FMCG sector witnesses signs of recovery in Sept quarter

New Delhi : After an unprecedented decline of 19 per cent in the January-March quarter, the FMCG industry has displayed signs of recovery in the September quarter with a year-on-year growth of 1.6 per cent, according to market insight firm Nielsen.

The growth witnessed in the fast-moving consumer goods (FMCG) sector was also a reflection of positivity witnessed in the overall macroeconomic scenario amid opening up of the economy and easing of lockdown restrictions.

In its India FMCG growth snapshot for the third quarter of 2020, Nielsen said the FMCG slowdown in the second quarter saw a value decline of 19 per cent as compared to the same period of 2019. This was fuelled by massive disruptions in the production and supply chain, and low consumer confidence.

"The unlock from Q32020, saw a revival in the industry with a growth of 1.6 per cent versus a year ago. The revival was aided by businesses opening up with the pandemic reaching stable levels," it said. Markets started opening up in a phase-wise manner and store closures came down to an average of 3 days a month in Q3'20 from an average of 9 days a month in Q2'20.

After being cooped at home for a long time, consumers also started looking at resuming normal consumption levels, Nielsen added. In terms of products, Nielsen said with the opening of the economy all baskets showed signs of recovery, albeit with some clear changes that got reflected in consumers' product preferences.

"Consumers prioritised spending on essential foods during the locked down quarter and with the unlock quarter this accelerated to double digit growth. We saw an interesting trend in the non-food (Home care and personal care) categories too. The segment registered a movement towards revival with Unlock in Q3'20, indicating a need to move towards normalcy," it added.