FMCG industry grows 7.3% in Oct-Dec, rural sales up 14.2%: Nielsen

Source: Business Standard, Feb 17, 2021

The FMCG industry in India has recorded a value growth of 7.3 per cent in October-December quarter helped by consumption-led recovery during the festive period and increase in sales from traditional as well as organised trade, according to data analytics firm Nielsen.

The metro market witnessed “significant recovery”, while rural India, which is performing well after a quick recovery from the pandemic, continued to be “buoyant” and witnessed double-digit growth during the quarter under review.

Large manufacturers also bounced back with consumption-led growth during the quarter, while the small ones clocked double-digit growth amid rise in consumption, said the FMCG Snapshot for Q4 2020 released by NielsenIQ’s Retail Intelligence team.

NielsenIQ is a part of global measurement and data analytics company Nielsen.

The Fast Moving Consumer Goods (FMCG) industry in India, saw a bounce back with a growth of 7.3 per cent in the quarter ending December 2020. This growth in Traditional trade (Grocer, Chemist, Paan shops etc.) and Organised Trade (Modern Trade and Ecommerce) was driven by consumption,” it said.

The festive period-led growth uptick in November, was sustained in December also, it added.

In 2020, the FMCG Industry had a value degrowth of 2 per cent.

In October-December quarter, products such as liquid toilet soap, antiseptic liquid, floor cleaner, toilet cleaner in the Hygiene & Immunity building’ categories continued a high-value growth of 46 per cent in comparison to the corresponding quarter.

“The home and personal care’ basket made a consumption-led recovery (5 per cent volume growth vs year ago), while Food categories saw a 10 per cent growth riding on boost in consumption as well as a price increase in some food baskets, it said.

This growth recovery was widespread in the food basket, including Staple Foods’ that grew 18 per cent in the December quarter, vs a year ago.

While the Indian consumer has had a tough year, the last quarter of 2020 has seen a recovery in consumption as economic activities have started moving back to normalcy (opening up).

“The festive season brought a further boost to the sentiments and since then there has been a visible uptick in growth for the industry resulting in an increase in consumption across staples, and home and personal care, said NielsenIQ Lead, Retail Intelligence, India Diptanshu Ray.

The Indian metropolitans, with more than a million population, have come back into the positive growth zone after two-quarters of decline and reported 0.8 per cent growth in October-December quarter.

While, rural markets continued to grow in double digits – accelerating to 14.2 per cent in the October-December quarter, from 10.6 per cent in the July-September quarter.

This sharper recovery is on the back of favourable agricultural sector performance, government action towards rural employment generation, and as rural India had a lesser impact of the pandemic, it added.

Large FMCG manufacturers bounced back with consumption-led growth but small manufacturers, having an annual sales turnover less than Rs 100 crore, continued to exhibit double-digit growth of 16 per cent in the December quarter.

Meanwhile, e-commerce is stabilising at a consumption level higher than pre-COVID. The e-commerce spurt is more prominent in the metros, it said adding that traditional trade channels consolidated its share in the metro markets. Traditional trade channels continued their growth momentum in the December quarter (8 per cent vs year ago), after a 3 per cent growth it clocked in the Sep quarter. Within organised trade, Modern Trade channel has posted a strong recovery to (-) 2 per cent in the December quarter, as against a (-) 15 per cent in September quarter, it added.

Despite production & supply woes, FMCG market growth doubles to 4.2% last year

Source: ETRetail.com, Feb 01, 2021

Mumbai: India’s fast-moving consumer goods (FMCG) market expanded 4.2 per cent in the last calendar year, twice the rate in 2019 despite manufacturing and distribution hurdles in late March and April, helped by the rise in the packaged food and hygiene segments as many Indians stayed home due to Covid.

The market for daily groceries and household products had grown 2.1 per cent by volume in 2019, according to the latest study by global consumer research firm Kantar Worldpanel (formerly IMRB). Volume indicates the unit number of products bought or consumed.

