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FMCG industry record 9.4% growth in Jan-March, rural continue to perform and metro cities recover

IBEF:  May 13, 2021

According to Nielsen, the Indian FMCG industry grew 9.4% in the January-March quarter of 2021, supported by consumption-led growth and value expansion from higher product prices, particularly for staples. The rural market registered an increase of 14.6% in the quarter and the metro markets registered positive growth after two quarters.

In the January-March 2021 quarter, revenue growth in the Fast Moving Consumer Goods (FMCG) industry from conventional sales channels climbed to double digits, while development in e-commerce normalised to single digits. NielsenIQ’s Retail Intelligence team released FMCG Snapshot for Q1 2021 and stated, “The FMCG industry in India has developed positive growth, growing at 9.4% in the quarter ending March 2021, up from 7.3% in the previous quarter (October-December 2020) over the same quarter last year.”

NielsenIQ South Asia Lead Mr. Diptanshu Ray said, “This is bolstered by categories such as staples, essential non-foods, and indulgences. However, he advises that the beginning of the second quarter may generate some future directions, as the situation in the country is dynamic.” The report added, “Now that lockdowns have reappeared, and with last-mile delivery on the surge, the e-commerce channel will remain dynamic.”

As per the report, In January-March 2021, metro cities experienced 2.2% growth. Rural markets maintained their growth momentum, increasing by 14.6% in the March 2021 quarter after growing by 14.2% in the previous quarter. Nielsen predicts a good monsoon this season, making it the third consecutive year of rural excitement.

This boosted agrarian household earnings and maintained rural sentiments upbeat. Furthermore, rural-centric schemes such as increased funding for MGNREGA, wage increases, and increases in MSP of key crops have played a significant role in keeping FMCG consumption in rural markets resilient. “We have also seen large and medium-sized companies recovering in Rural India,” it added.

Nielsen stated that consumption growth was consistent for both foods and non-foods. The price increase boosted the food basket, particularly in staples such as packaged tea and edible oils. Consumption growth in non-staple food categories such as ketchup, coffee, cheese, and biscuits has been observed as a result of enhanced in-home consumption.

According to the report, there are signs of personal care category growth resumption, while the Snacking and Impulse Foods baskets have maintained their growth trajectory.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.