India’s FMCG industry grew by 4% in value for the April-June quarter, down from 6.6% in the previous quarter, according to NielsenIQ data.

FMCG volumes grew 3.8% in the April-June quarter, slower than the 6.5% growth in the January-March quarter and 6.4% in the October-December quarter of FY24. With inflation easing, price growth was minimal, at 0.2%.

Both urban and rural areas experienced slower consumption, with rural volume growth at 5.2% compared to 7.6% in the previous quarter. This is the second consecutive quarter where rural growth surpassed urban growth, which was 2.8%, down from 5.7%.

NIQ attributed the slowdown in volumes to macroeconomic challenges. This data indicates that the slowdown in FMCG consumption growth is mainly due to issues in the food segment.

Food volumes grew 2.4% in the quarter, down from 4.8% previously, due to slower growth in staples like packaged salt, atta, and palm oil. Non-food categories saw volume growth of 7.6% in Q4 FY25, down from 11.1% in the previous quarter.

Consumer demand for personal care and home care items declined in both urban and rural areas.

In urban markets, personal care volume growth is 5.2%, down from 9.7% in Q4. In rural areas, it’s 8.3%, down from 10.6%. Rural homecare categories like laundry and utensil cleaners also saw reduced consumption.

Summer-specific items like soft drinks, packaged water, prickly heat powder, and glucose powder saw strong growth compared to a year ago.

Soft drinks grew at twice the rate of FMCG overall, with a 9.2% volume increase, down from 10.8% in Q4.

FMCG companies are optimistic about a revival in volumes in the coming months due to expectations of better monsoons and improvements in rural areas.

Dabur India’s CEO, Mohit Malhotra, noted that volumes improved in July and expects continued growth in the next quarters.

Marico’s MD and CEO, Saugata Gupta, shares a similar outlook, citing stable retail inflation, a healthy monsoon, and government support for rural revival as reasons for optimism.

Tired of missing hot stocks? Unicorn Signals provides powerful tools like stock scans and more help you make informed trading decisions. Download now and take control of your portfolio!