According to Kantar, the volume of FMCG products purchased for in-home consumption in India has experienced a significant growth of 4.4 percent, surpassing the 2.1 percent registered earlier in the year. This surge was attributed mainly to Atta's 38 percent volume growth, marking its return to shoppers' baskets after the government ceased its free grain distribution scheme. Excluding Atta, FMCG volume growth stood at 1.7 percent, a modest but definite improvement from the 1.4 percent growth in the previous quarter.
Regarding value sales, there was a notable increase of 13.5 percent over the same May-July period. The gap between volume and value growth has rapidly diminished in the past three quarters, signalling a decline in inflation and FMCG prices.
For FMCG purchases from home (OOH), sales volume witnessed substantial growth, with a 94 percent increase between February and April and a further 79 percent increase in May-July, particularly among shoppers in larger cities. This growth was attributed to the resumption of normal activities post-COVID and hot summer, with a significant portion coming from refreshment categories like carbonated beverages, ice creams, and similar frozen desserts.
There is a trend towards shrinking pack sizes in the OOH space, with a 14 percent decrease in size among beverages and a 23 percent decrease among snacks purchased for OOH consumption.
Urban areas in India outpaced rural regions in FMCG volume growth during the May-July period, with 6.1 percent growth in urban areas compared to 2.8 percent in rural areas. Urban shoppers showed increased consumption in household care, grooming, and hot beverages, while cold beverages and snacking led in rural areas.
The post-pandemic rise in shopping trips and packs continues, with consumers making 153 trips annually, reaching 40 in May-July 2023 for the first time. The number of packs purchased also increased to 204 during the same period, driven by the trend towards smaller pack sizes.
Private label brands experienced remarkable growth in India, particularly in the toilet cleaners and noodles categories, with penetrations of 6 percent and 3.5 percent, respectively. Retailers like Reliance Retail, Future Group, More Retail, D-Mart, Apollo, and Star Bazaar have launched their product ranges.
As buying power increases, Indian consumers explore new tastes, launching unique product offerings such as savoury potato crackers, Korean-flavoured noodles, and energy drinks. Kantar data indicated that 3.4 percent of shoppers bought energy drinks for OOH consumption in the May-July quarter.
Consumer sentiment is upbeat and receptive to growth. However, the market remains complex, influenced by local and global pressures such as demonetisation, war, COVID-19, and inflation. Shoppers have become adept at dealing with change, and expect the same from manufacturers, with 35 percent of Indian consumers believing that manufacturers should lead sustainability initiatives, emphasising the growing importance of sustainability in consumer preferences.
