Festive sales lift FMCG Industry growth to 21% in October


It has been reported that The India’s consumer goods market grew 21% in October from a year ago, helped by higher sales of packaged food, commodities and discretionary categories as the home care segment slowed.

All categories grew between 13% and 35% while home care fell 8%, according to the latest report by Bizom, a sales automation firm that transacts with 7.5 million retail stores. Sales was also driven by an early festive season, which boosted kirana orders from last year when the festive season started in November.

“We had a very good festive season,” said Deepak Iyer, President, India, Mondelez International. “There is a positive consumer sentiment right now for a few reasons–uptake in vaccinations, the pent-up demand, greater mobility to socialise and fundamentally, in our country, a lot of people want to just celebrate”, the company said.

The optimism comes amid increasing inflationary pressure that’s forcing companies to hike prices. Palm, crude and tea prices have increased by more than 50% since a year ago while packaging material prices increased 30-35% over last year.

Mobisy Technologies

According to Bizom, commodities saw the highest growth at 35% followed by beverages, which grew 22%. “As homes load up on sweets and savouries during the festival season, we see strong demand for commodity products, especially edible oils. Also, the reduction in import duties on cooking oils is helping the easing of prices,” said Akshay D’Souza, chief of growth and insights at Mobisy Technologies, which owns Bizom.

Most companies highlighted in their quarterly earnings announcements that demand in cities has risen, with the reopening after Covid closures leading to recovery, but rural growth has tapered due to a high base.

Godrej Consumer Products

“In the first Covid lockdown, cities were closed but business in rural areas continued,” Godrej Consumer Products managing Director Sudhir Sitapati told investors last week. “So, you have different comparators.

When I look at data, I don’t see a specific rural slow down, even though optically the rural numbers are lower.

Both in Nielsen and our own numbers, rural is now not going as fast as urban, but I don’t see this when I adjust for a two-year period.”

Fast Moving Consumer Goods (FMCG)

Compared with September, FMCG sales grew 5.4% last month despite a 2% reduction in the number of kirana stores, according to Bizom.

While cities grew 6%, growth in villages was 5% in October. Companies, though, are still bullish on the rural market driving higher growth.

In its investor call, Dabur said it saw pressure from the rural and wholesale segment in September and October. (The Economic Times)