NEW DELHI: After an unprecedented decline of 19 per cent in the Jan-Mar quarter, the fast-moving consumer goods (FMCG) industry displayed signs of recovery in the July-September period of 2020 with a 1.6 per cent growth (versus Q3’19), according to Nielsen.
Notwithstanding the visibility of green shoots, however, the market research firm slashed its annual growth outlook for the FMCG industry to - 3 per cent from -1 per cent, stating that the persisting headwinds in the economy at large could stall the sector’s recovery. This is Nielsen’s third revised estimate for the FMCG sector Earlier in January, the FMCG sector was estimated to record a growth of 9-10 per cent in 2020.
But, then Nielsen downgraded its growth forecast in April to 5-6 per cent following the Covid-19 outbreak. Later in July, it said that the growth rate for the FMCG sector in India will at best be flat. Value growth was pegged at 1.6 per cent in the third quarter ending September after the industry witnessed a de-growth of about 17 per cent during the April-June period.
“The revival was aided by businesses opening up with the pandemic reaching stable levels. Store closures came down to an average of three days a month in Q3’ 20 from an average of 9 days a month in Q2’20. After being cooped at home for a long time, consumers also started looking at resuming normal consumption levels,” Nielsen said in its latest report.
As far as geographies are concerned, rural areas continued to drive growth posting 10.6 per cent in Q3 of 2020, while the bigger cities of over one lakh population, including metros, played catch-up. “The rural markets have bounced back handsomely on the back of support provided by the government as well as good agriculture, reverse migration and a lower unemployment rate,” said Nielsen analysts.