The fast moving consumer goods industry's volume growth slowed to 3.8% in June quarter 2024 due to macroeconomic headwinds which impacted the staple food categories, including packaged salt, wheat flour and palm oil, according to a report by data analytics firm NielsenIQ.
The industry saw a volume growth of 7.5% in the June quarter of 2023 and 6.5% in the March quarter of 2024.
"Urban consumption growth dips to 2.8% from 5.7% in the first quarter of 24 while Rural growth is at 5.2% vs 7.6% in the last quarter. However, rural outpaces urban in most parts of India in terms of volume growth," it said.
Modern Trade, which includes supermarkets, hypermarkets, and large-format stores continues to exhibit double-digit volume growth at 10.9% year-on-year. However, it was slower as compared to the March quarter.
Volumes decelerated for traditional trade (such as kirana stores) registering 3.1% growth in the June quarter of 2024 compared to 5.6% in the previous quarter, it added.
The FMCG consumption growth has been primarily impacted by the food sector, with growth at 2.4% in June quarter compared to 4.8% in March quarter, the report added.
"This moderation in volume growth is attributed to staple categories - packaged salt, packaged atta, and palm oil," it said.
In non-food categories, the volume growth was 7.6% in June quarter 2024 compared to last year. Sequentially, it dropped from 11.1%.
"In urban markets, Personal Care categories are witnessing a volume growth at 5.2% in the second quarter of 2024, while in rural it is resting at 8.3%,' it said.
In rural, high contributing categories laundry and utensil cleaners within homecare witnessed slow consumption.
In June quarter, summer-specific categories such as soft drinks, packaged drinking water, prickly heat powder, and glucose powder reported strong growth.
"Soft drinks grew two times faster than FMCG. However, they experienced a volume growth at 9.2% in the second quarter of 2024," it said.
Moreover, in the FMCG industry, large players continued to demonstrate stronger performance compared to small mid-players, and giants.
"Small players face challenges in keeping prices stable, thereby impacting their volumes," it said.
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