Except for beverages, which declined 3.8 per cent, all other segments —personal care, household and foods — witnessed significantly higher growth during the year.

This rose in successive quarters after gradual reopening of the economy as restrictions were progressively eased.

Colgate global chairman Noel Wallace said he was pleased with the growth rebound that the oral care giant saw in India during the second half of 2020. “Generating 7per cent organic in the third quarter and just shy of 10per cent organic in the fourth, we think is a terrific performance,” Wallace said on an earnings call.

During the December quarter, most companies posted high volume growth. Dabur and Marico posted 18per cent and 15per cent expansion, respectively. HUL volume growth at 4per cent was at a fourquarter high. Kantar said the overall market grew 5.5 per cent during the last quarter, buoyed by rural India’s strong performance, which touched 6.6 per cent, the highest in the past 16 months.

“Rural and personal care continue to be the growth drivers in the latest quarter too,” said K Ramakrishnan, managing director, South Asia, Worldpanel Division. “Even bottled soft drinks start a comeback after being hit severely in Q2 and Q3, an indication that the household behaviour is returning to some sort of past normalcy.”

Since the nationwide lockdown beginning March-end, villages drove overall market growth, outpacing cities, which were severely impacted by the pandemic-induced disruption.

FMCG cos likely to see a robust Q3 as sales revive

Source: LiveMint.com, Jan 15, 2021

India’s fast moving consumer goods (FMCG) companies are expected to report strong December quarter earnings aided by festive sales, improved consumer sentiment, better mobility, and a severe winter that led to people spending beyond staples and cleaning products.

In what may be a turning point for FMCG firms, they could see the strongest top-line growth rate in seven quarters, analysts at Motilal Oswal Institutional Equities said in a 14 January note. “Top-line growth momentum has well and truly returned post the pandemic impact in previous quarters, with cumulative sales for our coverage universe expected to grow 8.5% year-on-year (y-o-y) for 3QFY21. This is the strongest pace of growth estimated since the March 2019 quarter.”

Edelweiss Securities estimates revenues at large consumer goods companies to grow 8.2%, with profit after tax (PAT) growing 4.4% y-o-y in the third quarter of the current fiscal year.

In Q2FY21 it had projected a 6.4% jump in quarterly revenues with PAT down 3.7%.

Sectoral analysts also remained bullish on growth prospects in the December quarter on the back of sustained sales momentum in rural and a recovery in discretionary categories, along with improved consumer sentiment and spends because of pent-up demand.

India witnessed the world’s harshest lockdown as covid cases surged early last year. This led to a severe disruption in demand and tilted the scales in favour of packaged food makers, and health and hygiene products. Meanwhile, discretionary items, such as beauty products and out-of-home consumption products such as beverages and ice-creams reported a slump in demand.

Researcher Nielsen expects the country’s FMCG market to report a 1-3% decline in full year sales. In its earlier forecast, Nielsen had said FMCG sales returned to 1.6% y-o-y growth in the September quarter, after 19% contraction in the preceding three months of 2020. Nielsen follows a calendar year.

ICICI Securities is estimating sharper growth in third quarter sales with 12.1% revenue growth. However, gross margins for most companies could be under pressure, with rising prices of crude and a few agriculture commodities. Companies are initiating price hikes, selectively.

Discretionary categories could finally see some respite in demand. Analysts at Edelweiss said that with the lockdown restrictions easing, discretionary categories such as hair oil, skin care, hair colour, and juices are beginning to revive. “We expect Emami, Marico, paint companies, and Dabur to report double- digit volume growth y-o-y. HUL’s GSK business and skin care would see good recovery,” it said. Sales of sanitizers and cookies, on the other hand, could cool off after seeing heightened demand in the first six months of the year.

