FMCG Volume Growth Slows To 3.8% In June Quarter Amid Macroeconomic Challenges
In comparison, the industry experienced 7.5% growth in the June quarter of 2023 and a 6.5% growth in the March quarter of 2024.
The FMCG industry's volume growth decelerated to 3.8% in the June quarter of 2024, hindered by macroeconomic challenges affecting staple food categories like packaged salt, wheat flour, and palm oil, according to a report by data analytics firm NielsenIQ.
In comparison, the industry experienced 7.5% growth in the June quarter of 2023 and a 6.5% growth in the March quarter of 2024.
The report notes that urban consumption growth fell to 2.8% from 5.7% in the first quarter of fiscal 2024, while rural growth decreased to 5.2% from 7.6% in the previous quarter. Despite this slowdown, rural areas continue to outpace urban regions in terms of volume growth across most parts of India.
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.
Volume decelerated for traditional trade (such as Kirana stores), registering 3.1% growth in Q2 2024 (June quarter) as 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 as 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 the June quarter of 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 Q2 2024, while in rural it is resting at 8.3%," it said.
In rural, high contributing categories laundry and utensil cleaners within the homecare segment 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 2 times faster than FMCG, however, experienced a volume growth at 9.2% in Q2 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.
(With Inputs From PTI)
