Kantar-2024年二季度快速消费品（英）

KANTAR

FMCGPulse

Q22024

P.SPradeep

BEATINGEXPECTATIONS?

25%growth,whiletheNIFTY50indexhad

jumpedby28%.FMCGvaluetoohasjumpedby10.2%inFY’24,andevenafterremoving

atta,acategorywhichhadcausedquiteafew

θuctuationsintheFMCGnumbers,valuegrowthisatarobust9.4%.

TheGDPnumbersreleasedbytheGovernmentofIndiaafewdaysago,pointtoastrongandrobusteconomicgrowth.The8.2%growthforthefinancialyearof2023-24,outpacedthe

2022-23growthwhichwasat7%.Duringthesametime,theBSESensexhasregistereda

Cautiontocontinue

Inourpreviousedition,wecalledouta

subduedperformanceforFMCG,atleastuntiltheQ3of2024,duringwhichweanticipate

seeingthegenesisofaturnaround.Ifanything,theθatnessofthefirstcalendarquarterof

2024isatestamenttothat.Muchofthe

annualgrowththatwehadtalkedaboutinthepreviousparagraphisaresultofthesuper-

strongQ2&Q3numbersin2023,whichwere

someofthestrongestnumbersputupintherecentquarters.

ThehumungousQ2of2023willcontinueto

keeptheQ2‘24growthincheck,becauseofthebaseefect,anditislikelythatwemay

evenseeaslightdipinthenextquarter.Whilethereisdefiniteeconomicprosperity,westill

maintaincautionforFMCG.

FMCGQuarterlyGrowth(CalendarQuarters)

Figure1

17.3%

137%

13.8%

12.8%.

6.6%6.1%

8.2%

6.8%

-0.9%

4.1%

2.1%

5.2%5.2%

Q2'22Q3'22Q4'22Q1'23Q2'23Q3'23Q4'23Q1'24

5.4%5.4%

-0.3%

ValueGrowthVolumeGrowth

Theruralmarch

ABrightstarinthisyearistheresurgenceof

theruralmarket.Rural’sgrowthstartedtrailingUrban’sgrowthsincethelastcalendarquarterof2022,andUrbanracedaheadwhileRural

continuedtolimpitswayforthemostpartof2023.

However,thestartto2024fromarural

perspectivehasbeenbrilliant,withRural’s

growthovertakingUrban’s;andtheruralwormislookingupward.

FMCGQuarterlyGrowth(CalendarQuarters)

Figure2

11.8%

8.0%

5.6%5.8%

.

5.8%

2.3%2.4%

-07%

Q2'22Q3'22

0.9%

Q4'22Q1'23Q2'23Q3'23Q4'23Q1'24

-4.3%

UrbanIndiaRuralIndia

3.5%5.0%4.8%4.7%

.0.0%

59%

Unfortunately,theUrbanmarket’strajectorycommunicatesstress.Itdidnotseegrowthforthreestraightquarters,anditiscontending

withahugeQ22023base.Therefore,Urbanislikelytoremainunderstress,whileRuralmayconsolidateitspositioninQ2.

SincetheElectionresultsareout,wewantto

modifythisparagraphabit.Hereistherevisedparagraph:

WithcontinuityintheGovernment,weexpectgreaterstabilityinthemarketandfewer

changestotheinterimbudgetproposedatthe

beginningoftheyear,whichhadgoodrural

focus.Weshouldalsobearinmindthatmorestatesareheadingforpollsinthecoming

months,andthesecondhalfshouldonlyseeariseinpopulistmeasuresfortheruralmarket.

Thismaynotboostimmediategrowth,but

woulddefinitelyprovidetheneededstabilitytotheruralmarket,andpossibletrendshocksareunlikelyforthemoment.

However,whatisyetuncleararetheRabi

harvests.CentralIndia,wherebulkoftheruralpopulusresides,receivedexcessrainfallintheyear,SouthIndia,aprominentrice,andspiceproducerhasreceivedbelow-parrainfalltill

now.Therearereportsthatrabiharvestsare

likelytobehitthisyear.Theefectsofthiswillbefelttowardsthesecondhalfmore,but

certainruralmarketscouldturnonthecautionswitchalready.

