FMCG industry’s recovery strengthened in Jan-March 2021, backed by staples and essential non-foods
India’s FMCG industry, that is the fast moving consumer goods, grew 9.4% year-on-year in the quarter ended March 2021. This came about on the back of staples, essential non-foods and indulgence categories, and rural India.
Experts believe the beginning of the second quarter may bring some new dimensions as the situation across the country is dynamic. Rural markets, as per ET, grew 14.6% year-on-year in the quarter, while metro cities grew 2.2% after two quarters of decline. Traditional trade channels grew in double digits, while e-commerce normalized down to single digits.
A report stated that buoyancy in rural markets continued in January-March quarter with 14.6% up from 14.2%, in the previous quarter. It said this year is expected to have a good monsoon making it the third consecutive year of rural rejoice. The report flagged that increased focus on MGNREGA in terms of bigger outlay, rise in wages and increase in MSP of key crops have been instrumental in keeping consumption in rural markets buoyant.
Nielsen IQ pointed out that input costs led price growth across staples, rural India contributed to build on to growth, retailers rejigged assortments concentrating on spread than stock weight, and traditional trade continued to grow with the ecommerce sales peak tapering off. “The consumption growth was visible across segments, with uniform consumption for both foods and non-foods in the quarter. The foods basket got a boost from an uptick in pricing, mainly in staples like edible oils and packaged tea. Consumption growth was witnessed for certain categories in non-staple foods categories as well (such as biscuits, coffee, cheese, and ketchup) because of increased in-home consumption.”
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On the other hand, the non-foods categories saw a dip in average pricing, because of increased contribution of larger packs in the consumer basket and rise in consumer promotions in essential home care and personal care categories. The report highlighted that traditional trade channels continued their growth momentum in the quarter ending in March at 11% versus a year ago, after 8% growth in the December quarter. Among organized channels, quarter on quarter recovery was witnessed in modern trade.