NEW DELHI: Marking a gradual return to normalcy, India’s fast moving consumer goods (FMCG) industry bounced back with a growth of 7.3% in the October-December quarter on the back of festive buying, strong rural demand and a recovery in economic activity, showed a latest study.
This is the highest volume and value growth witnessed by the industry in 2020, during which businesses across India bore the brunt of Covid-related lockdowns.
“With the Covid fears receding and mobility improving, we reported a stellar performance during the third quarter of 2020-21 (October-December) with strong revenue and profit growth,” said Mohit Malhotra, CEO at Dabur India.
Swiss food giant, Nestle, too, reported a 10% increase in domestic sales during the period. “Nearly two thirds of our key brands like Maggi Noodles, KitKat and Nescafe Classic posted double-digit growth last year,” said Suresh Narayanan, chairman & MD at Nestle India.
“After initial challenges due to the pandemic, the demand in out-of-home channels has continued to improve, sequentially over quarters and we remain confident of its recovery,” he said.
The industry had more to cheer about as India’s metros sprung back into positive growth zone (0.8% vs YA) during the quarter after two quarters of decline, while rural markets continued to grow in double digits, sprinting to 14.2% in the period from 10.6% in the July-September quarter.
Favourable agricultural sector performance, government action towards rural employment generation and subdued impact of the pandemic on Bharat were behind the sharper recovery, said market intelligence company Nielsen that released the report.
“Revival in consumption has been led by a smart recovery in discretionary ‘out-of-home’ consumption products which has been buoyed by pent-up demand and increased availability across channels,” said B Sumant, executive director at ITC. “Heightened concerns on hygiene and safety continued to manifest in consumers’ preference for trusted brands.”
Hygiene & immunity building categories continued on a high value growth (46% vs YA) in the quarter, while the home and personal care basket made a consumption led recovery (5% volume growth vs year ago) and food categories saw a 10% growth riding on boost in consumption as well as price increase in some baskets.