Within the sector, household and personal care products contribute a significant 50 per cent share, followed by food and beverages at 31 per cent and healthcare at 19 per cent. Despite facing challenges like inflation, raw material cost and fluctuating weather patterns in FY24, the industry has witnessed a decent performance, driven by consumer demand, emphasis on premium products and rising product prices.
Urban India currently contributes around 65 per cent of the total FMCG revenue, while rural markets hold immense potential with a 35 per cent share. Good harvests, normal monsoon and government spending are expected to boost rural demand recovery in FY25, presenting a significant growth opportunity. The companies are actively focusing on expanding distribution networks and marketing strategies in rural areas to tap into this rising disposable income and growing aspirations.
Several key trends are shaping the future of the FMCG sector in India. Premium quality is a significant driver, with consumers increasingly opting for superior products that promote sustainable living, cater to specific needs, and enhance their shopping experience. Sustainable living is becoming a priority for both consumers and companies, with a growing demand for eco-friendly products and responsible sourcing practices.
This story is from the July 1, 2024 edition of Dalal Street Investment Journal.
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This story is from the July 1, 2024 edition of Dalal Street Investment Journal.
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