BCG anticipates FMCG volume uptick aided by stable pricing, more products

From 2007 to 2023, while India's GDP grew at an average rate of 5.9%, FMCG volume growth was only 3.4%. A more significant slowdown was observed between 2017 and 2023, where FMCG volume growth declined from 3.5% to 2.9%, impacted by various disruptive events like the implementation of GST, demonetisation, and the COVID-19 pandemic.

The report also highlighted consumer spending patterns, revealing that the affluent 16% of the population accounts for 32% of total consumption, with the middle-income households contributing the rest. Another factor affecting FMCG volume growth is the sharp rise in consumer staple prices since 2012, which has led to a reduction in FMCG product consumption relative to other items.

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Abheek Singhi, MD & Senior Partner at Boston Consulting Group, remains optimistic about the sector's future. He predicts an upturn in FMCG volume growth in the next 12 months, driven by supply-side actions and industry efforts. This expected improvement comes as a welcome sign for the industry, which is looking to rebound from a period of slower growth.

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