FMCG industry to witness ‘significant growth’ in FY24, says Jyothy Labs

financialexpress.com:

The fast moving consumer goods (FMCG) sector is expected to see a ‘significant growth’ in FY24 with rural demand showing improvement and inflation beginning to moderate, said Jyothy Labs in its latest annual report. The urban demand continues to remain steady, the report said.

Growth is “fuelled” by large packs as there is a distinct trend of consumers upgrading to medium and high-value packs for its various key FMCG categories, said Jyothy Labs, maker of branded products like Ujala, Henko, Margo, Exo and Pril.”In this pack size transition has been observed in beverages, personal care, and branded product categories. Now that input prices have exhibited a downward trend and end-consumers have sufficient purchasing power, FMCG businesses are likely to experience an increase in the volume of demand and consequently volume-led growth this year,” it said.

The urban demand is steady now and the rural market is “increasingly exhibiting signs of normalcy” helped by easing inflation and growing agricultural revenues, which are causing a gradual recovery in those regions. Besides, various government initiatives, including the minimum support price (MSP), increased spending on rural infra, and rising credit to agriculture and other non-agricultural economic activities, will increase employment and income levels in rural areas, thereby driving demand for FMCG products, it said.

“With the rural economy increasingly exhibiting signs of normalcy as a result of an improving labour market and rising terms of trade for rural production, the demand for FMCG products will increase in 2023,” said Jyothy Labs. Consumer spending was influenced by inflation over the previous year, which has been reflected by consumers in the shift to smaller