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FMCG demand back at pre-Covid-19 level

Demand for packaged consumer goods recovered to near pre-Covid-19 levels in June as shops reopened after the government eased lockdown measures and the return of millions of migrants to their villages boosted rural consumption, market researcher Nielsen said.

“June saw a clear but slowish recovery,” said Prasun Basu, president, South Asia zone, Nielsen Global Connect. “We are kind of coming back to the levels that we left behind at the end of last year.”

Sales of consumer goods witnessed a sharp decline in April and May as markets remained closed and many households had stockpiled provisions in March in anticipation of the government imposing a national lockdown.

While spending on fast-moving consumer goods (FMCG) rose in June, India’s recovery was delayed in comparison with other Asian markets, Nielsen said.

Rural recovery outpaced that of urban areas as the reverse migration of workers and an above-normal monsoon boosted sales of packaged goods.

Nielsen did not share the percentage growth numbers for June but said the average monthly FMCG value sales in the pre-Covid-19 period of December to February was taken as the baseline.

The market researcher looked at data during four different periods: the baseline period of December to February; the pre-Covid-19 period of March; the April-May lockdown; and June, when the lockdown measures were eased. With the baseline indexed at 100, FMCG sales were at 98 for June; in May, they dipped to 75. In comparison, the pre-Covid-19 or March sales were at 101 as shoppers filled their grocery baskets fearing shop closures. In rural markets, sales were sharply ahead at 109 in June.

“After a significant impact during the lockdown, the FMCG industry in India has recovered sharply in June—a recovery that is driven by traditional trade channels. There was a clear prioritisation on FMCG categories made by consumers during the lockdown period, and significant recovery of others with Unlock 1.0 in June,” Nielsen said.

Between January and May, value sales of FMCG in India dropped as much as 8% on a year-on-year basis, the steepest fall in consumer packaged goods seen in key markets of Asia.

However, the trends were varied across segments.

Within essentials, packaged wheat flour and retail packs of edible oil brands grew well as consumers turned to home-cooked food, driving sales of staples.

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