Marico Ltd said in its quarterly update on 4 January that its India business delivered a strong performance with double-digit volume growth. “Parachute coconut oil delivered ahead of its medium-term aspiration. Saffola edible oils continued its growth momentum, delivering double-digit volume growth… There was a steady revival in discretionary categories with the premium personal care portfolios witnessing improving trends sequentially, but still posting a modest decline on a y-o-y basis,” it added. Meanwhile, TV advertising grew in the second half of the year. Hindustan Unilever was the biggest advertiser with 30% growth in volumes over 2019, followed by Reckitt Benckiser Group, with its ad volumes growing by 37% in 2020 over the year-ago, according to data from television monitoring agency Broadcast Audience Research Council released earlier this month.

FMCG industry sees signs of recovery in September quarter: Nielsen

Source: Business Standard, Nov 26, 2020

After an unprecedented decline of 19 per cent in the January-March quarter, the FMCG industry has displayed signs of recovery in the September quarter with a year-on-year growth of 1.6 per cent, according to market insight firm Nielsen.

The growth witnessed in the fast-moving consumer goods (FMCG) sector was also a reflection of positivity witnessed in the overall macroeconomic scenario amid opening up of the economy and easing of lockdown restrictions.

In its India FMCG growth snapshot for the third quarter of 2020, Nielsen said the FMCG slowdown in the second quarter saw a value decline of 19 per cent as compared to the same period of 2019. This was fuelled by massive disruptions in the production and supply chain, and low consumer confidence.

“The unlock from Q3’20, saw a revival in the industry with a growth of 1.6 per cent versus a year ago. The revival was aided by businesses opening up with the pandemic reaching stable levels,” it said.

Markets started opening up in a phase-wise manner and store closures came down to an average of 3 days a month in Q3’20 from an average of 9 days a month in Q2’20. After being cooped at home for a long time, consumers also started looking at resuming normal consumption levels, Nielsen added.

In terms of products, Nielsen said with the opening of the economy all baskets showed signs of recovery, albeit with some clear changes that got reflected in consumers’ product preferences.

“Consumers prioritised spending on essential foods during the locked down quarter and with the unlock quarter this accelerated to double digit growth. We saw an interesting trend in the non-food (Home care and personal care) categories too. The segment registered a movement towards revival with Unlock in Q3’20, indicating a need to move towards normalcy,” it added.

With heightened consciousness around health and wellness, the ‘health and hygiene’ categories have become an integral part of the new normal for consumers and continued to boom in the September quarter as well, Nielsen said in its Q3 snapshot.

“As COVID has prompted consumers to re-frame their habits into health and hygiene, more new launches have been made in the health and hygiene basket, including categories like hand sanitisers, floor cleaners, toilet cleaners, antiseptic liquids,” Nielsen said.

New launches in the health and hygiene space contributed to 37 per cent (in value) of all new launches in the ‘COVID period’. The value contribution of new launches in the health and hygiene category was higher during the ‘COVID period’ at 2.9 per cent, it added.

As far as market geographies are concerned, rural areas continued to drive growth for the FMCG sector.

“With easing of pandemic and markets unlocking in various phases in the third quarter of the year, we saw recovery across town classes with the rural and rest of urban (ROU) regions continuing to lead growth,” it said.

FMCG witnessed a double-digit growth of 10.6 per cent in Q3’20 in rural India, while the bigger cities of over 1 Lakh population, including metros and Town Class 1, played catch-up, it added.

“The rural markets have bounced back handsomely on the back of support provided by the government as well as good agriculture, reverse migration and a lower unemployment rate,” Nielsen said.

Packaged staples and hygiene categories drove faster growth in the rural market.

Nielsen, however, said the impact of the pandemic on consumption patterns is also apparent in the zones of the country. “Higher rural population and lower incidence of COVID cases in the East and North zone have helped these zones recover faster. On the other hand, the West zone that has a relatively higher urban population and had higher severity of the pandemic continued to decline in Q3’20,” the company added.

