FMCG market likely to grow 7-9% in CY23: Report

New Delhi, May 11 (KNN) The FMCG market is expected to grow 7-9 per cent year-on-year in calendar year 2023, research and insights firm NielsenIQ said on Wednesday.

The revival of the domestic fast-moving consumer goods (FMCG) market is led by the rural areas, the report said.

It added that the growth is seen to be volume-driven rather than price-led, which was the trend earlier. In CY22, the FMCG sector had witnessed a growth of about 7-8 per cent led by a spate of price hikes which aided the overall sales growth.

The NielsenIQ report pointed out that that the consumption revival in rural areas that has been playing a significant role in the revival of the sector has been triggered by a moderation in commodity inflation, reflected in a lower price-led growth in the March quarter and an uptick in volume sales.

Price-led growth, said NielsenIQ, dropped to 6.9 per cent in the March quarter versus 7.9 per cent in the December quarter.

While volume growth came in at 3.1 per cent in the January-March (2023) period, after five quarters of decline. Overall sales growth or value growth for the March quarter was 10.2 per cent, Nielsen said.

NielsenIQ report highlighted that in terms of urban versus rural, the hinterland had a positive consumption growth of 0.3 per cent, which is the “first time after six quarters”, while urban areas maintained momentum with a growth of 5.3 per cent in the March quarter.

Roosevelt D’Souza, India customer success leader, NielsenIQ, said, “ The positive consumption growth in rural India in the March quarter is heartening. Urban India continues to be the growth engine for the sector, with organised retail seeing a high double-digit growth in modern trade.”

“For the first time since last year, we have also see a turnaround in traditional trade, primarily driven by grocers,” he said.

Continuing the previous trends, food products continued to drive consumption with a 4.3 per cent growth in the March quarter, helped by an uptick in the staples’ category. “Consumers continue to rationalise spending overall within non-food in home care and personal care,” NielsenIQ added.  (KNN Bureau)