No growth for FMCG companies in 2020: Market researcher Nielsen

NEW DELHI: The fast-moving consumer goods (FMCG) sector is expected to witness flat growth in 2020 as covid-led lockdown in the second quarter of the year battered demand and severely hit trade channels, according to market researcher Nielsen.

This is the second revision of its annual growth forecast for the sector that has seen a demand surge for categories such as as packaged wheat, biscuits, and soaps as India stayed at home and spent more on essentials. Initially, Nielsen had predicted a 9-10 per cent growth for the sector that was already struggling to grow sales in rural markets.

However, it had  later revised its forecast downwards in April to 5-6 per cent for the calender year.
Nielsen maintained that April and May dragged growth rates for the sector, with June seeing some signs of recovery. June registered 4.5 per cent year-on-year value growth, while April and May fell 27 per cent. Growth in rural outpaced that in metros. Overall, in the first half of the year (January-June), the industry growth slipped to negative with 6 per cent decline.

““Keeping these unprecedented dynamics in the market, we have revised the outlook and are expecting the year to be in the flat growth range (-) 1 per cent to 1 per cent for branded FMCG industry in India, as against a 5-6 per cent growth projected earlier this year,” said Prasun Basu, South Asia Zone president, Nielsen Global Connect, said. 

Nielsen expects  the fourth quarter (October-December) to deliver better growth driven by festival season 
demand and depending on how effectively India lifts further restrictions. “We expect some recovery in the July-December period.  We are expecting some growth in third quarter ended September, but we are expecting even better growth in Q4, as festive time will be more in swing in Q4,” Basu added.