FMCG cos gear up as Bharat rises

Source: LiveMint.com, Nov 12, 2020

Consumer goods companies are ramping up distribution in India’s smaller towns and villages, where sales are rising thanks to reverse migration, increased minimum support prices, government stimulus measures for the rural economy and a normal monsoon.

Companies are trying out new pack sizes, leveraging online sales, and customizing products to expand their reach in the hinterland.

“We are appointing more distributors to enhance our rural reach. We are also appointing a lot of village-level entrepreneurs so that when the village sales scale up, we are able to convert them into sub-stockists and it becomes a part of our distribution network,” said Mohit Malhotra, chief executive officer, Dabur India Ltd. The company aims to reach 60,000 villages by the end of this fiscal, up from 52,000 in March 2020.

Jyothy Labs has rolled out ₹10 and ₹5 packs of its more urban-oriented dish cleaning brand Exo in villages and ensured last-mile supplies of its products. “Rural has been our strength from Day One. Now we’re putting more effort, appointing more sub-stockists, getting more distribution points and retail outlets and delivering at their doorsteps,” said Ullas Kamath, joint managing director, Jyothy Labs. Rural brings 40% of sales for the maker of Ujala fabric whitener and Pril utensil cleaners.

Growth in India’s villages, which account for over 36% sales for makers of fast-moving consumer goods, had slowed in 2018, pulling down overall growth for the entire industry.

Rural markets with their large population and consumer graduation from unbranded to branded and packaged goods have long been seen as a significant reservoir of growth for companies.

While the lockdown initially disrupted supplies for several companies, it also stoked demand for hygiene products and packaged foods in India’s villages. With the pandemic forcing people to return home —from big cities to smaller towns and villages—tier II, tier III towns and villages saw good traction for consumer goods.

Dabur’s Malhotra said rural demand trends will sustain for some more time, a commentary most large packaged consumer goods firms including Hindustan Unilever have maintained.

Packaged foods and beverage maker PepsiCo India has listed its products on Grameen e-store, a hyperlocal e-commerce platform for villages and enables last-mile delivery. For this, it partnered with common service centres (CSC) under the ministry of electronics and information technology (MeitY). Brands such as Lay’s, Kurkure and Uncle Chipps will be available on the Grameen e-store.

Raju Pullan, senior vice-president, consumer electronics business, Samsung India, said it is already seeing strong demand from tier-III cities as first-time buyers who typically travel to larger cities to buy big-ticket items purchase TV sets and washing machines locally. In response, Samsung has ensured availability in these markets.

“We will continue to focus on the nearby stores because consumers are willing to buy products from such stores,” said Pullan.

“Why we are seeing rural is growing is because one of the best harvests of wheat has been seen this year. Second, this is one of the best monsoon years. Third is government push towards rural—which is minimum support pricing and rural infrastructure. And fourth is efforts by organizations—whether it is rural-oriented packs or other distribution efforts by manufacturers,” said K. Ramakrishnan, managing director at Kantar Worldpanel, which tracks FMCG consumption.

Bharat spurs growth of FMCG companies, but Urban India not far behind

Source: Business Standard, Oct 25, 2020

Mumbai: Rural India has spurred the growth of fast-moving consumer goods (FMCG) companies, at a time when Urban India has been reeling under the impact of the coronavirus (Covid-19) pandemic. The September quarter results of most FMCG companies reflect this trend, with rural growth outpacing growth in urban areas by a wide margin.

While the sales momentum from rural areas is expected to last for another three to six months, urban growth could stage a comeback by the June quarter next year, said analysts, as people learn to live with the virus and economic activity gradually improves in cities.

Around 60-65 per cent of an FMCG company’s sales come from urban areas and 35-40 per cent sales come from rural areas, making the former a critical component of a firm’s topline. Therefore, the sooner the recovery in urban areas, the better it is, say sector experts.

“Rural areas have gained from the good monsoons this year, higher minimum support price in some states, reverse migration and the government’s overall welfare push in the villages,” says G Chokkalingam, founder, Equinomics Research and Advisory. “But as the economy unlocks and job uncertainty reduces in the cities, urban growth will improve. This could happen by the June quarter of the next financial year,” he says.

