Nielsen IQ forecasts moderate growth for India's FMCG industry in 2024

The Indian Fast-Moving Consumer Goods (FMCG) industry, a cornerstone of the nation's economy, is poised for growth in the calendar year 2024, albeit at a more moderate pace compared to the previous year.

According to market research firm Nielsen IQ, the sector is anticipated to witness a growth rate ranging between 4.5% and 6.5%, signifying a significant deceleration from the robust 9.3% growth experienced in 2023.

Despite the anticipated slowdown, Nielsen remains optimistic about the FMCG industry's prospects. In its report, the research firm highlights the industry's remarkable ability to navigate complexities and adapt to evolving market dynamics as key factors underpinning the growth outlook for 2024.

Examining the performance of the FMCG industry in the December quarter of the previous year provides insights into the factors influencing the sector's trajectory. The industry reported a 6% value growth on a year-on-year basis, driven by a 6.4% increase in volume.

Notably, the volume growth for the quarter was 6.1% higher than the corresponding period in the previous year, although it did show a sequential decline from the 8.6% recorded in the September quarter.

Nielsen IQ identifies "habit-forming" products in the food and essential home product categories, such as biscuits and noodles, as the primary drivers of demand in the December quarter. Despite facing flat to negative price growth, these categories have exhibited resilience and sustained demand.

The report highlights a sequential slowdown in volume growth in rural markets, with consumption declining in the fourth quarter compared to the September quarter. However, the decline is more pronounced in urban markets.

Within the retail sector, modern trade continues to experience robust double-digit consumption growth at 16.8%. In contrast, traditional trade has witnessed a drop in consumption, declining to 5.3% in the fourth quarter of 2023 from 7.5% in the previous quarter.