success Leader, NIQ. However, grammage reduction and shift to smaller packs continues. The improvement in consumption growth is led by more number of units being consumed; however, shifts towards larger packs are awaited, it noted.
Non-Foods sector revival
Food segment continued to witness higher consumption growth clocking 4.3 per cent volume growth at an all-India level driven by an uptick for staples. Meanwhile, non-food segment volume growth turned positive ( 0.2 per cent) after six quarters led by home care categories but personal care continued to decline.
“The drop in the rate of inflation has also led to a decline in inflation for food categories and given an opportunity to consumers to be cautiously optimistic,” said Satish Pillai, Managing Director – India, NIQ. He added that consumers are now willing to buy more.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.