10th Apr23 —FMCG sector outlook –CNBC Interview –Parle Foods ( Mayank Shah ) & other analyst tracking FMCG sector :
–seeing steady recovery since 1/2 Qtrs post softening of demand last year especially during 2nd and 3rd Qtr so Multiple reasons behind that —there is recovery in Rural which is aiding the overall demand , Urban demand was was strong and Rural is now improving since 1 to 1/2qtr
–In terms of no.s low single digit growth in rural India last year ( I.E fy22) but today we are seeing 5 to 6% demand growth in Rural India. Urban is growing at 7/8% continues ot grow since last year, this is all Volume growth.
–Strong double digit growth in Q4 which is improvment on Q3 as after the festive period there was tapering of demand & in Q4 categories we track have shown positive growth with only personal care category being flattish
–Key levers in Q4 is start of summers and Beverages see a spike in this Qtr. Beverages is up on a very strong base last year & on that basis its a positive side. Rural growth is 16.8% and Urban is 7.9% growth & total is 14.1% –This is due to 2 things –summer products stocking has happened & Kirana base in rural has grown up by almost 9.9% which is a great sign.
–Kantar’s Ramakrishnan : Report till January23 was subdued , the recovery is there in Urban & Rural is crawling its way up and not as good as urban
–Agriculture ministry —we will have bumper crop this year despite unseasonal rains, we might see some disruption but we will still get 112 Mn tons we will get. US data is projecting 107 Mn tonnes wheat for India & our own Parle data 102/103 Mn tons. In anycase even if we have 102 Mn Tonns we are safe on food security and its a little less than 104 Mn Tonns last year.
–Rural consumption has gone up , Wheat prices are higher than MSPs and its a positive sentiments. Demand in rural is good.
–Bizom’s Akshay D’Souza : Mar23 –overall growth for Mar was 3.6% over last year but 2 categories didnt do that well i.e Beverages was flat and Personal care was not that good. Packaged food / home care grew by double digit & its coming more stronger in from rural segment.
–Kantar’s Ramakrishnan : Impact of inflation –studied 6k households —discretionary spends have been impacted , staples have remained constant but consumers are believeing that price increases are softening and that is showing in uptick in consumption & its strongly showing in Urban
–Beverages saw good growth in last 2 yrs and hence its showing a bit tepid growth this time.
–Urban growth is primarily by premium products and growth is led by premiumisation and in rural its led by basic products.
–Pack sizes are moving to higher value & more premiumisation in personal care. Even in Dairy there is a shift towards value added products.
( Pardon the spelling mistakes , had to note down while analysts were speaking )
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