NEW DELHI: India’s FMCG industry has grown in double-digits to 17.5% for the calendar year of 2021, over last year (2020), according to a Nielsen report. There is, however, a consumption slowdown, with rural markets facing the heat.
The Q4 2021 quarter saw 9.6% growth for FMCG in India over last year primarily based on the double digit increase in prices for three successive quarters, says NielsenIQ’s Q4 2021 FMCG Snapshot report.
But the industry witnessed a consumption volume degrowth of 2.6% in the fourth quarter due to inflationary pressure, and other macro-economic factors in the country.
“The price increase continues to impact small manufacturers where the number of small manufacturers (with turnover below 100 crore ) dropped by 13%, due to the difficulty of continuing operations with higher costs,” the report adds. Large and Medium manufacturers stayed stable.
Diptanshu Ray, South Asia Cluster Lead, NielsenIQ says The country’s macro-economic factors continued to witness softness during the quarter. “Within this environment, the calendar year has seen a double-digit growth, though there has to be a watch out for continued consumption degrowth impacted by price increases.”
The consumption slowdown continues to be more accentuated in rural markets with -4.8% consumption degrowth, while urban markets are comparatively better at --0.8%. Interestingly, the overall number of stores selling FMCG products in India grew at a CAGR of 4% over the period of 2019 to 2021, with the addition of 800,000 stores in the country, of these 60% opening in Rural India, according to NielsenIQ’s Retail Establishment Survey in Q4 21.
Rural faces the heat
The consumption slowdown continues to be more accentuated in rural markets with -4.8% consumption degrowth, while urban markets are comparatively better at 0.8%