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Business News/ Companies / News/  South, East drive FMCG sales, North hit by unseasonal rains

NEW DELHI : South and East India led demand for fast-moving consumer goods (FMCG) in May even as unseasonal rains dampened demand for several categories in north India, showed data from retail intelligence platform Bizom, which monitors FMCG sales across urban and rural retail outlets.

Overall FMCG sales in May grew 1.4% from a year earlier, but dipped 11.2% in the North and by 6.4% in west India.

Growth was primarily led by strong demand for household goods from Kerala, Telangana and Odisha. Among the categories, beverages saw the steepest decline in this period, down 29.4% from a year earlier as intermittent rains in north India impacted demand. Branded consumer and home care products clocked the strongest growth during the month, the data showed.

“May 2023 sales have seen slow growth on account of a dip in the stocking of summer products, as unseasonal rains dropped temperatures across parts of the country impacting consumption of the products. While urban sales fell slightly, rural sales have seen low single digit growth," Akshay D’souza, chief of growth and insights at Bizom, said.

Stocking of goods per kirana fell 1.5% during the month, according to Bizom.

Meanwhile, sales growth in urban India was down 0.6%, while rural markets grew 2.2% in May over a year ago. Sales of beverages fell 29.4%, confectionary was down 9.6%; while commodities grew at an impressive 21.9%. Sale of home care products such as detergents, dishwashing powders, and floor cleaners rose 21.9%. Personal care products posted an 11% dip, according to Bizom.

“Southern and eastern parts of India have seen an increase in contribution. This is mainly because some parts of South and East were less affected by rainfall, which cooled off summer product sales. Also, we see a strong spike in branded commodity sales year-on-year in these regions. Last year, we did see consumers reducing consumption and buying smaller packs following a strong price rise for many products," said D’souza.

“Unseasonal rainfall in parts of India led to a dip in demand in the North," said Sanjeev Asthana, chief executive officer, Patanjali Foods Ltd. “But this will pick up now. According to our estimates, June-July should be quite warm. There was a fear of serious crop loss, which happened in wheat and pulses, but it may be a marginal. I think it will have some impact but not on a sustained basis," he said. The company sells edible oils, noodles and cookies.

Asthana said demand was steadily picking up on the back of cooling commodity prices.

“With commodity prices coming down, barring wheat, we are seeing a pick up in demand right now. General commodity prices are lower," he added.

Rural markets are turning resilient “as we see a lot of alternate economic activity other than core agriculture starting to build up," he added. The company draws close to 45% of its business from rural markets.

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Suneera Tandon
Suneera Tandon is a New Delhi based reporter covering consumer goods for Mint. Suneera reports on fast moving consumer goods makers, retailers as well as other consumer-facing businesses such as restaurants and malls. She is deeply interested in what consumers across urban and rural India buy, wear and eat. Suneera holds a masters degree in English Literature from the University of Delhi.
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Updated: 18 Jun 2023, 10:18 PM IST
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