New Delhi, February 06

At a time when rural consumption is outpacing urban consumption, the Indian FMCG industry witnessed some early signs of recovery in December quarter supported by festival consumption and small packs. As per the latest data released by NielsenIQ, the FMCG industry recorded a growth of 10.6 per cent in value terms in the December quarter (Q4’24) compared to same quarter previous year. This growth was aided by 7.1 per cent volume growth and 3.3 rise in prices.Rural volume growth was pegged at 9.9 per cent nearly 2 times faster than that of urban volume growth at 5 per cent.

The industry had recorded 6.5 per cent value growth in the December quarter in 2023.

“For the first time in four quarters, we have observed a combination of consumption and pricing driving overall FMCG growth. India’s FMCG sector is poised for robust growth, with rural markets continuing to lead the charge, outpacing urban consumption.,” said Roosevelt Dsouza, Head of Customer Success – FMCG, NielsenIQ India. He added small packs which are more affordable from small and medium manufacturers is boosting consumption. Despite a slowdown in the top eight metros, e-commerce continues to disrupt buying behaviour.

The insights and market research firm pointed out that despite slowdown witnessed in urban consumption there was sequential improvement seen in both urban and rural demand. It noted that urban volume growth increased from 2.6 per cent in September quarter to 5 per cent in December quarter. At the same time, rural volume growth increased to 9.9 per cent from 5.7 per cent in the previous quarter.

Traditional Trade volumes also saw improvement and grew by 8.1 per cent in Q4 2024, compared to 3.9 per cent in Q4 2023. Modern Trade however saw marginal degrowth.

Despite inflationary pressures and price hikes , food consumption growth rose to 7 per cent in Q4’24, up from 3.4 per cent in Q3’24. This was driven by increased volume in staple categories such as Edible Oils, Palm Oil, and Packaged Atta.

Home and personal care categories, consumption growth also saw an uptick, reaching 7.3 per cent in Q4’24 compared to 5.4 per cent in Q3’24, with higher consumer demand observed in both urban and rural areas, it added.

“ Small manufacturers are outpacing larger players in driving consumption, fuelled by consistent volume growth in both Food and HPC categories. While the giants are seeing slower value growth, they are still growing at twice the rate compared to Q3’24,” NielsenIQ added.