The Indian FMCG (fast-moving consumer goods) industry has experienced a significant upswing, registering a remarkable 6.6 percent growth in value, predominantly propelled by a 6.5 per cent surge in volume nationwide, as per the latest NielsenIQ (NIQ) FMCG Quarterly Snapshot for Q1 2024 report.
This quarter's volume expansion has notably surpassed the 3.1 per cent growth recorded during the first three months of the calendar year 2023, reflecting a robust momentum in consumption patterns, the report highlights.
Rural consumption has emerged as a pivotal driving force, consistently outpacing urban growth in Q1 2024. Conversely, urban areas have witnessed a decline in consumer demand, experiencing a 5.7 per cent drop in the quarter under review.
According to the report, the retail sector exhibited distinct dynamics, with the Modern Trade segment showcasing robust double-digit volume growth at 14.7 per cent. Concurrently, Traditional Trade maintained steady growth, with volumes witnessing a 5.6 percent increase in Q1 2024 compared to the preceding quarter (Q4 2023).
At the national level, both the Food and Non-Food sectors have contributed significantly to consumption growth.
In the Food category, volume growth moderated to 4.8 per cent sequentially from 5.3 per cent in Q4 2023, primarily attributed to Staples.
Conversely, Non-Food categories demonstrated accelerated growth, surging to 11.1 per cent in Q1 2024 compared to 9.6 per cent in Q4 2023.
Notably, Rural areas led the charge in Non-Food consumption, recording a robust 12.8 per cent growth rate, while Urban areas saw an 8.4 per cent uptick, primarily driven by Personal Care.
In the broader FMCG landscape, larger companies consistently outperformed their smaller counterparts. However, smaller manufacturers exhibited higher volume growth rates in non-food segments over the past two quarters compared to their larger counterparts.
This trend underscores the challenges smaller players face in maintaining stable prices in the food sector, while non-food categories, despite experiencing notable price hikes, have witnessed increased volume growth, signalling shifting consumer preferences and market dynamics.
The NielsenIQ report underscores the resilience and adaptability of the Indian FMCG industry amidst evolving consumer behaviours and economic landscapes, with rural consumption emerging as a key growth driver and non-food segments presenting new avenues for expansion and innovation.