Prices of fast-moving consumer goods more than doubled over the decade
followed by kitchen staples, household care products and food and beverages, the Boston Consulting Group (BCG) along with industry body CII said in a report. The report said that the price increase has led to pressure on volumes of fast-moving consumer goods, or FMCG, as the quantum of price hikes remains firm. FMCG volumes reported a compound annual growth rate (CAGR) of 3.4% between 2007 and 2023 and 1.5% in the 12 months ended July 2023, as factors such as the covid-19 pandemic, high inflation and lower emphasis on innovation as well as category development weighed heavily on volume growth.
BCG tracked change in prices of multiple household goods and services over a ten-year period to cover college fees, FMCG including kitchen staples such as rice, pulses, flour, apart from household care products, electricity, fresh produce, fuel, clothing, inter-city travel, large appliances, four wheelers, local transportation, mobile and internet. Internet plans, mobile phones, local transportation and new vehicles reported the lowest change in prices over the last decade. “At a total category level, the FMCG industry has taken greater price hikes compared to other categories where households spend their money.
This is likely to be one of the reasons why volume growth has not been as strong. There has also been greater focus on profitability rather than growth by the large consumer goods companies. If one looks at it from an innovation lens, that has also been less i.e new launches," said Abheek Singhi, MD and senior partner, chair of practices, BCG.
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