After the disappointment of 2022, where fast-moving consumer goods (FMCG) remained static, all eyes were on 2023, expecting a revival. According to Kantar’s FMCG Pulse report, the year seemed to start well, growing at 4% in the first quarter, but close inspection showed that it was all on the back of one category, atta (wheat flour).
The report further reveals that atta had grown by 29% in that quarter, and given that atta generated 16% of all FMCG volume, this level of growth caused the FMCG numbers to burgeon. Atta has continued to grow in double digits, throughout 2023, and as a result though FMCG seemed to have grown at 6.1% in 2023, removing atta from the mix brought the growth down to 2.7%. Incidentally, 2.7% is also the population growth in the year, which means that FMCG volumes have grown purely on the basis of household population growth.
Additionally, the out-of-home FMCG landscape in India witnessed a transformation in 2023, with FMCG volume and value doubling compared to the previous year. Factors such as increased mobility, heightened consumer engagement and evolving workplace dynamics, were key in propelling this massive growth.
Furthermore, the report highlights that it is not prudent time to expect the out-of-home trends to be in sync with the in-home trends because the effects of the pandemic behaviours are still lingering beneath the numbers, particularly in the case of out-of-home; and secondly due to the out-of-home data is based on just eleven of the food and beverage categories.
Moreover, the Indian beauty and personal care industry is experiencing a surge, with numerous brands making their mark in the market. The personal care sector grew at 15% in value in 2023 with products including soaps, deodorants, hair wash, hair colours growing almost in double digits. The convergence of e-commerce and the pervasive influence of social media has significantly contributed to the escalating demand for a wide array of personal care products.
However, the hair care segment still has room for growth as the majority of the population primarily uses shampoo, hair oils and occasionally, hair colours at home. Other products such as conditioners, masks, styling products are still at a nascent stage. If we consider a basket of hair products containing shampoo, hair oils, conditioners, hair masks, hair colours and hair styling products (which include serums, waxes, among others), consumers are picking up just two products on average to use for their hair care routine.