Opportunity in crisis: FMCG firms use pandemic to focus on volume, margin

Towns and rural areas have led the revival in FMCG segment since June, with the trend expected to last at least for the next two quarters.

The Covid-19 pandemic has allowed fast-moving consumer goods (FMCG) companies to pay attention to both volume and profit growth, something that is considered difficult in the normal course of business. The reason for this is the nature of the FMCG industry.

When companies chase volume growth, margin expa­nsion takes a hit, since the product mix is skewed towards mass-market items that are not considered to be margin-accretive. Similarly, high-value or premium products are regarded as margin-accretive, but restricted to a smaller base of people, impacting volume growth. The pandemic, however, has seen consumers seek value and trust, giving a leg-up to