FMCG sector grows by 9% in Dec 16-Nov 17 period

As per data available from Kantar Worldpanel, during Jan-Mar 2017 sector volume grew by 6%

The fast moving consumer goods (FMCG) sector in India grew by nine per cent between December 2016 and November 2017, as per research agency Nielsen. While, the growth figure stands taller with comparable numbers for the past five years, a lower base may have played a role.

During the period FMCG majors like Hindustan Unilever (HUL), Dabur and Marico witnessed severe fluctuations in sales numbers. HUL – the largest player in the sector – for example, posted four per cent growth in volume during January-March quarter, followed by flat sales in June quarter. For Dabur, the numbers are lower. While, it managed to post 2.4 per cent growth during the first three months of the year, sales dipped 4.4 per cent year-on-year during April-June, thanks to the massive destocking exercise taken up by all trade partners. Marico, after posted impressive 10 per cent growth in March, witnessed nine per cent plunge in volume uptick.

As per data available from Kantar Worldpanel, during Jan-Mar 2017 sector volume grew by six per cent, albeit on a low base. During the two corresponding periods sales grew by meagre two per cent (in March, 2015) and four per cent (in March, 2016), respectively. In fact, during the two years – 2015 and 2016 – the sector faced severe challenges in growing its volume sales. Quarterly Cumulative Average Growth Rate (CAGR) during the period remained at 4.8 per cent.

According to a senior executive from a key FMCG player, the effect of demonetisation may have further brought down the base year numbers. “While there is no denying that signs of a recovery are in sight, it is too early to put your bet on that. As the shock from note ban was waning volumes had improved in March quarter. But the advent of the goods and services tax (GST) again placed temporary roadblocks. However, business has started to pick up since October”, he said.

Table1: Volume growth posted by FMCG majors in 2017

 

Jan-Mar

Apr-Jun

Jul-Sep

HUL

4

0

4

Dabur

2.4

-4.4

7.2

Marico

10

-9

8