FMCG industry grows 7.3 pc in Oct-Dec, rural sales up 14.2 pc
FMCG industry grows 7.3 pc in Oct-Dec, rural sales up 14.2 pc

The FMCG industry in India has recorded a value growth of 7.3 percent in October-December quarter helped by consumption-led recovery during the festive period and increase in sales from traditional as well as organised trade. 

“The metro market witnessed significant recovery, while rural India, which is performing well after a quick recovery from the pandemic, continued to be buoyant and witnessed double-digit growth during the quarter under review,” according to data analytics firm Nielsen.

Large manufacturers also bounced back with consumption-led growth during the quarter, while the small ones clocked double-digit growth amid rise in consumption, said the FMCG Snapshot for Q4 2020 released by NielsenIQ's Retail Intelligence team.

"The Fast Moving Consumer Goods (FMCG) industry in India, saw a bounce back with a growth of 7.3 percent in the quarter ending December 2020. This growth in traditional trade (grocer, chemist, paan shops etc.) and organised trade (modern trade and e-commerce) was driven by consumption," it said.

The festive period-led growth uptick in November, was sustained in December also, it added.

In 2020, the FMCG Industry had a value degrowth of 2 percent.

In October-December quarter, products such as liquid toilet soap, antiseptic liquid, floor cleaner, toilet cleaner in the 'Hygiene & Immunity building' categories continued a high-value growth of 46 percent in comparison to the corresponding quarter.

"The 'home and personal care' basket made a consumption-led recovery (5 percent volume growth vs year ago), while Food categories saw a 10 percent growth riding on boost in consumption as well as a price increase in some food baskets," it said.

This growth recovery was widespread in the food basket, including 'Staple Foods' that grew 18 percent in the December quarter, vs a year ago.

"While the Indian consumer has had a tough year, the last quarter of 2020 has seen a recovery in consumption as economic activities have started moving back to normalcy (opening up). The festive season brought a further boost to the sentiments and since then there has been a visible uptick in growth for the industry resulting in an increase in consumption across staples, and home and personal care," said NielsenIQ Lead, Retail Intelligence, India Diptanshu Ray.

The Indian metropolitans, with more than a million population, have come back into the positive growth zone after two-quarters of decline and reported 0.8 percent growth in October-December quarter.

While, rural markets continued to grow in double digits - accelerating to 14.2 percent in the October-December quarter, from 10.6 percent in the July-September quarter.

"This sharper recovery is on the back of favourable agricultural sector performance, government action towards rural employment generation, and as rural India had a lesser impact of the pandemic," it added.

Large FMCG manufacturers bounced back with consumption-led growth but small manufacturers, having an annual sales turnover less than Rs 100 crore, continued to exhibit double-digit growth of 16 percent in the December quarter.

Meanwhile, e-commerce is stabilising at a consumption level higher than pre-COVID. The e-commerce spurt is more prominent in the metros, it said adding that traditional trade channels consolidated its share in the metro markets.

"Traditional trade channels continued their growth momentum in the December quarter (8 percent vs year ago), after a 3 percent growth it clocked in the September quarter. Within organised trade, modern trade channel has posted a strong recovery to (-) 2 percent in the December quarter, as against a (-) 15 percent in September quarter," it added.

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