Higher urban spending helps the FMCG sector rebound, NielsenIQ report

3 Aug 2022 , 08:13 AM

According to a report, India’s FMCG sector experienced a value growth of 10.9% in the June quarter, boosted by increased consumption even if the rural markets remained weak in non-food segments.

According to NielsenIQ, a data analytics company, the total consumption has picked up as unit volume climbed sequentially in the April-June quarter. On an annual basis, it saw negative growth of 0.7% in the most recent quarter under review.

While the rural markets experienced a negative increase of 2.4% over the period of April to June 2022, the urban markets recovered with positive volume growth of 0.6%.

“Along with the price-driven expansion, the industry also notices significant volume momentum. The volume increase, which was negative 4.1% in the January-March quarter, has somewhat improved to negative 0.7% in the April-June quarter “In its FMCG Quarterly snapshot report, NielsenIQ stated.

According to the report, the FMCG sector had a value increase of 10.9% in the quarter ending in June.

The most recent trend outperforms the previous two-quarters of declining consumption and emphasizes the beginning of cautious optimism among consumers.

The survey claims that as consumers switched to smaller pack sizes and producers reduced the weight of major pricing packs, FMCG consumption recovered in the most recent April—June quarter.

Even though there was a slight improvement from the previous quarter, non-foods still exhibit a negative volume growth. According to the research, there was negative growth of 13.8% in the June quarter compared to negative growth of 20.4% in the March quarter. It also stated that volume decline for medium and large manufacturers persisted.

In addition, non-essential personal care categories showed volume growth of over 40%, helped by consumers going out for work and entertainment as they returned to their regular schedules and the summer season.