A FLEXIBLE MANOEUVRE

Facing moderate growth, FMCG flexes its marketing muscle with increased advertising and promotional spending

The fast-moving consumer goods (FMCG) industry is expected to witness a more subdued growth in 2024 compared to the past two years, although it is still anticipated to expand at a moderate pace. The Indian FMCG sector, a key player in the nation's economy, is expected to achieve a value growth of 4.5% to 6.5% in 2024, according to NielsenIQ's latest projections. This growth projection represents a significant deceleration compared to the robust 9.3% growth in 2023 and 8.4% in 2022.

NielsenIQ notes a sequential deceleration in the rate of consumption growth, both in volume and value, across the entire country, including urban and rural markets. In the urban sector, volume growth during the October-December quarter was 6.8%, down from 10.2% in the previous quarter. Rural volume growth stood at 5.8%, compared to 6.4% in the July to September quarter. The industry’s value growth in the quarter was 6%, attributed to a 6.4% rise in volume, indicating positive consumption patterns at an all-India level.

FMCG companies have raised concerns about a persistent slowdown in rural demand, citing factors such as erratic monsoons and a normalization post-Covid. Krishnarao Buddha, Senior Category Head of Marketing at Parle Products, emphasized the slowdown in both rural and urban markets. “There is a definite slowdown,” Krishnarao Buddha, Senior Category Head, Marketing at Parle Products said. “Both rural and urban markets have slowed down. Errant monsoon in select geographies due to the El Niño has impacted slowdown in consumption. There is also a normalizing effect post-Covid,” Buddha elaborated.