May 11, 2023
The previous quarter grew by 7.6%
Rural demand saw positive growth of 0.3% for the first time in six quarters, while urban demand maintained a momentum of 5.3%
After six consecutive quarters of decline, consumption growth for non-foods also turned positive
The Fast Moving Consumer Growth market is expected to grow by 7%-9% for 2023
India’s FMCG sector experienced a double-digit value growth of 10.2% in the January-March 2023 quarter, surpassing the previous quarter’s growth of 7.6%, according to a report from NielsenIQ.
The report indicated that rural demand saw growth of 0.3% for the first time in six quarters, while urban demand maintained a momentum of 5.3%. Food remained the driving force behind consumption growth at 4.3%, while non-food consumption also turned positive for the first time in six quarters. Traditional trade experienced a consumption growth revival, while modern trade retained double-digit growth.
The value growth was largely attributed to the revival in consumption of rural markets and traditional trade, which had been under stress for over a year. Price growth dropped further in the first quarter, aiding the revival in consumption growth and aligning with the stabilisation in retail inflation. After six consecutive quarters of decline, consumption growth for non-foods turned positive, led by the home care category. The rural revival was led by the South and East zones, while urban markets continued a positive trajectory across both food and non-food categories.
Experts said that urban India continues to be the growth engine in terms of value growth, with organized retail seeing high double-digit growth.
Food continued to witness higher consumption, up to 4.3% in the first quarter, compared to 1.6% in the last quarter of the previous fiscal, with staples driving this uptick. The research firm forecasted that the FMCG market would grow 7%-9% for the full year 2023.
As a result, manufacturers are advised to focus on innovations and optimize their assortment to cater to the changing consumer demands, including the ongoing shift towards smaller packs.
Source: Economic Times