The FMCG industry continues to experience a downturn; Fall in sales volume in rural markets in September quarter: report

The country’s FMCG industry continued to see a slowdown in consumption in the September quarter, with rural markets seeing a bigger decline in volumes compared to the three months to June, according to a report.

In addition, consumers continued to prefer buying smaller packs as businesses raised prices in response to broader inflationary pressures, according to the report released Thursday by data analytics firm NielsenIQ.

The FMCG industry saw an overall decline in volumes of 0.9% in the September quarter compared to the previous three months.

This is the fourth consecutive quarter with negative volume growth for the industry and is “attributed to double-digit price growth over the past six consecutive quarters,” according to the FMCG Industry Quarterly Report.

Rural markets experienced a volume decline of 3.6% in the September quarter, compared to a 2.4% decline in the June quarter.

“The drop in consumption in rural markets continues to be driven by both double-digit price increases and lower unit growth,” the report said.

During the same period, urban markets recorded a 1.2% increase in volumes.

This growth was led by the food segment with a volume growth of 3.2%, while the non-food segment recorded a decline of 3.6% in the September quarter.

However, the report said that India’s FMCG industry continued to show price-led growth in turnover, growing by 8.9% in the July-September period compared to in the previous quarter.

“Fast-moving consumer goods sales volume and value are above pre-Covid levels” in the March 2020 quarter, as “markets fully opened up after the pandemic,” he added.

Consumers continued to prefer smaller packaging. For the industry, “average package size growth is negative in July-September 2022 as consumers continue to purchase smaller packages,” the report said.

“Most of these new product offerings relate to changes in packaging size. This could be the result of manufacturers working with smaller grammages, as raw material prices are still high,” the report said.

During the September quarter, the decrease in volume of traditional shopping channels such as kirana and neighborhood stores increased by 2% compared to the June quarter.

Modern shopping channels such as hypermarkets, supermarkets and malls “remain resilient with double-digit value (22.2%) as well as volume (11%),” the report said.

According to the report, small manufacturers and the top 400 FMCG players are driving consumption with positive volume growth of 0.5%.

“They also gain in value and volume over the last 2-3 quarters when looked at sequentially,” he added.

Managing Director of NielsenIQ, India, Satish Pillai, said that although inflation pressure continues, there have been shifts in rainfall in rural areas of the country which has also resulted in softer indicators for markets. rural.

This sentiment is also evident in the cautious behavior of retail, he added.

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