FMCG sales growth rate falls by a third in April-June quarter: Kantar and NielsenIQ data

Daily household products and groceries are not selling as fast as they were last year, showed the latest Kantar and NielsenIQ data.

The sales growth rate nearly halved by volume and fell twothirds by value (revenue) during the June quarter over the yearago period as companies slashed prices and consumers cut back on packaged food purchases amid severe heatwave followed by deficit rainfall.

Volumes in the fast-moving consumer goods (FMCG) market increased 4.6%, down from the 8.2% growth recorded last year, according to Kantar. NielsenIQ said the sector’s value growth was down to 4% while volumes expanded 3.8% in the second quarter.


This was compared to a growth of 12.2% in value and 7.5% in volumes a year ago. Volume indicates the number of products consumers put in their shopping basket.

The slowdown was largely led by food and beverages that grew 4.7% in the quarter, compared to 10.1% a year ago, said Kantar, which tracks household consumption of both branded and unorganised products, including those sold loose.

“The big food categories such as noodles, biscuits, and salty snacks have all seen considerable slowdown in the quarter. It looks like the snacking sector boom that we saw since the pandemic is now coming to an end,” said K Ramakrishnan, managing director-South Asia, worldpanel division at Kantar. Kantar data is heavily skewed toward the food and beverages segment that accounts for nearly 70% of overall volume of products covered and has a higher proliferation of items from the unorganised end of the business.

Nielsen, which covers retail store sales of packaged goods, said a moderation in staple categories such as salt, atta, and palm oil resulted in the overall food sector growing just 2.4% by volume compared to 8.5% a year ago.

“Rural markets are still coming out of that phase where it was lagging urban,” Varun Berry, vicechairman at Britannia, told analysts recently. “And there’s a little bit of downtrading happening in some markets as well. So, our performance this quarter, as far as the Hindi belt is concerned, has been average. Things are looking a little better, still not out of the woods completely, but definitely better than earlier.”

Urban Pressure:
Two quarters ago, sales growth of FMCG in villages outpaced that of cities for the first time in nearly three years. While rural growth has been stable since, urban demand has started seeing a significant downturn.

However, companies said demand on a sequential basis is encouraging. Rohit Jawa, managing director at Hindustan Unilever, said it would be tempting to look at things quarter by quarter, but the market growth has improved gradually over the last one year.