FMCG sector grew 10.6% in December quarter, says NielsenIQ India

Fast-moving consumer goods (FMCG) posted a double-digit growth of 10.6 per cent in the December quarter — its best in a year. 

 

In the same period last year, the sector recorded a growth of 6.5 per cent. It witnessed a growth of 5.6 per cent in the September quarter this year, up from 3.5 per cent in the June quarter. 

 

The growth was aided by a sequential recovery in rural markets, festival demand, and higher prices of staples such as edible oil, palm oil, and packaged atta, market research firm NielsenIQ India said in its latest FMCG quarter snapshot. 

 

In terms of volume, the sector witnessed a 7.1 per cent rise despite a 3.3 per cent increase in prices. 

 

“A higher unit growth than volume growth indicates a preference shift towards smaller packs in consumers,” it said.

 

While rural volume growth increased to 9.9 per cent from 5.7 per cent in the September quarter, urban volumes grew to 5 per cent from 2.6 per cent in the preceding quarter. 

 

“India's FMCG sector is poised for robust growth, with rural markets continuing to lead the charge, outpacing urban consumption. For the first time in four quarters, we have observed a combination of consumption and pricing driving overall FMCG growth,” said Roosevelt Dsouza, head of customer success, FMCG at NielsenIQ India. 

 

“Additionally, smaller, affordable packs from small and medium manufacturers are boosting consumption. Despite a slowdown in the top eight metros, e-commerce continues to disrupt buying behaviour,” Dsouza added.

 

While food volumes grew 7 per cent, up from 3.4 per cent in the third quarter, home and personal care categories volumes grew to 7.3 per cent compared to 5.4 per cent in the previous quarter. 

 

“Food consumption growth was driven by increased volume in staple categories such as edible oils, palm oil, and packaged atta, despite price hikes, while HPC categories saw higher consumer demand in both urban and rural areas,” the company stated. 

 

Meanwhile, over-the-counter categories like rubefacients and analgesics experienced a 13 per cent growth in value sales in Q4, supported by a 10.6 per cent increase in prices.

 

The market research firm further pointed out that smaller players continued to grow faster than larger peers. 

 

“Small manufacturers are outpacing larger players in driving consumption, fuelled by consistent volume growth in both food and HPC categories. While the giants are seeing slower value growth, they are still growing at twice the rate compared to Q3’24,” the release added. 

 

Additionally, volumes in kiranas grew by 8.1 per cent in the quarter, compared to 3.9 per cent in the year-ago period. Meanwhile, modern trade volumes fell 1.1 per cent as compared to 20.2 per cent growth in the same period last year.