Price hikes help FMCG sales grow 7.4% in 2022

  • While categories such as beverages and commodities topped sales charts during the year, home and personal care products saw significant demand contraction

Suneera Tandon
Updated20 Jan 2023
Mobility curbs due to the Omicron wave of covid infections in early 2022 had a bearing on household goods demand
Mobility curbs due to the Omicron wave of covid infections in early 2022 had a bearing on household goods demand

Fast-moving consumer goods companies posted 7.4% rise in sales in 2022, primary led by price hikes, according to data from retail intelligence platform Bizom.

While categories such as beverages and commodities topped sales charts during the year, home and personal care products saw significant demand contraction, the data showed. Inflationary pressures dominated most of 2022, forcing several companies to take price hikes to offset higher raw material costs, which in turn, dented consumer demand with rural households feeling a deeper impact of the higher prices.

Bizom, which tracks sales of daily goods across millions of retail stores, analysed data for the full calendar year. It, however, did not share sales volume data for 2022.

Demand for beverages during the hot summer months of 2022 helped the sector post 23% rise in sales value from a year earlier. Meanwhile, branded commodities maintained steady demand throughout the year, growing 8.9%, the data showed.

Mobility curbs due to the Omicron wave of covid infections in early 2022 had a bearing on household goods demand, though the restrictions were less severe than the previous waves, Bizom said.

“FMCG had a challenging year with companies going a full circle in the beginning of the year with price-led growth and subsequently bringing the focus back to consumption-led growth. We did see many companies leverage shrinkflation as a strategy to get higher grammage realizations from established consumer price-points. The global challenges affected prices with food inflation being extremely high worldwide, but the agri economy of India did provide some cushion to manage it with increased supply of essential food items like rice and wheat, in the local market, to manage prices,” said Akshay D’Souza, chief of growth and insights, Bizom.

A strong summer lifted beverage sales with more than half of it coming during four months of the year. Demand for branded commodity products stayed steady, barring the second quarter of 2022, when inflation forced people to defer purchases, according to Bizom.“While inflation affected the prices of many products like soaps, detergent, etc, it led to a dip in the size of purchases and we are now seeing a price revision as consumer brands in home and personal care space look to improve consumption,” D’Souza said. On Thursday, FMCG giant Hindustan Unilever said the worst of inflation may be behind it. The company reported a 5% rise in December quarter volumes. “Looking forward, we are cautiously optimistic in the near term and believe the worst of inflation is behind us. This should aid in a gradual recovery of consumer demand,” Sanjiv Mehta, CEO and managing director, HUL, said.

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HomeIndustryRetailPrice hikes help FMCG sales grow 7.4% in 2022

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