Festive stocking, better retail execution lift FMCG growth in October

Both are at multi-month highs. Bizom tracks value growth across FMCG categories in 10 million retail outlets. It does not report volume growth. The FMCG growth comes on the back of an extended festive calendar this year, with Navratri, Dussehra, Durga Puja and early Diwali stocking all falling in October. This provided a stronger boost to sales compared with last year, when the timing of festivals resulted in some demand and product placement being spread across September and October.

This year, the entire Navratri period, Dussehra, Durga Puja and early Diwali stocking happened in October. That has aided growth,” said Parth Sethi, growth officer, CEO's office, Bizom. The acceleration also reflects improved retail execution, with product placement across outlets rising 8% year-on-year in October, compared with 4% in September. The improvement was more pronounced in rural markets, where placement increased 9% in October, against 6% in urban markets for the same period.

In the last few years, most FMCG companies have improved direct reach in rural areas, putting more sales force in these markets, as they look to improve penetration of their products in these regions. While FMCG growth in recent months has been supported by price increases and rural demand, October's performance points towards a broader recovery in consumption. Sethi said there were signs of pent-up demand being released, especially in urban markets due to the festive season.

"Demand continues to stay resilient. We've seen both urban and rural demand remain positive. This is showing up in terms of how well our brands are holding up in our ability to price and yet maintain volumes," Priya Nair, CEO & MD, Hindustan Unilever (HUL), said. In a conversation with FE, Tata Consumer's MD & CEO Sunil D'Souza said that demand was holding up despite the company taking price hikes in tea and salt.

"We remain confident of delivering continued double-digit top-line growth and margin expansion in the second half of FY27," D'Souza said. In urban markets, commodities, dairy products, home care and packaged foods registered double-digit growth, supported by festive purchases and higher household spending, it said. Price increases, however, continued to contribute to the overall value growth. Category-specific price hikes accounted for around 8-9% of the value expansion, Sethi said.

Edible oil prices increased within the commodities basket, while spices saw relatively little price movement. Packaged foods and dairy products, including milk and value-added dairy products, witnessed price increases of around 10-15%, depending on the category. With companies entering the final stretch of the festive season, the extent to which this demand sustains beyond October will be an important indicator of the durability of the consumption recovery.