New Delhi: It is a good sign for the country. FMCG companies expect demand to pick up soon. Along with market researchers like NielsenIQ and Kantar, companies like Adani Wilmar, Tata Consumer Products, Colgate, LT Foods, Spencer’s Retail have expressed their views by giving data. He says that sales of everyday products like edible oil, spices, flour, toothpaste, rice, pulses saw an increase in the July-September quarter. He is confident that this growth will continue in the October-December quarter also. According to NielsenIQ, there was an increase in sales of essential items like edible oil, packed flour and spices in the September quarter. There was an increase of 2.1% in consumption of food items in the April-June quarter. It increased to 3.4% in July-September. The reason for this is the increase in consumption of essential commodities.
There is a boom in the sale of essential goods
Spencer’s Retail CEO Anuj Singh said that the sales of luxury items have been affected. But, there is a steady increase in the sales of essential items used every month. He said, ‘We have seen that the sales of essential goods and fresh products have been good here. Adani Wilmar, India’s largest packaged edible oil company, saw its sales increase by 21% and volume by 17% in the last quarter. The company expects this growth to be even better in the December quarter due to the wedding season.
Tata Consumer Products reported 26% growth in sales of packed pulses and value-added salt in the last quarter. LT Foods, which sells Daawat brand of packed rice, reported over 10% growth in sales volumes in the first half of this financial year, while Colgate India reported a 10% growth in toothpaste sales in the last quarter.
Inflation of food items has increased
All this is happening at a time when the inflation of food items is very high in India. However, demand is picking up in rural areas due to good harvest and increase in government spending after the elections. Food prices rose 10.9% in October due to higher prices of vegetables and fruits. At the same time, this increase was 9.2% in September and 6.6% in the same period a year ago.
Kantar has also said in its recent report that the growth of essential items like spices and edible oils in the food items segment in the last quarter is a big indication that the situation is going to change soon. The report says that the growth of snacks is no longer in double digits. But, still it’s okay.
According to Bizom’s value sales data, consumer goods witnessed the highest growth in the FMCG industry at 26.4% in the July-September quarter. Bizom Chief of Staff Vishesh Dora said that the prices of edible oil were 20% higher than last year. After this, 22% better market coverage and increasing trend towards branded oil in rural markets accelerated the growth. He said the overall prices of everyday items have increased by 13-15%.
How can FMCG companies effectively respond to the rise in demand for everyday essentials during economic uncertainty?
Interview between Time.news Editor and FMCG Expert Dr. Neha Sharma
Time.news Editor: Good morning, Dr. Sharma! Thank you for joining us today to discuss the recent trends in the FMCG sector. It seems that demand for essential goods is on the rise. What does this uptick in sales indicate about consumer behavior in India?
Dr. Neha Sharma: Good morning! Yes, it’s indeed promising news for the FMCG sector. The increase in demand for essential goods like edible oil, spices, and personal care items suggests that consumers are prioritizing their basic needs, possibly influenced by economic conditions and a desire for stability. During uncertainty, people tend to redirect their spending towards necessities rather than luxury items.
Time.news Editor: That’s an interesting perspective. According to NielsenIQ, food item consumption saw a notable increase from 2.1% in the April-June quarter to 3.4% in July-September. What factors do you think contributed to this growth?
Dr. Neha Sharma: Several factors are at play here. One is the increased emphasis on home cooking due to the ongoing impacts of the pandemic. With more people cooking at home, demand for staple food items naturally rises. Additionally, as the economy shows signs of recovery, consumer confidence seems to be improving, leading to higher expenditures on essential goods.
Time.news Editor: Anuj Singh, CEO of Spencer’s Retail, mentioned that while luxury items have seen a downturn, sales of everyday essentials are steady. What does this say about the overall market dynamics?
Dr. Neha Sharma: It underscores a shift in consumer priorities. The current economic climate has made many consumers more cautious with their spending. While they might be cutting back on luxury items, they recognize the importance of essentials, which creates a stable demand base. This trend can also reflect longer-term habits being formed, as consumers become more value-conscious.
Time.news Editor: That’s a keen observation. Companies like Adani Wilmar are predicting even stronger sales due to the upcoming wedding season, with their sales having increased by 21% last quarter. Can we expect seasonal factors to play a significant role in sustaining this growth?
Dr. Neha Sharma: Absolutely. The wedding season is a crucial period for FMCG sales, especially for categories like edible oils, spices, and packaged food. Cultural events and festivals drive demand as families prepare for celebrations. If companies leverage this season effectively, we could see even more pronounced growth in the FMCG sector.
Time.news Editor: It certainly sounds promising. As we look towards the future, what should companies in the FMCG sector focus on to capitalize on these trends?
Dr. Neha Sharma: Companies should focus on understanding changing consumer preferences and adapting their product ranges accordingly. Emphasizing quality, affordability, and sustainability will be key. Moreover, investing in digital marketing and e-commerce platforms will allow them to reach a broader audience, especially as online shopping continues to grow.
Time.news Editor: Thank you, Dr. Sharma! Your insights into the FMCG sector and consumer behavior during these changing times have been invaluable. It seems we have a lot to watch for in the next quarter!
Dr. Neha Sharma: Thank you for having me! Yes, the upcoming quarters will be crucial for the FMCG landscape, and I look forward to seeing how these trends evolve.