Because of the unprecedentedly heavy rainfall, FMCG majors saw a downgrade in their earnings-per-share: Marico saw a decline of 0.9%, Dabur registered a decline of 1.34%, and Tata Consumer Products of 2.5%. Conversely, the overall FMCG index in the stock market saw an increase of 1.2%.

A recent Kantar report on the Asian market has shed light on the changing landscape of the FMCG sector in India (urban). The report reveals that FMCG growth has seen a significant shift, with a reduced gap between value and volume growth.

According to the report, FMCG grew by 7% in value and 5.5% in volume over the year. The data indicates a revival in volume growth for FMCG, while value growth has been slower compared to the previous year. Notably, the report highlights that the previous significant gap between value and volume growth has diminished, attributed to subsiding inflationary pressures.

At the 11th Specialty Films & Flexible Packaging Global Summit held at the Jio World Convention Centre, Saugata Gupta, managing director and CEO of Marico, spoke about the future of India’s FMCG industry in the context of sustainable packaging.

According to Gupta, emerging consumer cohorts, such as the elderly and single-person households, are driving demand for specific packaging solutions, like easy-opening and smaller portion sizes.

The shift in consumer habits is also evident in the growing preference for sustainable and environmentally friendly products. Gupta shared that “data shows that consumers are willing to pay a 10% premium on sustainable products.” This trend is fueled by the rise of conscious consumers who seek out brands with a purpose and a commitment to sustainability.

The integration of technology into packaging has also become a key focus area. Gupta highlighted that “the journey from bar code to QR code enables the consumers today to know more about the ingredients of the product and the method of usage.” Additionally, the use of AI in the FMCG industry is enabling targeted selling and the development of personalised products.

The Kantar report also emphasised that FMCG volume growth is evident across various sectors, with beverages leading the growth. Specifically, bottled soft drinks and fabric softeners have emerged as the winning categories. 

The intensifying summer heat had propelled an impressive performance in bottled soft drinks, increasing its annual penetration to 59%, up from 39% three years ago. Additionally, the report notes a 50% rise in spending on fabric softeners in the past couple of years, with the category now reaching one in every four households in India.

Big companies are definitely boosting their FMCG arsenal — ITC plans to expand its FMCG offerings. The company has expanded its product portfolio to include everything ranging from rock salt and vermicelli to trending Korean ramen and skincare.

However, according to reports in leading national dailies, financial securities experts think that the rural recovery might have an impact on the performance of FMCG majors in urban areas — while it can lead to an increase in hiring. The same experts predicted a turnaround in the festive season, which has begun to manifest itself in the whopping first-week turnover of Rs 54,000-crore.

The Kantar report provided insights into the evolving consumer trends and market dynamics in India's FMCG sector. It underscored the changing consumer behaviour, growing shopping occasions, and the resurgence of volume growth in the FMCG segment. As the Indian market continues to adapt to new dynamics, industry players are expected to leverage these insights to drive strategic decision-making and capitalise on emerging opportunities in the FMCG space.