Sachin Bobade, vice-president, research at brokerage Dolat Capital, says that FMCG companies will benefit next year from a low base on the urban side of their business thereby optimally pushing up urban growth.

Ironically, rural FMCG growth this year has benefitted from a low base, since in the corresponding period last year rural India had grown at its slowest pace in 7 years. Rural areas, for the uninitiated, had witnessed much distress due to a liquidity crisis as well as floods, hitting sales, similar to the weakness that urban areas are seeing this year due to restricted living triggered by the coronavirus.

The segments most impacted in urban areas include discretionary and out-of-home categories, though companies say the scenario will improve in the months ahead as the economic outlook improves.

“Urban is looking a little uncertain at this point. While it is difficult to estimate market growth, we remain cautiously optimistic,” Sanjiv Mehta, chairman and managing director (MD), Hindustan Unilever (HUL), said in a post-results media briefing last week.

Suresh Narayanan, chairman and MD, Nestle India, said, “The rural-urban growth divide will narrow as we go forward with relative normalcy in urban centres.”

Market research agency Nielsen has said that the sales outlook for urban areas will get better as chances of finding a cure for the Covid-19 virus grow. The government has indicated that by the first quarter of the 2021 calendar year a vaccine should be available in the country, though some experts estimate it will take longer, rolling out by June of 2021.

Moreover, administering the vaccine to the masses will take time, they say. Yet, news of a vaccine discovery could bring a sigh of relief to consumers, especially in urban centres, who’ve been hit hard by surging Covid-19 cases.

Rural strategy

For now, companies are turning to the hinterlands, broad-basing their low-unit pack (LUP) strategy and expanding their rural distribution by adding more field force and rural distributors to improve penetration. Varun Berry, MD, Britannia Industries, said that his company was looking at taking its Rs 5 packs across its brand portfolio as it sought to push these products into rural areas. While Mondelez India’s sales director Parveen Dalal said that his company was closing monitoring the consumption index across villages. The purpose was to identify those places where demand was higher for its products in a bid to step up its sales and marketing effort in these areas.

Big FMCG brands overcome challenges, close gap with smaller players

Source: Business Standard, Oct 04, 2020

Mumbai: Racks at local grocery stores are, nowadays, packed with popular trademarks. However, this wasn’t the case a few months ago. At the height of the lockdown small and regional names in food and fast-moving consumer goods (FMCG) beckoned for attention, seeing a sharp spike in off-take.

The trend has now reversed. Market research agency Nielsen’s FMCG index shows that the gap has narrowed between national and regional brands to nine points in August, as big names tide over supply-chain issues, distribution challenges, and retailer woes.

Nielsen says national and regional brands have been fighting to make their presence felt in the past few months, with the gap at around 11 points in March-April, when big brands had to temporarily suspend operations due to the nationwide lockdown.

This gap narrowed to eight points in May, as national brands fought back to revive operations, but increased again to 11 points in July, when vertical lockdowns were introduced in various parts of the country, impacting key players.

“Despite the tug of war, the seminal trend is that big players are closing the gap with small brands. This comes as operations get back to normal after the disruptions witnessed earlier.

National brands have also increased distribution and visibility. Many are pushing their presence aggressively into rural areas to tap into the growth there,” said Sameer Shukla, executive director, retail intelligence, South Asia, Nielsen Global Connect. Small brands have limitations in expanding their reach and visibility, Shukla said, which is a clear advantage for large players.

Sumit Malhotra, director, Bajaj Consumer, also said: “Small players may not have the wherewithal to take their presence into newer areas. Some of them could also be facing liquidity issues, which limits their reach.”

FMCG executives and experts endorse this view. Mayank Shah, senior category head, Parle Products, said: “The past few months have seen fluctuations within the FMCG market. Big brands were hit due to the nationwide lockdown, but have bounced back strongly.” Shah said this trend would continue as big players not only push their presence into rural areas, but the emphasis on trusted brands also grows among consumers.

