FMCG Sector Eyes Revival: Navigating Inflation and Consumer Trends
The FMCG industry anticipates a revival in 2025 following a challenging year marked by high input costs and food inflation. Companies adapted by increasing prices and reducing package sizes. As inflation eases, consumer trends like premiumisation and rural market growth offer promising signs for the future.
- Country:
- India
The fast-moving consumer goods (FMCG) sector is looking towards 2025 with renewed optimism after a tough year in 2024. The industry faced steep input costs and soaring food inflation, leading to slow urban market growth. To combat these challenges, many companies increased prices and opted for shrinkflation, reducing packaging sizes but maintaining price points.
Industry leaders foresee a boost in demand, leaning on factors such as easing food inflation, a robust upcoming budget, and strong rural consumption. Vice Chairman and MD of Emami, Harsha V Agarwal, noted that while inflation is subsiding, roughly 75% of retail spending remains on essentials, leaving little for discretionary purchases.
Key players like Tata Consumer Products and Marico highlight shifting consumer behaviors, including premiumisation and the growing direct-to-consumer model. As urban markets await recovery, companies focus on innovation and increasing accessibility through both conventional and digital channels, preparing for sustained economic growth.
(With inputs from agencies.)