Economy

‘From household consumption and purchase perspective, 2018 was not a high growth year’

Priyanka Pani Mumbai | Updated on January 07, 2019 Published on January 07, 2019

Kantar Worldpanel’s GM and Country Head, South-Asia, K Ramakrishnan, in an interview with BusinessLine spoke about the FMCG sector’s performance along with some interesting trends that will dominate this year. Kantar’s data is based on purchases made by households and is measured from what comes into a home and not what has gone out of company warehouses or retail outlets. Excerpts

Given the lingering impact of GST and demonetisation, how was the performance in 2018?

From household consumption and purchase perspective, 2018 was not a high growth year. This purchase includes branded, unbranded and items in loose such as wheat, edible oil, etc. The growth in 2018 from that perspective was muted, while still growing. The growth continues to be driven by rural India with urban centres near about flat in purchase or consumption. This was true for MNCs as well as others.

What was the impact of regulatory changes?

GST and e-way bill did not have any significant impact from household purchases of FMCG.

Perhaps some other categories of spends such as eating out, entertainment, jewellery may have seen impact (we don’t track them). However FMCG at a household level per se did not get impacted by regulatory changes.

FMCG witnessed a volume led growth in 2018 is that a good indicator?

Yes, FMCG has seen a volume led growth. We believe a volume led growth can in fact be healthy.

In the sense, it is on top of a penetration increase. That is more households buying rather than lesser households buying more. Penetration increase always leads to better long-term growth.

How are elections going to impact consumer behaviour in 2019?

We have tried to look at elections and their impact on FMCG. We do not see any significant correlation. Perhaps the short term increase in cash flow during elections is used to fund other things and not household spends on FMCG.

Any interesting consumer trends?

The RLN trend continues – Rural growth, growth in Local brands (and hyperlocal brands) and Naturals as a phenomenon has seen growth. Categories related to hygiene have witnessed good growth.

Example, floor cleaners, toilet cleaners, hand sanitisers and insecticides . On the go packs are seeing an increase and their use is much more than on the go. Besides, categories and products offering convenience are seeing a growth hence the small pack growth story continues.

Heathy variants and offerings have not seen consistent growth in foods – however indications of early growth in super foods are also seen.

Published on January 07, 2019
This article is closed for comments.
Please Email the Editor