As 2024 draws to a close, the Indian FMCG sector has demonstrated resilience, innovation, and adaptability amidst evolving consumer expectations and an unpredictable economic environment. The industry has successfully navigated challenges such as rising inflation, supply chain disruptions due to geopolitical issues, and intensified competition.
From a macro perspective, India remains one of the fastest-growing large economies. According to industry reports, the FMCG market is projected to see overall volume growth of 5 per cent in FY25, compared to 4 per cent in FY24, driven by a revival in rural demand.
Trend Talk
The emergence of ‘Many Indias,’ characterised by diverse demographics and income groups, has opened new opportunities for the sector. Industry reports suggest that households in Affluent India (India 1) will double to 22 million in the next three years, while 40 million households will be added to the ‘Middle Income’ (India 2) segment over the same period. India's young population is also shaping consumption patterns. By 2030, millennials and Gen Z will comprise 77 per cent of the population. These digital natives exhibit always-connected, digital-first consumption behaviours, a trend that extends beyond urban centres into smaller towns.
Premiumisation and personalisation are significant trends impacting the FMCG and consumer health industries, particularly in personal care and self-care categories. With rising disposable incomes and an aspirational middle class, Indian consumers are increasingly seeking premium offerings. A recent NielsenIQ report highlights that premium brands now account for 27 per cent of total FMCG sales and contribute 42 per cent to the sector's value growth, reflecting a clear shift in consumer priorities toward aspirational purchases.
The adoption of new-age technologies like generative AI is enabling highly personalised experiences at scale, delivering bespoke solutions for discerning consumers. Amidst these emerging trends, companies are reimagining their strategies, moving beyond one-size-fits-all approaches to cater to diverse consumer segments with differentiated portfolios, personalised innovations, and digital-first initiatives.
Strategic Moves
At Kenvue, we are pivoting our portfolio to capitalise on these opportunities, addressing unmet consumer needs with our science-backed premium offerings, including brands like Neutrogena, Aveeno, and Stayfree Secure Nights. Examples of our premium innovations include the Neutrogena Visible Repair range for ageing skin, Aveeno Baby for sensitive skin, and premium menstrual hygiene products like Stayfree Secure Nights. Additionally, we are leveraging new technologies to create curated consumer experiences, such as Neutrogena Skin360 for personalised skin analysis and product recommendations and Johnson’s Baby AR innovation for enhanced ingredient transparency.
The year also saw route-to-market strategies evolve and disrupt the FMCG industry and traditional retail channels. Accelerated digital adoption has led to more digital consumer journeys, where convenience is paramount. The explosive growth of quick commerce has introduced new product segments, strengthened last-mile delivery, and reshaped consumer purchase habits forever.
Outlook For 2025
While inflation and moderate economic growth in recent quarters have impacted urban demand, the outlook for the FMCG sector remains positive.
The government’s Union Budget pledged Rs 2 trillion to boost employment over the next five years, allocated Rs 1.48 trillion for skill development, and introduced measures such as one-time wages for first-time employees and an internship program for youth. Increased allocations for rural development, agriculture, and allied services will also benefit the FMCG sector.
India's fast-growing economy, coupled with ‘Many Indias’, is expected to position the country as the third-largest consumer market globally by 2030. To meet the growing aspirations of diverse consumer groups, we aim to strengthen our geographical footprint, enhance our distribution network, and launch relevant products at competitive price points.
Premiumisation in the FMCG industry is set to endure, with aspirational demand rising across urban and smaller towns. We will continue to expand our premium portfolio through innovations with brands like Aveeno, Neutrogena, Stayfree, and ORSL.
Health and wellness will gain even greater importance, with an increased focus on preventive and self-care rituals. Further segmentation is anticipated in the consumer health industry. In skincare, consumers will prioritise health and protection, while in food, demand will grow for immunity-boosting and wellness-enhancing products backed by science.
As the lines between physical and digital retail blur, technology will remain a key enabler. Hyper-personalised, immersive experiences will drive consumer loyalty and define success in this competitive landscape. Sustainability will also gain momentum, with brands expected to integrate eco-conscious practices across operations.
The FMCG industry will remain a pivotal driver of India’s growth story. With its ability to adapt and lead, the sector is well-positioned to redefine consumer experiences, foster innovation, and embrace disruption to play an increasingly meaningful role in consumer lives.
_20250114151759_original_image_9.webp)
_20250109162003_original_image_13.webp)
