Consumption in rural India hits a 7-year low

Source: LiveMint.com, Oct 18, 2019

Rural household consumption slumped to a seven-year low in the September quarter, in a sign that the prolonged agrarian distress and near-stagnant rural incomes have eroded demand for consumer goods, market researcher Nielsen said.

Consumption of packaged consumer goods by rural households also grew at a slower pace than in urban areas for the first time in seven years, Nielsen said in a quarterly report on Thursday.

The rural economy has been plagued by falling crop prices and declining incomes, resulting in a severe slump in demand. Falling income has not only singed farmers but also landless wage workers, who together account for two-thirds of all rural households.

FMCG firms taking small, micro steps to beat rural sales slump

Source: LiveMint.com, Oct 06, 2019

New Delhi: It’s been months since Phool Bai, the wife of a daily wager from Nateran village in Madhya Pradesh’s Vidisha district, last purchased toothpaste. The shop from which she purchases her monthly household supplies has stopped selling goods to her family on credit over past dues, forcing her to cut down to the bare essentials.

In India’s rural hinterland, Phool Bai’s story isn’t unique. Thousands of vulnerable low-income households are falling back into extreme poverty. They are at the heart of a rural demand slump witnessed by packaged consumer goods makers. India’s villages account for more than 35% of overall FMCG sales.

Festive season sales to be good for FMCG but next 6 months crucial for consumption revival: Nestle

Source: ETRetail.com, Oct 01, 2019

LUDHIANA: FMCG major Nestle India expects the ongoing festive season sales to be good for consumer-centric companies but added that the next six months would be crucial for revival of consumption.

The company is still keeping an eye on short- to medium-term consumption trends, Nestle India Chairman and Managing Director Suresh Narayanan said.

According to him, while the overall demand sentiment is yet to improve, the government’s recent move to reduce corporate taxes will help boost earnings of companies and stimulate the investment cycle in India.

“People are looking forward to the festive season, there is a bump that companies will get. Most consumer products companies have got expectation out of festive season. For me, what needs to be watched is the short- to medium-term which is really the next six months, how that evolves,” Narayanan said at a media roundtable here.

Worst FMCG show likely in 15 years: Credit Suisse

Source: The Economic Times, Sept 19, 2019

India’s consumer goods industry could post its slowest pace of revenue growth in a decade and a half this financial year, Credit Suisse said, even as category leaders Dabur and Godrej Consumer sounded more optimistic about sales revival in the second half of FY20.

Liquidity constraints and lower farm incomes will likely affect revenues at India’s leading consumer companies, which Credit Suisse said had harnessed savings from the GST rollout and fuel costs to expand operating margins and earnings over the past few years.

FMCG firms swing into action with measures to banish slowdown blues

Source: The Hindu Business Line, Sept 11, 2019

New Delhi: FMCG companies are taking a host of measures to increase sales as well as help the trade channel tackle the liquidity crunch, in a bid to tide over the current slowdown.

Depending on their product portfolio, industry players have intensified consumer promotion offers, are giving higher margins to the trade channel and have also stepped up strategic in-store marketing spends especially for the festival season which starts with Onam.

Mohan Goenka, Director, Emami Group, told BusinessLine, “We are focusing on consumer promotions and offering higher margins to the trade channels for the two months of festival period. While margins vary depending on the type of channels — general, wholesale, retail or modern trade — on an average we are offering 1-2 per cent higher margin compared to last year. Depending on the results, we may look at extending it beyond this two-month period.”

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.

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

Source: LiveMint.com, 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.