FMCG y-o-y growth slips for April-May: Nielsen

All attempts to boost sales of fast moving consumer goods (FMCG) companies — trade promotions, reduced prices, more net content of packaged goods — don’t seem effective enough.

The year-on-year (y-o-y) growth in April and May, at 16.2 per cent, was lower than that of April and May 2008, at 19 per cent, according to the latest Nielsen report.

The study was conducted by the new Nielsen panel which consists of a larger sample size of retail stores, traditional and modern, and was based on the performance of 10 FMCG companies — Godrej Consumer Products (GCPL), Hindustan Unilever (HUL), Dabur, Nestle, Colgate Palmolive, Marico, Britannia, Proctor & Gamble, Tata Tea and GlaxoSmithKline Consumer Healthcare (GSKCH). Of the 10, only Nestle recorded a good sales growth of 20.1 per cent, YoY, in April-May on the back of strong growth experienced in noodles, milk food and milk powder.

Key categories (such as washing powder and detergent cakes) continued to witness declining volumes, even though companies like HUL had a price cut during the January to March quarter. Overall growth was broad-based, as all categories, except toothpaste and edible oils, grew over 10 per cent.

Nielsen had broadened its sample size earlier this year, as FMCG companies like HUL were concerned over dropping market share and had found a deviation between the reports of Nielsen and their own market intelligence reports, as well as those of consumer survey reports by third-party agencies.

Even the new Nielsen data panel indicates sharp volume and market-share dip in key categories for HUL. HUL’s sales growth at 9.6 per cent indicates reversal of the consistent, strong double-digit topline growth in over six quarters.

HUL lost significant market share in toilet soaps, down by 573 basis points (bps) year-on-year to 46.7 per cent. Market share decline was witnessed in key brands Lux (down 199 bps y-o-y) and Lifebuoy (down 176 bps y-o-y), toothpaste (down 150 bps y-o-y), skin care (down of 600 bps y-o-y), detergent cakes ( down 370 bps y-o-y to 39.4 per cent) and shampoos (down 110 bps y-o-y to 45.4 per cent).