Elections set to offer a boost to India's FMCG industry

The FMCG companies are gearing up for demand pickup and are increasing investments in promotional activities, changing the mix of broadcast, print and digital advertisements and stepping up distribution.

The companies are also preparing marketing plans to reach out to voters at the voting venues. Revising the stock keeping unit mix is also one way to reach out to the target audience, said the sources.

But will these measures boost on-ground consumption?

A quick look at the historical data from Kantar Worldpanel highlights the consumption trends during the 2009 and 2014 election periods.

During April – May 2009, the FMCG space (excluding atta category) saw volume growth of 2.8 percent. The atta category saw volume growth of 9.6 percent.

The growth in 2009 was aided by a growing population as well as an increase in consumption in categories such as shampoos, noodles, hair colours and ready-to-cook pastes.

During the election period of April –May 2014, FMCG volumes (excluding atta) stood at 2.5 percent while average consumption growth dipped marginally on year. The atta category saw volume growth of 0.6 percent due to a weak harvest.

Top growth categories in 2014 were glucose powder, sanitary products, noodles and ready-to-cook pastes.

With this historical benchmark in mind, it’ll be interesting to see how volume growth and demand shapes up going forward.