FMCG firms eyeing 20% rise in 2023, bet on rural demand to grow the sector

The FMCG business is hopeful about at least 20 percent growth in 2023 after a ‘exponential boom’ in 2022. “We observed strong demand and a 30% increase from the prior fiscal year. Our expected revenue of Rs 4500 crores for the end of March 2023 has already been surpassed, according to Ashish Khandelwal, Managing Director of BL Agro.

In the run-up to Holi, the ongoing wedding season often results in a robust Q4 for FMCG companies. The market is in control, thus the Q4 and Q1 of the following fiscal year will be strong. This year it is stable, unlike last year when the Russia-Ukraine war caused it to increase, according to Angshu Mallick, MD & CEO of Adani Wilmar Ltd. The categories of basics like besan, dal, atta, and rice have significantly improved, and brands with high quality can grow and anticipate better outcomes, he noted.

The demand for FMCG companies comes from both urban and rural markets, but following a recent decline in demand, the sector is beginning to show signs of revival in the latter. The businesses reported growth in the urban markets during the third quarter that concluded on December 31, 2022. Due to optimistic winter crop sowing, evidence of stronger farm income, and ongoing government stimulus, rural markets, which account for around 35% of FMCG industry sales, are showing signs of improvement.

FMCG industry participants predict that current prices will remain stable and that there won’t be any price changes in the near future. “I believe that prices are stable right now. Consumers are embracing it now that it has descended from the top. At these prices, there is a strong demand. So, given that it is more technical in nature, I don’t believe prices are likely to decrease. These rates, in our opinion, are reasonable, remarked Angshu Mallick. The most sales are anticipated in the packaged goods, ready-to-eat segments, and health and wellness product categories.

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