Moderate demand dampens Q4 results for FMCG firms

Source: LiveMint.com, 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.

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

Source: LiveMint.com, 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.

FMCG growth slower in Q1 on inflation, lower rural purchase

Source: The Economic Times, Apr 18, 2019

NEW DELHI: The fast moving consumer goods industry grew at a slower pace in the first quarter of 2019 compared to the previous quarter, market research firm Nielsen said, as a higher rate of inflation and slowing rural purchases pulled down growth.

The sector grew 13.6% in value terms, lower by 2.3 percentage points from the previous quarter, Nielsen said, with the overall drop in rural growth mainly driven by a slowdown in packaged foods.

Essential items such as packaged atta, refined oil, spices and impulse purchases including biscuits, chocolates and confectionery fell, with the magnitude of the slowdown greater for smaller players in rural areas, it added. Volume growth, at 9.4% in the January-March quarter, contributed 69% to overall value growth, Nielsen said.

The market research firm said growth would be the same as forecast in 2019 — in the range of 11-12%, which is 2 percentage points lower than that in 2018 — and will be determined by macro-economic factors including inflation, GDP growth and rural consumption. Rural purchases will depend on rainfall, non-farm income, and disbursement under the employment guarantee scheme, it said.

India’s consumer goods no longer fast-moving

Source: ETRetail.com, Mar 23, 2019

MUMBAI: India’s overall fastmoving consumer goods (FMCG) market shrank in the 2018 calendar year despite branded products, especially from listed companies, seeing double-digit growth, indicating falling demand for unbranded and unorganised products.

The overall FMCG market by volume declined 1% in 2018 compared with a 7.5% rise a year ago, according to data from Kantar Worldpanel, a global consumer research firm owned by communications and advertising giant WPP.

ITC seeks to get FMCG business to go faster

Source: ETRetail.com, Mar 07, 2019

Kolkata: ITC said it is seeking to expand its FMCG business in double digits next fiscal by quickening the pace of product launches, deepening distribution into the rural hinterland, and building integrated hubs for output, stocking and delivery of items such as cookies, packaged flour and soaps.

Three of the integrated consumer goods manufacturing and logistics (ICML) hubs, which the conglomerate expects would lower operating costs and boost bottom-lines at the FMCG business, should come up in FY20, the Kolkata-based company said. ITC has launched more than 60 new products in FY19 and wants to continue this pace of product introductions next fiscal as well to drive business growth and expand distribution reach to population centres of up to 5,000 people.

ITC’s executive director B Sumant said that the company has already operationalised five ICMLs. These hubs make FMCG products, such as packaged foods and personal-care items, and have warehousing and outbound logistics integrated with the respective output facilities.

ITC said it is in the process of setting up 20 ICMLs across the country as part of its planned investment of Rs 25,000 crore over the next couple of years.

“The ICMLs will ensure cost efficiencies and freshness of products as they will be closer to end-consumers,” said Sumant. “We also want to drive distribution in rural (areas), considering there is growth in those markets – both (by way of) same store sales and new store additions.”

Tracker Nielsen’s data, as of December, showed that ITC’s FMCG sales expanded 20% in rural markets, compared with 16% for the broader industry.

2018 sees fastest annual FMCG growth by volume in more than seven years

Source: ETRetail.com, Jan 29, 2019

MUMBAI | NEW DELHI: Consumer goods recorded their fastest annual growth by volume in more than seven years in 2018, underpinned by the monsoon and improving market sentiment as the trade got used to the goods and services tax (GST) among other macroeconomic factors.

Demand for daily groceries and home and personal products peaked in calendar 2018 with 10.7% volume growth, the most since 2010, according to industry officials citing Nielsen data.

Smaller FMCG firms race ahead, put bigger rivals on notice

Source: LiveMint.com, Nov 26, 2018

When the goods and services tax (GST) was rolled out in July 2017, one question was whether large fast moving consumer goods (FMCG) firms would gain at the expense of the unorganized sector. While it may take a few years before one can have a certain answer, managements of most large listed firms have so far not called out any significant changes on this front.

But an answer to this question could lie elsewhere. Small and regional companies are faring much better than the larger ones in recent quarters, according to retail sales data of the FMCG sector, provided by market researcher firm, the Nielsen Co. While the top 50 firms contributed to 60% of revenue in the 12 months ended September with a healthy 10.6% growth, the tail-end of 48,000 companies grew by a much higher 18.5%. What’s even more interesting is that this growth differential has risen in the past few quarters (see chart). The September quarter saw smaller companies growing at 38% versus 15% for the national firms.