FMCG sector in FY25: “Will good monsoon and bumper Rabi crops alleviate the slowdown in the?”

New Delhi, 7th April 2024: During the last quarter of the financial year 2023-24, which is from January to March, there was a slight slowdown observed in the FMCG sector. However, the industry remains hopeful that the sector’s value could witness mid to high single-digit growth, i.e., between 5 to 9 percent. There could be a surge in sales in the current financial year 2024-25 as well.

The Fast-Moving Consumer Goods (FMCG) sector is hopeful that there could be a surge in its sales in the current financial year 2024-25. This is because there is an expectation of good rainfall and a good Rabi crop this time. This will bring a decent amount of money into the hands of rural consumers and they may increase their spending on FMCG products. Particularly, there is an expectation of increased profitability due to a significant reduction in input costs. The rural demand had been sluggish for several quarters but it has picked up pace during the period from January to March. Some FMCG companies even say that the gap between urban and rural markets has significantly narrowed. Rural India contributes about 35 to 38 percent to FMCG
sales.

Listed FMCG firms like Dabur, Marico and Godrej Consumer Products say that the increase in profits will help them expand their businesses. They can now increase spending on advertising and other promotional activities. During the March quarter, there was a slight uptick in sales for brands like Saffola and Parachute, owned by Marico. The company mentioned that FMCG demand during the March quarter was better compared to previous quarters. The response from both urban and rural consumers remained somewhat consistent. On the other hand, Godrej Consumer Products noted that consumer response remained lukewarm during the March quarter. However, the company recorded high single-digit growth in the home care and personal care segments. According to Godrej, the atmosphere in the Indian FMCG sector is currently a bit subdued, but there is hope for improvement in the current financial year.