For FMCG, rural markets finally deliver some cheer

Rural markets person been a important interest for India’s fast-moving user goods companies for longer than a year, though municipality shoppers person much than made up with accrued spending connected packaged items.

In the March quarter, the FMCG manufacture reported a 6.6% maturation successful worth terms, driven by a 6.5% summation successful volumes, user quality steadfast NielsenIQ said connected Tuesday. NIQ follows a calendar year.

“The FMCG industry’s maturation continues to beryllium driven by depletion trends successful Q1’24 (JFM’24), with agrarian areas surpassing municipality maturation for the archetypal clip successful 5 quarters," said Roosevelt Dsouza, caput of lawsuit success, India, astatine NIQ.

“Notably, location and idiosyncratic attraction (HPC) categories person outperformed nutrient categories. While nutrient categories witnesser higher portion purchases, the maturation successful HPC is mostly driven by the popularity of larger battalion sizes."

Also read: Rough terrain for FMCG cos amid sluggish agrarian demand

NielsenIQ highlighted a “gradual uptick" successful agrarian depletion that surpassed municipality depletion successful the March quarter. 

While municipality markets reported a 5.7% year-on-year leap successful demand, the maturation was slower than December quarter’s 6.9% increase. Rural demand, connected the different hand, was up 7.6% year-on-year successful the March quarter. 

Modern vs traditional

Within the retail sector, modern commercialized reported “strong" double-digit measurement maturation astatine 14.7% for the March quarter. Traditional trade, connected the different hand, experienced unchangeable growth, with volumes increasing astatine 5.6% arsenic compared with 5.3% successful the December quarter, suggesting that accepted retail channels are holding their ground.

Modern commercialized includes ample format retail stores arsenic good arsenic e-commerce platforms. Traditional trade, connected the different hand, typically includes the ubiquitous tiny groceries oregon neighbourhood stores.

Also read: How clime situation tin rainfall connected FMCG’s FY25 show

Across India, some the nutrient and non-food sectors contributed to the maturation successful consumption.

In the March quarter, the non-food class grew doubly arsenic accelerated arsenic the nutrient category. The foods assemblage reported a measurement maturation of 4.8% year-on-year, albeit down from 5.3% successful the December quarter. NIQ attributed this driblet to a slower gait of maturation wrong the staples category.

Also read: FMCG firms had 2 bully years. This 1 whitethorn beryllium different

In contrast, the non-food class saw an betterment with depletion maturation reaching 11.1% year-on-year successful the March quarter.

“This betterment tin beryllium attributed to an summation successful agrarian uptick, with a maturation complaint of 12.8% successful Q1’24 (versus 9.8% successful Q4’23); led by idiosyncratic attraction and location attraction categories. In municipality areas, the non-food assemblage is witnessing expanding depletion successful idiosyncratic attraction increasing astatine 8.4% successful Q1’24 (versus 5.8% successful Q4’23)," the marketplace researcher said.

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Published: 07 May 2024, 12:23 PM IST