Rural consumption drives the 6.6% value increase in the Indian FMCG sector, according to the report

Rural consumption drives the 6.6% value increase in the Indian FMCG sector, according to the report

The rise in rural consumption has been consistent and in Q1CY24 it surpassed the growth in urban consumption.

The volume growth for this quarter is higher than the Q1 data from last year, which were 3.1%, according to the research.

According to the NielsenIQ (NIQ) FMCG Quarterly Snapshot for Q1 2024 report, there has been a noticeable rise in the Indian FMCG (fast-moving consumer goods) business, with a 6.6 percent gain in value driven largely by a 6.5 percent spike in volume at the national level.

The research said that the volume increase this quarter above the 3.1 percent rise seen in the first three months of calendar 2023.

The rise of consumption in rural areas has been consistently rising, surpassing that of metropolitan areas in Q12024. The demand from consumers decreased this quarter, falling 5.7% in urban regions.

The Modern Trade category in the retail industry saw double-digit volume increase of 14.7 percent, according to the survey. In the meanwhile, Traditional Trade continued to expand steadily, with volumes rising by 5.6% in Q12024 as opposed to 5.3% in Q42023.

Both the food and non-food industries increased consumption at the national level.

The Non-Food category increased almost twice as quickly as the Food category in the three months leading up to March 31, 2024. Additionally, compared to previous year, a higher number of Food items were bought, but a higher number of bigger packs of Non-Food goods were bought.

Because to Staples, the Food sector's volume growth fell sequentially to 4.8 percent from 5.3 percent in Q42023. On the other hand, the Non-Food categories had an improvement, growing by 11.1 percent in Q12024 as opposed to 9.6 percent in Q42023. Rural regions, headed by personal care and home care, grew at a rate of 12.8 percent (as opposed to 9.8 percent in Q4'23). Non-food consumption in urban areas increased by 8.4% in Q12024 compared to 5.8% in Q42023, with personal care consumption growing at the fastest rate.

Larger businesses routinely outperformed their smaller competitors in the FMCG industry as a whole. In contrast to bigger companies, smaller manufacturers have shown higher volume growth rates in non-food areas during the last two quarters. This pattern may be explained by the challenges smaller competitors have in keeping food costs steady, whereas non-food categories have witnessed higher volume growth in spite of large price increases.

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