New Delhi, Aug 8 (PTI) The FMCG industry's volume growth slowed to 3.8 per cent in June quarter 2024 due to macroeconomic headwinds which impacted the staple food categories, including packaged salt, wheat flour and palm oil, according to a report by data analytics firm NielsenIQ.

The industry saw a volume growth of 7.5 per cent in June quarter 2023 and and 6.5 per cent in March quarter 2024.

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"Urban consumption growth dips to 2.8 per cent from 5.7 per cent in Q1'24 while Rural growth is at 5.2 per cent vs 7.6 per cent in the last quarter. However, rural outpaces urban in most parts of India in terms of volume growth," it said.

Modern Trade, which includes supermarkets, hypermarkets, and large-format stores continues to exhibit double-digit volume growth at 10.9 per cent year-on-year. However, it was slower as compared to the March quarter.

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Volumes decelerated for traditional trade (such as Kirana stores) registering 3.1 per cent growth in Q2'24 (June quarter) compared to 5.6 per cent in the previous quarter, it added.

The FMCG consumption growth has been primarily impacted by the food sector, with growth at 2.4 per cent in June quarter compared to 4.8 per cent in March quarter, the report added.

"This moderation in volume growth is attributed to staple categories - packaged salt, packaged atta, and palm oil," it said.

In non-food categories, the volume growth was 7.6 per cent in June quarter 2024 compared to last year. Sequentially, it dropped from 11.1 per cent.

"In urban markets, Personal Care categories are witnessing a volume growth at 5.2 per cent in Q22024, while in rural it is resting at 8.3 per cent," it said.

In rural, high contributing categories Laundry and Utensil cleaners within Homecare witnessed slow consumption.

In June quarter, summer-specific categories such as soft drinks, packaged drinking water, prickly heat powder, and glucose powder reported strong growth.

"Soft drinks grew 2x faster than FMCG, however, experienced a volume growth at 9.2 per cent in Q2'24," it said.

Moreover, in the FMCG industry, large players continued to demonstrate stronger performance compared to small mid-players, and giants.

"Small players face challenges in keeping prices stable, thereby impacting their volumes," it said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)