Kaustubh Pawaskar, associate vice-president, research at brokerage firm Sharekhan, said the tilt towards trusted labels is higher in times of crisis. “Consumers will gravitate towards brands that evoke strong recall and have high trust codes, especially during a health crisis.

The strategy for the national companies would be to keep these trust codes going by reinforcing quality standards and improving penetration,” Pawaskar said.

New brand launches in categories such as health and hygiene and in-home cooking have increased sharply already as consumers pivot towards essential products in comparison to discretionary items, choosing to rationalise their household budgets.

While biscuit majors such as Parle Products, Britannia, and even companies like Gujarat Co-operative Milk Marketing Federation (GCMMF, the makers of Amul) reported strong growth rates in the April-June period, led by in-home consumption and focus on essentials, experts said these players had to be disciplined in their approach to take advantage of the uptick in consumption.

R S Sodhi, managing director, GCMMF, said the shift towards branded and affordable products would increase. “People have become value seekers. Affordability is key in challenging times. The second point is that consumers do not want to let go of quality, which is why trustworthy brands are in demand,” he said. Mohit Malhotra, chief executive officer, Dabur India, said promotional intensity is growing as large players entice consumers with multiple offers. He said companies are launching low-unit packs in rural areas. At the same time, price and grammage offers are visible on large packs in urban areas. Nielsen said that retailers have pruned their assortments in August, reducing clutter and opting to stick with categories and products that are seeing greater traction. This is giving the large brands the room to flex their muscles.

Increased demand for groceries lifts household consumption to a two year high in April-June

Source: ETRetail.com, Aug 11, 2020

MUMBAI: Household consumption of groceries and home and personal care products surged to a two-year high during the April-June quarter, according to a research firm, as consumers stocked up on these products while hunkering down in their homes due to Covid-19-related restrictions.

The fast-moving consumer goods market expanded 4.3% in volume and more than 8.5% by value during the quarter, according to data from Kantar Worldpanel. Kantar’s numbers contrast with data from market researcher Nielsen, which showed the market declined 18%. This is likely because Nielsen mainly covers retail sales of packaged goods while Kantar tracks household consumption of both branded products and those from the unorganised segments.

“From a household purchase lens, FMCG overall seems fairly strong. While out of home consumption may have seen a sharp drop, the household view is one of positive growth,” said K Ramakrishnan, the South Asia managing director at the company owned by communications and advertising giant WPP.

At an overall level, most listed companies have either posted a decline or stagnant sales growth during the quarter, hurt by falling out-of-home consumption. Also, there is a lag effect with companies posting primary sales data which were impacted by supply-chain disruptions compared with Kantar’s numbers which show actual consumption.

“With people staying at home, both household consumption by volumes as well as frequency was higher across food and non-food products, which reflected in published results. Companies which have lower dependence on out-of-home categories posted good results,” FMCG company Marico’s managing director, Saugata Gupta, said.

For instance, Britannia, maker of Good Day and Tiger biscuits, expanded sales by 25%, while Hindustan Unilever said there was a big burst of demand for jams and ketchup as people were cocooned in homes. ITC, which makes Sunfeast biscuits and Bingo Chips, said staples, noodles, biscuits and dairy products saw healthy demand in the June quarter. Marico too said demand for its Saffola cooking oil grew 16% due to an increase in home cooking. It also reported higher in-home consumption of hair oils.

Kantar’s data are heavily skewed toward the food and beverages segment, which accounts for nearly 70% of the overall volume of products covered and has a higher proliferation of items from the unorganised end of the business. Within F&B, foods grew 5.7% but beverages dropped 19% largely because hotels, restaurants and caterers – popularly called HoReCa and account for almost a third of the overall business for beverages companies – were shut.

