FMCG sector to have sustained growth rate of 7-9% in 2024: Report

The FMCG sector is expected to have a sustained growth rate of 7-9 per cent in 2024, supported by government initiatives to stimulate consumption and create job opportunities, a report said.

The FMCG sector's resilience and adaptability, coupled with robust government support and digital transformation initiatives, position it favourably to navigate through uncertainties and emerge stronger.

"Looking ahead, the FMCG sector in India is poised for sustained growth, with forecasts indicating a 7 to 9 per cent expansion in 2024," a report from ICICI Lombard General Insurance said.

However, the sector faces challenges such as "inflationary pressures, subdued consumer confidence, and prevailing unemployment rates". Now, the FMCG industry has a "burgeoning economic footprint", which exceeds Rs 9.1 lakh crore and has a "pivotal role" in driving India's economic growth and employment generation, it added.

Moreover, the online sales channel for FMCG is also increasing and has been valued at Rs 1.7 lakh crore. Segments such as D2C reflect a "rapid digital transformation and evolving consumer purchase behaviour".

"Such digitalisation trends underscored the industry's adaptability to changing market dynamics and its proactive approach towards catering to digitally savvy consumers," the Corporate India Risk Index 2023 report said.

The FMCG industry was struggling after the pandemic and the rural sector was having successive degrowth for some quarters.

However, the industry navigated through showcasing resilience and adaptability amidst evolving consumer trends and witnessed a notable upswing in volume and value growth in the second half of 2023.

The "Q3 2023 witnessed an impressive 8.6 per cent volume growth nationwide, with rural markets contributing significantly with a 6.4 per cent growth rate", it said, adding that this signalled a favourable consumption environment.

Key governmental initiatives such as the Gati Shakti and Amrit Kaal Vision 2047 played instrumental roles in fortifying the FMCG sector's foundation and fostering long-term growth.

Based on these factors, "the risk index for the FMCG sector decreased from 68 to 66", it added.