FMCG sees 6.5% growth; rural demand overtakes urban: NIQ
NEW DELHI: The Indian FMCG industry experienced a 6.5 per cent growth in volume terms at a national level in the January-March period of 2024, with rural consumption surpassing urban for the first time in five quarters, according to consumer intelligence firm NielsenIQ.
Both food and non-food sectors contributed to the growth in consumption in the first quarter of 2024, but non-food saw almost double the growth as compared to food, NielsenIQ (NIQ) said in its quarterly snapshot for Q1 2024.
The FMCG industry has experienced a 6.6 per cent growth in value, attributed to a 6.5 per cent increase in volume at an all-India level. The volume growth for this quarter was higher than Q1 2023, which stood at 3.1 per cent, it added.
NIQ head of customer success India, Roosevelt Dsouza, said, “The FMCG industry’s growth continues to be driven by consumption trends in Q12024 with rural areas surpassing urban growth for the first time in five quarters.”
Notably, Dsouza said home and personal care (HPC) categories have outperformed food categories. While food categories witness higher unit purchases, the growth in HPC is largely driven by the popularity of larger pack sizes.
The quarterly snapshot pointed out that there is a consumption slowdown in urban and modern trade, while there is an uptick in rural and traditional trade.
“Rural consumption growth has gradually picked up pace and has surpassed urban (growth) in Q12024. Urban sees sequential decline in consumer demand leading to 5.7 per cent this quarter,” NIQ said.
Within the retail sector, modern trade continues to exhibit strong double-digit volume growth at 14.7 per cent. Traditional trade, on the other hand, experienced stable growth, with volumes registering 5.6 per cent growth in Q1 2024, compared to 5.3 per cent in the previous quarter (Q4 2023), suggesting that traditional retail channels are holding their ground, it added.
According to the snapshot, at a pan India level, both food and non-food sectors contributed to the growth in consumption but non-food saw almost double the growth as compared to food.