Rural value growth reached 4.4% and continues to stay ahead of Urban at 3.8% on the other hand there was a slowdown in consumption led by Food (2.4%) while Non-Food volume growth touched 7.6%.
Hyderabad: Consumer intelligence company NielsenIQ (NIQ) has released the FMCG Quarterly Snapshot for Q2’24 (AMJ’24). According to the report, the Indian FMCG industry has experienced a 4.0% growth in value, reflecting the industry’s resilience despite a slight moderation in volume growth to 3.8%. Price growth stabilised at a modest 0.2% in Q2’24, underscoring a stable market environment.
Roosevelt Dsouza, Head of Customer Success – India at NIQ, stated, “The Indian FMCG industry growth has been steady, reflecting its resilience and adaptability. The sector experienced a 4.0% value growth in Q2 2024, attributed to relaxed consumption patterns. This deceleration in volumes is largely due to macroeconomic headwinds. While rural volume growth at +5.2% continues to outpace the 2.8% growth in urban areas, both regions experienced softer consumption this quarter.”
Market Dynamics: Rural continues to outpace urban:
Urban and Modern Trade markets see a sequential slowdown in consumer demand in Q2’24. Urban consumption growth dips to 2.8% from 5.7% in Q1’24 while Rural growth is at 5.2% vs 7.6% in the last quarter. However, Rural outpaces urban in most parts of India in terms of volume growth.Modern Trade continues to exhibit double-digit volume growth at 10.9%, however slower than last quarter (Q1’24). Volumes decelerated for Traditional Trade registering 3.1% growth in Q2’24 compared to 5.6% in the previous quarter (Q1’24).
Easing growth rate in consumer demand for Food and Non-Food Products:
FMCG consumption growth has been primarily impacted by the Food sector, with growth at 2.4% in Q2’24 compared to 4.8% in Q1’24 (refer to Chart 3). This moderation in volume growth is attributed to Staple categories – Packaged Salt, Packaged Atta, and Palm Oil. In Non-Food categories, the volume growth is at 7.6% in Q2’24 compared to last year, a drop from 11.1% in Q1’24. This downtrend in consumer demand for Personal Care & Home Care categories is observed in both Urban and Rural. In Urban markets, Personal Care categories are witnessing a volume growth at 5.2% in Q2’24 (vs. 9.7% in Q1’24), while in Rural it is resting at 8.3% in Q2’24 (vs. 10.6% in Q1’24). In Rural, high contributing categories Laundry and Utensil cleaners within Homecare witnessed slow consumption.
Over the Counter categories like Rubefacient, Analgesics exhibited a growth in value sales to 13.8% in Q1’24 backed by price growth.
Summer-specific categories like soft drinks, packaged drinking water, prickly heat powder, and glucose powder flourished in Q2’24 vs YA. Soft drinks grew 2x faster than FMCG, however experienced a volume growth at 9.2% in Q2’24 (vs 10.8% in Q1’24).
Within the broader FMCG industry, large players continue to demonstrate stronger performance compared to small, mid players, and giants. Small players face challenges in keeping prices stable, thereby impacting their volumes.
