FMCG Growth Slips, Small Cos Lose Ground to Biggies

Sagar Malviya & Aanya Thakur Mumbai: India's fast-moving consumer goods (FMCG) sector saw a deceleration in volume growth in the July-September quarter, with slower expansion of rural demand and rising costs putting smaller regional manufacturers under greater pressure, even as large listed companies reported stronger growth. FMCG sales volume increased 3.6% during the quarter, down from 4.7% a year earlier, according to Worldpanel by Numerator.

In contrast, listed companies reported strong growth. Hindustan Unilever posted 7% underlying volume growth, Marico's India business expanded 10%, Godrej Consumer Products reported an 8% year-on-year increase, while Nestle India recorded double-digit volume growth. The divergence suggests that growth at larger companies is not necessarily translating into a broad-based recovery in consumption, with organised players potentially gaining share as smaller and regional competitors struggle with costs, supply constraints and weaker demand. "Smaller players appear to be losing ground to larger organised companies across most categories," said Mayank Shah, vice president at Parle Products.

The pressure could be particularly pronounced in rural markets, where a large part of the smaller, local FMCG industry operates and where consumption growth has also moderated. Unlike large companies with national distribution networks and stronger procurement capabilities, regional manufacturers often have less room to absorb cost increases or withstand disruptions.