Rural Markets Drive FMCG Growth, Outpacing Urban In Q3'24

NielsenIQ (NIQ) unveiled its FMCG Quarterly Snapshot for Q3’24 (JAS’24), revealing a 5.7 per cent value growth in India's FMCG sector, driven by a 1.5 per cent price increase and 4.1 per cent volume growth.

Roosevelt Dsouza, Head of Commercial – India at NielsenIQ stated, "The Indian FMCG industry shows resilience with steady value growth and marginal price increase. Rural volume growth at 6 per cent continues to surpass urban markets, despite softer consumption in both regions this quarter. Small manufacturers are rebounding after recent decline, while major players trail in value growth.”

Rural Outpaces Urban
In Q3 2024, consumer demand showed sequential recovery in both urban and rural markets. Urban consumption rose by 2.8 per cent while rural growth accelerated to 6 per cent, up from 5.2 per cent in the previous quarter - double the urban growth rate. Rural regions continued to lead in volume growth across much of India. Traditional trade volumes increased by 4.1 per cent in Q3, compared to 3 per cent in Q2, while modern trade, despite some slowdown, still outpaced urban growth.

Festive Signs Emerging
FMCG volume growth showed a slight improvement in Q3 2024. Food consumption rose to 3.4 per cent in Q3, up from 2.1 per cent in Q2, driven by staple categories like edible oils, packaged atta and spices despite price increases. In HPC categories, consumption growth steadied at 6 per cent in Q3, down slightly from 6.7 per cent in Q2, with stable demand across both urban and rural areas. Over-the-counter items such as rubefacients and analgesics saw a value sales increase of 11.7 per cent in Q3, supported by price growth.

Small Players Rebound
Large players continue to outperform small, mid-sized players and giants. Small manufacturers rebounded from three-quarters of consumption decline, showing faster growth than giants, driven by a strong recovery in food volume. Giants experienced the slowest value growth, with volume growth also declining compared to AMJ'24.