MUMBAI: The fast-moving consumer goods industry recorded a 10.6% growth in sales value in Oct-Dec 2024, the highest in four quarters helped largely by price hikes and a festive quarter which fuelled spending on staples, snacks and other packaged goods, data released by market research firm NielsenIQ on Thursday showed.
Consumers, however, moved to smaller packs to tackle household budgets amid rising prices. “A higher unit growth than volume growth indicates preference shifts towards smaller packs in consumers,” analysts at NIQ said. Sales volume grew by 7.1% during the period, higher than 3.9% in the preceding quarter and 6.4% a year ago. Unit growth stood at 8% during the quarter. Unit growth refers to the number of individual units sold while volume growth is the total quantity of goods sold.
Several consumer goods companies took price hikes in the Dec quarter to cope with rising commodity inflation. Firms like HUL and Godrej Consumer Products for instance, took about 10% price hikes in soaps category due to inflation in palm oil, Nuvama Institutional Equities said in a note. Broadly, the industry saw a 3.3% increase in prices in the quarter, NIQ said. Companies are expected to take another round of price hikes in the current quarter.
In terms of markets, rural continued to outpace urban regions. “For the first time in four quarters, we have observed a combination of consumption and pricing driving overall FMCG growth. Additionally, smaller, affordable packs from small and medium manufacturers are boosting consumption,” said Roosevelt Dsouza, head of customer success, FMCG at NIQ India, adding that rural markets “continue to lead the charge.” Rural consumption grew by 9.9% in the December quarter while urban growth lagged at 5%.
