FMCG market to taper down further due to high base effect: Report

New Delhi: The Quick Shifting Shopper Items (FMCG) market will see additional tapering down and decline in volumes, particularly within the in-home consumption class attributable to a better base impact, however there are some “silver linings” as some classes are sustaining increased penetration than the pre-pandemic stage, information analytics and market perception agency Kantar stated. The December quarter of 2020, was one of many fastest-growing quarters, with a 5.5 per cent progress and these excessive baseline numbers are more likely to trigger one other steep drop in progress charges within the subsequent quarter as properly.

“Because of this, by the tip of 2021, the MAT (Shifting Annual Complete) progress will see additional tapering down, and a decline in FMCG volumes, in-home may be very a lot attainable,” stated Kantar in its FMCG Pulse for November 2021.

Nevertheless, it additionally added :”Regardless of this, we keep that it’s not a scary state of affairs to be in, however fairly a undeniable fact that mirrors the robust consumption development the nation has been witnessing for fairly a while now.”

The September quarter retreated marginally by 0.5 per cent in opposition to final yr’s identical interval, primarily led by city India, which shrank by 2.6 per cent.

“Rural is sustaining progress, however at simply 1.5 per cent,” Kantar stated, including “because of this, the MAT September FMCG progress stood at 1.9 per cent, slower than the inhabitants progress.” The common quarterly progress within the pre-pandemic 2019 was 2.1 per cent.

MAT is the entire gross sales figures, over the course of the earlier 12 months. It is a rolling yearly sum, so adjustments on the finish of every month with information from the brand new month added to the entire and information from the primary month of the interval taken away.

In FMCG, some classes took as quickly because the pandemic struck, after which there have been different classes that struggled throughout lockdowns however emerged as quick winners after lockdowns.

Classes like dish wash, spices and salty snacks witnessed step-growth, with out dropping their penetration in any quarter for the reason that onset of the pandemic, whereas classes like bathroom cleaners and pesticides peaked when instances had been excessive, misplaced penetration afterwards, however are nonetheless sustaining increased penetration than the pre-pandemic interval.

“Regardless of the slowdown in FMCG, the excessive adoption of a few of these classes is a silver lining,” it stated.

In accordance with Kantar, the lagging progress continues to be a results of the underwhelming buy of atta (wheat flour) as the federal government is providing free wheat to customers.

“Excluding atta out of our numbers, instantly catapults the FMCG progress to a greater than respectable 5.9 per cent at a MAT stage, this time seeing a progress in each city and rural,” it stated.