Indian FMCG sector stronger than global peers: Report

The Indian FMCG sector is reportedly more resilient than its global peers, as per Kantar consultancy. "While global inflation, wars in other parts of the world and geopolitical issues are having a ripple effect on economies everywhere, the FMCG business in India is much more resilient than some of its global counterparts", said a Kantar report

This comes, even as the rapid price rise has induced a 10% cut in the consumer spending between June and November 2022. The report mentioned that, even as the volume growth in the FMCG category fell flat between February and April 2023 with an associated drop in consumption, the growth is returning.

However, the report added that consumer caution is expected to continue through 2023 with inflation expected to continue to rise. The convenience sector is expected to grow in double digits but slower than the 21% growth of the last 12 months.

As per the reports, Snacking category which saw a spike in growth during the pandemic and until a few months ago will slow down further. Kantar expects the growth of snacking to slow down to under 3% this year. Cold drinks sector saw a growth of 47% in the year ending till January 2023. But the majority of growth was seen during the first half and and the second half didn't perform well.

Home hygiene sector which registered just 0.6% of growth in 12 months ending till January 2023 might see a slight improvement in 2023. However, the increase will be minimal.

According to the Kantar report, more than two-fifths of consumers feel prices have increased across various categories like fuel, electricity, and staples such as milk, atta/wheat and rice. The report noted that even though the prices are rising, consumers are not compromising on the essential things. The report expects the consumers to move to cheaper alternatives within the household categories.

But, if prices continue to rise further, Indian consumers will cut out non-essential spending like entertaiment, convenience goods, travel, says the Kantar report