FMCG makers hopeful of rural growth in coming qtrs
NEW DELHI: Leading fast-moving consumer goods (FMCG) makers are witnessing encouraging trends from the initial pickup of their winter products portfolio, expect consumption to accelerate further as mercury dips, making them hopeful for growth from the rural areas.
Makers such as Dabur, Emami and Marico are witnessing pickup in their winter-specific products portfolio ranging from skin care products to immunity products such as chyawanprash and honey.
Moreover, the makers are also expecting rural sales to bounce back in the coming quarters helped by a good harvest and softening of general inflation. While winter products are doing well on new-age channels such as e-commerce and modern trade channels.
Marico chief operating officer (COO) India Business and chief executive officer (CEO) New Business Sanjay Mishra said winter has always been a crucial season for some products in their portfolio like body lotion and the Saffola Immuniveda range, especially from the northern region.
“This year again we have seen consumption going up for both of these as we enter winter,” Mishra told PTI.
Marico has witnessed uptake and consumer demand picking up in the winter hair oil category in modern trade channels and e-commerce platforms.
Similarly, in the last couple of months, Marico has witnessed double-digit offtake growth for its body lotion compared to the same period last year.
“Therefore, this winter season we are confident to see over 50% Y-o-Y increase in demand growth in the body lotion category. Saffola Honey & Saffola Immuniveda Chyawanprash have also traditionally seen upwards movement in this season,” Mishra added.
Dabur India Limited COO Adarsh Sharma said the festive season this year has brought a “little glimmer of hope” and the company has built a pipeline for its winter-specific products like Dabur Chyawanprash, Dabur Honey and the Gulabari winter range of skin care products.
“While these are still early days of winter, the initial demand for our winter products is steady. If it turns out to be a good winter, we should see demand accelerate further,” said Sharma.
Though demand in rural markets continues to lag urban markets but he said, “With good harvest this season, we expect rural growth to bounce back in the coming quarter.”
Emami Sales-CCD president Vinod Rao said, “Winter portfolio has witnessed comparatively a good loading this year in September and October in anticipation of a good winter season.”
Rao expects Emami’s winter brands to perform well in the rural and wholesale channels, despite the inflation- led demand challenges.
“We are witnessing a higher momentum in our LUP and mid-priced packs, which we expect to contribute significantly to the wholesale and rural channel,” he said.
Emami’s winter portfolio is growing well in organised channels such as Modern Trade and e-commerce.
“Large pack contribution has also grown significantly over last year same period,” Rao said.
Nuvama Group Executive Director, Institutional Equities Abneesh Roy said key FMCG companies like HUL, Dabur and Emami having a larger play in the segment as skin creams would also get benefit in the portfolio from the recent crash in palm oil and crude oil prices.
However, Roy also added structurally he is not seeing a recovery in rural demand. Though he also added still base is soft across companies in H2 ( second half) so optically demand should look better in rural in comparison to H1 (first half).