Evenwiththat,wedoexpectRuraltomaintainbettergrowthlevelscomparedtoUrbanfor

thereminderoftheyear.

TheRecordbreakers

Forthefirsttime,BottledSoftDrinkshavebreachedannualpenetrationof50%.

Followinguponamassive41%household

growthinMATMarch,2023thecategory

continuedtoaddmorehouseholdsand

expanded19%inMATMarch,2024.Ontopofthis,theaveragehouseholdhasexpandeditsconsumptionby250mlinthelasttwoyears.Withtheintensifyingsummerweather,the

categoryislikelytocontinueitsgrowththisyeartoo.

FabricSoftenersnowreachoneineveryfourhouseholdsinthecountry.Spendsonthe

categoryhavenearlygoneupby50%inthelastcoupleofyears,whileconsumption

jumpedbyabout180ml.WashingLiquids,

anotherlaundry-basedcategorybreachedthe100,000-tonmarkintheyear.Growingatnear50%involumetermsinthelasttwo-years,the

categorybenefittedfromanaverage

consumptiongrowthofnearly500mlintheconsuminghouseholds.

Consumptionmetrics

Shoppersnowshop156timesayear,forFMCG

–thiscouldbestore,ordigitalshopping.The

156timesequatestoonceinevery2.3days,orevery56hours.Theseshoppingtripshavebeengrowingforquitesometimenow,barringthe

lockdownperiod.However,thereisa

stagnationthatwehadhitinthelasttwo

quarters.Forthefirsttimepostlockdown,weregisteredtwosubsequentquartersinwhichthefrequencyretreatedalbeitminutely.

Addtothis,shoppersarealsonolongerbuyingmorenumberofpacksastheywere

purchasingearlier.Inthelastfourquarters,the

quarterlynumberofpackspurchasedhad

oscillatedbetween199and202.Thefour

quartersbeforethatitwasbetween185and192,andtheperiodpriortothatbetween163

and179.Thefrequencyandthepacktrends

indicatethatshoppersarenolongerreducingtheirpacksizes,butholdingontotheones

theyarebuying.Inotherwords,weareverylikelyatthejuncturewhereweseeshoppersbuyingslightlybiggerpacksfromnowon.

So,therearedefinitepositivesinthemarket–ruralbeingtheobviousone.Discretionary

premiumendcategorieslikewashingliquids

andindulgentproductssuchasBottledSoft

Drinkshaveperformedexceedinglywell,andthemarketmightbeatajuncturewhere

shoppersstarttoupsizeyetagain.However,afallingUrbancurve,coupledwithastrong

base-efectislikelytoconstrictthenumbersforthenextquarters.

MahimaBhatnagar

HOWINDIASPENDS?

BasedonKharcha2.0

Inθationmighthavesloweddownto

acceptablelevels,butitsefectsarenotlostontheconsumer.Wedidthefirstroundof

KharchainJuneof2022,aperiodwhenglobalinθationwasthetalkeverywhere.AnupdatetothatworkwasdoneinMarchof2024.Coveringadiferentquarter,uncoveredsomeinterestingfactsaboutseasonalexpenses,fewofwhich

willfollowinthisarticle.

Weaimedtounderstandtheshopperwallet,andthestresstheyarefeelingfinancially.

Despitetalksoflow-levelsofinθation,the

averageshopperhadspent18%moreinthequarterendingMarch,2024comparedtothequarterendingJune,2022.

Diversityinexpenses

AtypicalIndianhousehold,spentRs.49,418in

Q1’24.However,thisnumberisheavily

inθuencedbythelargerRuralmarket,where

spendswerearoundRs.41,215inthequarter.Urbanhouseholds,ingeneral,spent1.6timesmorethanrural.Ontheotherhand,theNCCSDE,thelessa代uenthouseholds,spendjust

aboutRs.38Kquarterly,whichis0.9Xthe

spendinrural.Whilemostclusterof

householdshaveincreasedtheirexpensesoverthelast2-years,theseNCCSDEhouseholds

aretheonlyones,whereexpenseshavegrownjustby1%.

