FMCG Industry Anticipates Double-Digit Growth in 2024 After Challenging Year

The Fast-Moving Consumer Goods (FMCG) industry in the country is poised for a significant rebound in the coming year, banking on various factors such as increased rural demand, better volumes, and favourable commodity prices. This optimistic outlook follows a tough 2023, marked by subdued festive demand, erratic rainfall affecting rural growth, and unfavourable market conditions due to elevated commodity prices.

The FMCG sector, known for its substantial growth potential, particularly in emerging markets like India, faced a challenging period in the past year. However, signs of recovery are emerging, with industry players eyeing 2024 as a promising year. The anticipated positivity is attributed to favourable input prices, expected to benefit segments like Home and Personal Care (HPC) and certain food businesses.

Saugata Gupta, the Managing Director and CEO of Marico, expressed confidence in the upcoming financial year: "We expect the demand situation to improve as we enter the next financial year. We expect FMCG players to increase the pace of innovation and premiumization and also focus on significant investment behind expanding the quality of rural distribution."

Additionally, industry analysts predict that softening commodity inflation will allow FMCG companies to expand profit margins, leading to increased expenditure on branding initiatives, revival of consumer-centric promotional schemes, and augmented dividend payouts to shareholders.

To mitigate the impact of commodity price fluctuations, most FMCG firms typically pass on the benefits to consumers by either reducing prices or offering larger product quantities. They anticipate a surge in demand for premium and larger pack sizes, buoyed by a robust urban market and modern trade channels.

Looking ahead, analysts forecast a double-digit growth trajectory for the FMCG sector, driven by increased volumes, market share gains, and enhanced rural penetration through the reintroduction of popular price packs, previously prominent during periods of high inflation.