FMCG sector grows by 37% in terms of value in June quarter: Nielsen

India’s fast-moving consumer goods (FMCG) market clocked a 37% growth in the April-June quarter in terms of value, from a low base a year ago, as per market research firm Nielsen. The firm also said that the growth dipped by 2% in the previous quarter due to the lockdowns imposed in various states across the country.

However, the sudden onset of the second wave between April-June couldn’t give a major setback to the FMCG sector and hamper its growth momentum.

Companies successfully sold products like soaps, ketchup, toothpaste and staples as the supply chains remained undisturbed and the stocks reached the stores. The demand was quite normalized during the second wave as compared to the first one in 2020 owing to people not hoarding goods and indulging in panic buying.

For the quarter ended June, FMCG volumes constituted 18.2% of the total 36.9% growth reported by the entire sector, which is also inclusive of e-commerce. In the same quarter last year, the value growth of the FMCG sector had nosedived by 17.9% owing to the nationwide lockdown and the strict restrictions.

Less impact of Covid second wave

Diptanshu Ray, South Asia lead for NielsenIQ said that the second wave was less severe compared to the first one in terms of the average number of closure days for retail shops. In the second wave, the lockdowns were regionalised and were partial in nature and gave customers higher accessibility to goods. Customers didn’t engage in panic buying which prevented the supply chains from getting disrupted, added Ray.

The report added that the demand for FMCG goods bounced back much faster after the second wave as compared to the previous one and several firms reported an upward growth in June. Nielsen also said that when indexed to the first quarter of 2020 or what is now called the pre-pandemic era, the industry to a great extent continued to remain at identical levels.

FMCG sector in India has endured a very challenging year with the availability of goods being hampered by lockdowns and lower out-of-home consumption. The demands also shifted towards products like snacks, wellness and hygiene goods. Nielsen, which follows a calendar year, however, did not disclose its estimates for the full year.