“Despite the fact that across the globe and across different states and cities in India, on-premise and out-of-home consumption is getting eased out, we still see a challenge which consumers are still very, very hesitant to step out,” Tata Consumer Products managing director Sunil D’Souza told investors last week.

FMCG stocks on a roll as household binge during lockdown drives valuations

Source: ETRetail.com, Aug 06, 2020

New Delhi : Stocks of fast-moving consumer goods (FMCG) companies are on a roll since the lockdown in March as increased consumption at home and lesser disruption in demand compared to other sectors have boosted valuations.

The FMCG Index grew 32 per cent from March 23 till now. Among the consumer stocks, several have seen massive rallies during the period with Tata Consumer Products up by 98 per cent, Britannia up by 80 per cent, Godrej Consumer by 56 per cent, Marico by 52 per cent, Colgate by 32 per cent, Dabur by 27 per cent, ITC by 25 per cent and HUL up by 18 per cent, according to Religare Broking.

Ajit Mishra, VP-Research, Religare Broking, said that with the easing of the lockdown measures, resumption of factories and easing of the supply chain of essential products, the companies present in the essential commodity segment as well as in the health and hygiene segment clocked significant revenue as they kept on picking up pace with higher demand.

Products such as biscuits, bread, milk, tea, coffee, food packets, detergents, floor cleaner and hygiene products (sanitisers, hand wash, soaps etc.) were in high demand.

Mishra said that companies such as Britannia, Dabur and Tata Consumers reported strong performance as a large part of their portfolio is present in the essential products segment while that of HUL, Marico, Godrej Consumers, ITC and Colgate reported mixed numbers.

Further, most of these FMCG companies benefitted from benign material prices as well as lower advertisement spends which led to improvement in margins.

The Covid-induced lockdown also impacted FMCG companies’ sales and demand initially as they faced disruption in distribution due to restrictions in the supply chain as well as closure of factories.

Notably, demand for essential commodities started to increase while that of premium products and discretionary items were adversely impacted as strict lockdown was imposed which restricted their movement.

Further, local kirana shops gained more as compared to branded stores as they had varieties of products available and were also able to deliver products on time. Besides, impulsive buying, bulk and economical options and move towards e-commerce and digitalisation was the new trend among the urban consumers during the lockdown period as consumers were afraid of contracting the virus.

As a result, FMCG companies tied up with delivery agents and also launched their own e-commerce apps for reaching out to the customers.

FMCG companies are continuing to focus on their core brands, managing distribution and supply chain and efforts towards growing digitalisation and e-commerce sales. These steps would help them overall the recent challenges and are expected to post decent numbers in the coming quarter.

Nielsen expects FMCG sector growth to be flat in 2020

Source: The Hindu Business Line, Jul 30, 2020

New Delhi: Nielsen has slashed its growth forecast for the FMCG sector in the country and expects it to be nearly flat in the range of 1 per cent to -1 per cent for the full year 2020.

The markets research and insights firm had in April said it expected the FMCG value growth to be in the range of 5-6 per cent for the calendar year.

In the April-June period (Q2), the FMCG sector’s value growth declined by about 17 per cent, due to the strict lockdown imposed to curb the spread of Covid-19 pandemic adversely impacted supply chain and consumer demand, it added.

While in the April-May period, value growth for the sector was down by 27.7 per cent, as the country gradually began unlocking economic activities in June, the FMCG sector saw some recovery with a value growth of about 4.5 per cent. The insights firm said that this was fuelled by recovery in rural demand and added that growth in rural markets outpaced urban markets.

Nielsen expects consumer spends in the second half of the year to revive due to the festival season besides other macro-economic factors such as good monsoon. However, this will also depend on Covid-19 infection cases and the strategy the country adops in further unlocking of economic activities.

“We expect to see some recovery in the July-December period.We are expecting to see some growth in Q3 but we expect to see even better growth in Q4 due to the festival season.” said Prasun Basu, South Asia Zone President, Nielsen Connect