FMCG firms fret as sales in the hinterland see a slowdown

Written by Lalitha Srinivasan | Updated: Jan 7 2014, 04:29am hrs
Although rural incomes remain robust after a bumper rabi harvest, the hinterland is seeing a slowdown in the consumption of FMCG goods, reports Lalitha Srinivasan in Mumbai. Parle Products, makers of Hide & Seek biscuits, for instance, confirms rural sales have fallen 5 % across categories in the last few months, while Dabur India reports business has been somewhat lacklustre with a marginal drop in some segments. Praveen Kulkarni, GM (marketing), Parle Products, observes that the growth in rural sales has come off to just 4% in the nine months to 2013. Sunil Duggal, CEO of Dabur India, confirms business in rural markets has been dull over the last two quarters. Research firm IMRB International estimates consumption growth in rural markets slowed to 4% year-on-year between January and September 2013 from 7% in the year-ago period. Manoj Menon, group business director, IMRB-Kantar Worldpanel, says several categories are under stress with consumers down-trading to smaller stock-keeping units or even postponing expensive purchases.