Fast moving consumer goods are the fourth largest sector in the Indian economy. There are main segments in the sector are food and beverages, healthcare and household and personal care.
This week, the Nifty FMCG index has fallen, closed at 29,423.85 or -0.77%. The sector has been consolidating in the past couple of months despite profits and sales growth of the food products segment of the FMCG industry has grown with a strong pace.
Market players like Hindustan Unilever, Britannia Industries, Dabur India, Marico, and Godrej Consumer Products, announced their fourth-quarter earnings last month, which showed subdued numbers for Jan-Mar 2019 due to delay in summer this year demand gets deteriorate mostly in rural areas. Reason for softer earnings is mainly due to falling in demand for non-food product items in India. For example, if we look at Godrej Consumer Products, which sells the popular Cinthol soap and Good Knight mosquito repellent, posted a mere 1% increase in domestic volumes; while its net profit was up 51% at Rs. 935.24 crore during the March quarter 2019.
However, the FMCG sector in India is expected to advance to US$ 103.7 billion in 2020 from US$ 52.75 billion in 2017-18. As growing awareness in rural areas, easier access, growing social media through blogging, people are now becoming fitness freak, which intends to consume more healthy foods and related products, changing lifestyle more aggressively in urban areas along with ruler areas are the key growth drivers of the consumer market. Currently, the rural segment is contributing 45% revenue in FMCG sector.