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Business News/ Industry / Retail/  FMCG growth to slow down at 11-12% in 2019: Nielsen
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FMCG growth to slow down at 11-12% in 2019: Nielsen

The Nielsen report says the FMCG industry is expected to grow at 12-13% during the April to June quarter of 2019
  • The report says the volume growth which peaked in 2018 to 11% is expected to be healthy but lower at 8.5- 9.5% in FY19
  • FMCG firms have faced headwinds on the back of 2 consecutive years of drought in FY15 & FY16. (Mint)Premium
    FMCG firms have faced headwinds on the back of 2 consecutive years of drought in FY15 & FY16. (Mint)

    Mumbai: India's fast moving consumer goods (FMCG) industry is likely to grow at a slower pace at 11-12% in 2019, almost 2% lower than that in 2018, says a report.

    The industry is also expected to grow at 12-13% during the April to June quarter of the calender year 2019, according to Nielsen.

    "In line with the FMCG growth forecast for Q1 2019 at 13-14%, this sector grew at 13.6%. We are witnessing a softening of growth by 1-2% sequentially every quarter leading to healthy double digit growth in the first half of the year followed by a high single digit growth in the second half of the year," Nielsen said.

    Nielsen maintained that the FMCG industry growth outlook will be in the range of 11-12% in 2019, almost 2% lower than that in 2018.

    The volume growth which peaked in 2018 to 11% is expected to be healthy but lower at 8.5- 9.5% in FY19, it added.

    It noted that the 13.6% growth in first quarter is slightly lower than the last quarter of 2018 (-2.3% from the previous quarter).

    "Similar sentiments are witnessed in the economy with a 6.6% GDP growth in the December quarter of 2018 against an expected 6.8%. Inflationary pressure is also seen mounting in recent months from 2% in January 2019 to 2.9% in March 2019," it added.

    "While slight drop is witnessed in urban growth, there is a significant softening of growth trends in rural which is dampening the overall FMCG industry growth from third quarter of 2018 to first quarter of 2019.

    Historically, rural has grown 3-5% points faster than urban and the recent slowdown in rural growth has brought the growth closer to the urban growth.

    "The overall drop witnessed in rural growth is majorly driven by slow down in packaged food category," it noted.

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    Published: 17 Apr 2019, 06:40 PM IST
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