PackMan has been reading the RBI monthly bulletin. It says demand growth is slowing, keeping the 7.2% annual projection. FMCG has been impacted. Urban demand is sluggish, but rural demand shows promise. Corporate India has raised its brows about weak corporate performance.

PackMan spotted Nestle's Suresh Narayanan on a business channel. Narayanan said India's middle class is "shrinking" amid sluggish demand in the FMCG market. Narayanan said earlier that the slowdown lasted for a single quarter and there was a bounce back. He said the slowdown has lasted for two to three quarters.

Rohit Jawa of Hindustan Unilever concurred with his Nestle counterpart when he said, "Rural markets are recovering, but we are seeing a slowdown in urban markets." He added that it is a near-term phenomenon. PackMan noticed that HUL's price growth is flat this year, but Team HUL is optimistic and expects a recovery soon.

Meanwhile, PackMan spotted Sunil D'Souza of Tata Consumer Products. The group has implemented hikes in the salt segment to accommodate cost increases. Also, several companies have reduced the grammage of their products available at popular price points.

PackMan has picked up two things: The pressure points are from two types of cities: megapolis and Metros. This slowdown is due to the shrinking middle-class consumption and the pressure to maintain their household budgets.

The other trend is that middle-class people are opting for smaller packs. As a result, PackMan is noticing that the FMCG majors are opting to reduce product weight rather than the price of items targeted at lower-end consumers. Also, many groups are resorting to single-digit price increases on some large packs and launching 'bridge packs', as they seek to overcome the impact of inflation.

Notably, FMCG sales have slowed down to 2.8% in the first quarter of FY 2025, compared to 10.1% in Q1 of FY 2024.

Meanwhile, PackMan has contacted the local flour mill in the ilaka, which is now supplying fresh atta at home. This is FMCG-speak for polarising demand. But more on that next time?