Declining rural demand hits FMCG sector

Source: The Hindu Business Line, Aug 06, 2019

Mumbai: The declining consumption in rural India and the overall slowdown in the economy has led to plummeting year-on-year volume growth for FMCG companies plummeting in the first quarter of this financial year.

“The performance (of FMCG companies) has been mixed, as most companies have seen quarter-on-quarter (QoQ) and year-on-year (YOY) decline in volume growth. Rural demand, which was growing at 1.5x urban growth has come in line with the urban growth or in some cases is growing below urban growth also…The volume growth has been softening, more so in the past two quarters and the trend is across the board for most companies,” Amnish Aggarwal, Head of Research of Prabhudas Lilladher Pvt Ltd, told BusinessLine. Read the rest of this entry »

For FMCG companies and consumers, ₹10 packs fit the bill

Source:, Aug 01, 2019

New Delhi: Indian consumers need little convincing to embrace products at cheaper price points; after all, good things come in small packages.

The nation’s largest household goods makers are introducing cheaper packs— ₹10 is the popular choice—of products ranging from soaps to chocolates to attract new consumers as an economic slowdown in Asia’s third-largest economy depresses demand.

Over the past few quarters, brands such as Doritos, Dabur Amla hair oil and Babool Ayurvedic toothpaste have all released products in ₹10 price packs. Lower prices are expected to help companies reach newer consumers, especially as they expand their reach in rural markets. Moreover, with exposure to the internet, even rural shoppers are aspiring to buy premium products, albeit at an affordable price, said top executives at consumer product companies. Read the rest of this entry »

FMCG companies losing speed: Growth slows for third quarter

Source: The Economic Times, Jul 18, 2019

NEW DELHI: Growth in India’s fast moving consumer goods (FMCG) sector is declining as lower spending in urban centres and slowdown in rural growth crimp consumption, according to market research firm Nielsen.

The country’s largest market researcher on Wednesday said value growth in the FMCG space in the April-June quarter of 2019 dropped to 10% from a year ago. It was also the third consecutive quarter of slowdown. The Q2 growth numbers follow softening from the third quarter of last year when the sector registered 16.2% growth, it said. Read the rest of this entry »

FMCG firms may see pick-up in demand later this year: Report

Source:, Jun 18, 2019

India’s consumer goods majors will have to wait till the second half of the current financial year for a pick up in demand, benefiting from government measures to revive the rural economy and the likelihood of normal rains, said a report released on Monday.

The report by Mumbai-based brokerage firm Edelweiss suggested that volumes at the consumer staples firms will see an uptick in the second half of FY20.

“We estimate consumer staples’ volumes to perk up in H2 FY20 led by the NDA (National Democratic Alliance government) introducing stimuli to revive the rural economy; extension of the PM-Kisan scheme across farmers, as well as pension scheme for small traders to put money in the hands of consumers,” Abneesh Roy, senior vice-president (research), Edelweiss Securities, said in the report. Read the rest of this entry »

Not fast and furious, it’s a slow turn for consumer companies

Source:, Jun 14, 2019

MUMBAI | NEW DELHI: Leading consumer goods companies expect lower volume growth even in April-June quarter, blaming it on high base and rural distress that could recover only after a good monsoon and increased farm income. Volume sales show the number of products that consumers put in the shopping basket, indicating actual demand.

The first quarter of FY18 saw most companies post double digit volume growth thanks to a favourable base, which was a result of goods and services tax introduced in 2017, and also improving consumer sentiment, especially in rural India.

Hindustan Unilever hit a six-year high in terms of volume growth, while Dabur and Marico grew the most in over five years. But the Jan-March quarter almost all large consumer goods companies saw volume and sales growth sawed off on account of slowing sales in urban wholesale channels, but primarily reflecting subdued rural sales. Read the rest of this entry »

Moderate demand dampens Q4 results for FMCG firms

Source:, May 07, 2019

New Delhi: A consumption slowdown dampened sales in the March quarter at some of India’s largest consumer goods firms, as a slow offtake of goods in rural markets and an elongated winter forced companies to report moderate volume growth.

India’s largest FMCG firm Hindustan Unilever Ltd., biscuits maker Britannia Industries Ltd., along with Dabur India Ltd., Marico Ltd and Godrej Consumer Products Ltd., announced their fourth-quarter earnings earlier this month. After reporting strong volume growth over the past few quarters, the companies reported subdued numbers for January to March 2019.

Top executives at these firms acknowledged that a moderate rural demand, liquidity crisis in the market and the adverse impact of a delayed summer led to lower growth. Read the rest of this entry »

Small pack sizes, higher grocery bills rule FMCG purchases in south: Survey

Source:, Apr 17, 2019

New Delhi: Shoppers in India’s southern states indulge in small pack sizes, are more experimental, and spend more on an average on their household groceries compared to the rest of India, according to a study by research firm Kantar Worldpanel.

The research firm carried out a monthly consumer survey to study the annual shopping habits of households in south India, mapping the monthly purchases of fast moving consumer goods (FMCGs), their frequency of shopping, and what they spend on. India’s five southern states are more urbanized, economically ahead, better developed and even socially ahead of the rest of the country, Kantar said.

This, it said, has an influence on the shopping behaviour of households in the region.

The five south Indian states account for roughly 24% of overall sale of FMCGs, said K. Ramakrishnan, group head and general manager, Worldpanel division, Kantar in India. At 33%, southern states have a higher concentration of SEC A and B households than the rest of India that has 24% such households. Per capita net state domestic product (NSDP) in the south is well beyond ₹1,30,000 as opposed to a national average of ₹85,229. These states are also more urbanized than the rest of India, data sourced from census 2011 by Kantar shows. Read the rest of this entry »