NEW DELHI: India’s fast-moving consumer goods (FMCG) sector is set to take a heavy beating this year as households continue to squeeze spending and manufacturing activity remains a challenge due to the strict lockdown. From a high of 13.8 per cent growth in the first quarter of 2019, the ‘slow-moving’ sector slid to a three-year-low of 6.3 per cent in the January-March quarter of 2020, finds Nielsen. The market research firm has also lowered the FMCG growth forecast for the year by half against its earlier prediction of 9-10 per cent.

“Macroeconomic indicators had exhibited early signs of recovery in January and February. However, the onset of Covid-19 and the subsequent lockdown have impacted the trend in March 2020 impacting the overall quarter,” said Prasun Basu, South Asia Zone president, Nielsen Global Connect.In March, volumes grew a mere 0.5 per cent, while the sector clocked 4 per cent value growth even as January and February (Pre-Covid) saw modest 7.5 per cent growth.

The initial recovery in January and February 2020 was driven by food categories. In March, there was a significant slowdown across FMCG categories, more pronounced in non-food categories, stated Nielsen India. “Large manufacturers with an annual turnover of more than Rs 600 crore, continued to see volume growth in March and are being resilient,” said Sharang Pant, lead (retail vertical and RMS, Nielsen Global Connect. He said May may be a tough month as companies work on fixing supply chain issues and labour challenges. Small players with an annual turnover of less than Rs 100 crore, however, grew at 5 per cent, while the medium-sized firms were the most impacted in March, Pant said.