FMCG Industry Sees Slower Volume Growth in June 2024 Quarter

The FMCG industry's volume growth slowed to 3.8% in the June 2024 quarter, hit by macroeconomic headwinds impacting staple food categories. Urban and rural consumption growth dipped, with modern trade still witnessing double-digit growth. Large players outperformed smaller ones amid challenging market conditions.

The FMCG industry witnessed a significant slowdown in volume growth, clocking in at just 3.8% for the June 2024 quarter, according to a NielsenIQ report. The slowdown follows macroeconomic challenges that particularly impacted staple food categories like packaged salt, wheat flour, and palm oil.

Urban consumption growth dipped sharply to 2.8% from 5.7% in Q1 2024, while rural growth also slowed to 5.2% from 7.6% in the previous quarter. Despite this, rural areas outpaced urban areas in terms of volume growth across most of India. Modern Trade maintained double-digit year-on-year growth at 10.9%, though it too saw a slowdown compared to the March quarter.

Traditional trade, such as Kirana stores, also experienced deceleration, achieving only a 3.1% growth compared to 5.6% in the previous quarter. The report noted that large FMCG players fared better than smaller and mid-sized competitors, who struggled to keep prices stable, thereby affecting their volumes.