Expensegrowthoverlastround

1.2X

1.2X

1.1X

AllIndiaUrbanRural

Figure3

Thesouthernpartofthecountryhasbecomethehighestspenders,havingincreasedtheirspendsby35%inthelasttwoyears.North

zonewasthehighestspenderinthe2022round,butitistheonlystatewherethe

expensescamedown.Southzone’shighspendgrowthisperhapsattributedtothePongal/

Sankrantifestivities,whicharebigcelebrations

intheregion,andinNorththelowspendsaremainlyduetoUtilitiesdroppingfroma16%

sharetoa9%share.SincethesurveyperiodisQ1’24,loweruseofair-conditioningcouldbeamajorfactorinthelesserutilityoutlay.This

indicatesthatwintersarerelativelylow

expenseperiodsintheNorth,andFMCG

playerscanpossiblymakeuseofthistime.

Thebigoutθows

Groceriesarethebiggesthouseholdexpense,accountingtoover24%ofallquarterly

expensesinahousehold.Thespendsonthe

categoryincreasedby19%.Thismeanssincethelastround,thejumpinhouseholdspendstranslatestoRs.2,000quarterly.

Categories'shareofwallet

Figure3

16%

24%

3%

5%

7%

16%

8%

9%12%

Groceries

Fruits,Vegetables&DairyUtilities&Rent

EMIs/DebtEducationCommuteFashion

Rent

Rest

BNPLisoneofthemostpopularpurchase

motivatorsforanaverageIndianhousehold.‘Buynowpaylater,’asitiscommonlyknown,whencombinedwiththeEMIschemesthat

financialinstitutionsofer,makesluxury

afordabletothemassmarketofIndia.Thepercentageofpeoplewhohavetakensmall

loanshasincreasedbyover2.5Xcomparedtopre-pandemicperiods,accordingtothecreditratingcompany,TransUnionCIBIL.Thisis

reθectedinKharcha2.0-thesteepestjumpbetweenthetworoundsofthestudy,isthe

mammoth87%increaseintheEMIshouseholdsarepayingout.

AcategorylikeFMCGisnotdirectlyimpactedbyEMIs,however,thepiethatisavailableforthesectortoexpandintogetssignificantly

smaller.

Theothermajorcategorythathasseena

steepjumpismedicalexpense.Theseexpenseshavejumpedbyamassive57%.A2023reportbyInsurtechcompanyPlumrevealedthat

IndiahasoneofthehighestmedicalinθationratesinAsia.EMIsandmedicalexpenses

togetheroccupy18%oftheshoppers’wallets.

Whatisunderstress?

27%ofhouseholdsinformedusthattheyhave

increasedtheirspendsoncookingoils;and

thereare5%ofthemwhosaidthattheyhaddecreasedtheirspendsonthesame.Clearly

morehouseholdschosetoincreasespendsinthiscategory,ratherthanreducingspendsonit,becauseitisanuncompromisablecategoryfromthehouseholdperspective.Thismeans,thestrongerthediferencebetweenthetwo

aforementionednumbers,greateristhe

categoryimportance.So,forthepurposeof

thisarticle,letuscallthediferencebetweenthetwonumbers,intheabovecase,22-pointsas“CategoryImportanceScore,”orCIS.

Spendoninternetandmobilephoneshasa

Thesentiment

Atthepeakofinθationin2022,only8%ofthehouseholdshaverespondedthattheyare

comfortablewiththeirthenfinancialsituation.AsofQ1’24,thisnumberhasjumpedto16%.However,inboththeroundstherewere34%ofthehouseholdsthatwerefindingitdi代culttomanagetheirexpenses.Inotherwords,athirdofIndiaisstillunderseverefinancialstress.

Thosethatarestrugglingarepresentacrossthea代uencelevels.However,whileinthe

upperNCCS,A&Bthepercentageofthosestrugglingreducedfrom32%to28%,inthelowerNCCS,i.e.,C,D,andEthepercentageincreasedfrom35%to40%.

CISof24,whichisoneofthehighestscores.

Thisisamerereθectionofhowintegralphonesandbeingconnectedhasbecometoone’slife.Eveninrural,thecategorymaintainsthesameCISscore,whichgoesontosaythatevena

typicalruralhouseholdisnow‘connected.’

OntheothersideofthespectrumaresectorsthathavethelowestCISscore,orinother

words,thosethatareexpendable.Leisuretravelisseenasthemostexpendable

category,withaCISscoreof-28.

Entertainmentandeatingouthave

significantlylowCISscoretoo--26%and-24%respectively.

Whatisencouraginghowever,isthatthe

shopperismoreoptimisticnowthanbefore.49%ofthemhadrespondedin2022,sayingthatthingswouldbecomeworseforthem

financially;thatnumberhasdrasticallyreducedtojust11%inthecurrentround.

Tosumup,yes,theworstofinθationisbehindus,however,therearepocketsofthemarketthatarestillundersomestress,however,theshopperislookingatthefuturewithgreat

optimism,eventhosewhoareunderstress,

andthisoptimismhasbeentheθagbeareroftheIndianconsumptionstoryforlongnow.

P.SPradeep,SharadWarke

RATEYOURPENETRATION

Weknowthatpenetrationisan

uncompromisablemetric.Drivingpenetrationsecuresafutureforyourbrand,becausethatis

theactivitythatnotonlybringsinmore

buyers,butmoreconsumption.However,oftenwhenwelookatpenetration,welookatitfromanannuallens.Andtheannualpenetrationisdefinedas‘beingpurchasedatleastoncein

theyear.’Thisdefinitionisamazingaslongasthemarketer’sobjectiveistostepintoas

manyhouseholdsaspossible.Butafterithassteppedin,andsetitsfoot,whenthejob

possiblybecomestosettlethereforalifetime,thentrackingonlyannualpenetrationmightnotsu代ce.

Hereiswhere‘penetrationrate’helps.We

define‘penetrationrate’astheratiobetweentheaveragequarterlypenetrationinayear

andtheannualpenetration.

PenetrationRate(PR)=

AverageQuarterlyPenetration/Annual

Penetration

ChangeinPenetrationvs.PenetrationRate

ChangeinPenetrationRate

Figure4

ChangeinPenetrationvs.PenetrationRate20.0%

15.0%

10.0%

5.0%

.

00%

%-5.0%

5.0%10.0%15.0%

-10.0

0.0%

-5.0%

-10.0%

-15.0%

ChangeinPenetration

So,abrandcanhave100%annual

penetration,butifunique25%ofbuyerspurchaseitineachquarter,thenits

penetrationratewouldbe0.25;whereas,ifall100%ofthempurchaseiteveryquarter,thenitwouldbethepenetrationratewouldbea

perfect1.0.Notethattheadjacentgraph

pointsoutthatpenetrationandpenetrationrateneednotmoveinthesamedirection.

Therearecaseswherepenetrationhasgrownandtheratedeclined,andvice-versa.

Letustakeareal-lifecategorylikechocolate-inMATMar'23theaveragequarterly

penetrationinUrbanwas37%,whilethe

annualUrbanpenetrationwas59%.Thus,thecategory'spenetrationratewas0.63.This

improvedto0.72inMATMar'24.Therefore,notonlyhasthecategoryaddedinmore

buyers,butmoreofthemarebuyingmoreoften.Ontheotherhand,anothersnackingcategorylikenoodlessawitsannual

penetrationrisingfrom64%to72%,butits

penetrationratefellfrom0.80to0.72.This

signifiesthatwhilethecategoryaddedinmorebuyers,moreofthemhavebecomeinfrequent.

Whataresomeofthelessonswecanlearnfromthis?

Localbrandsthriveinbuildingpenetrationrate.TataGeminiforexample,hasanannualpenetrationof2.8%,butitsaveragequarterlypenetrationtranslatedto2.1%intheyear,

givingitapenetrationrateof0.77.Likewise,

SunlightWashingPowderhasapenetrationofrateof0.69.Goodricketea,0.68,XXXwashingpowders0.67etc.,Infact,smalllocalbrandshaveagreatadvantageofcateringonlyto

theirbase,andtherefore,despiteseemingly

havinglowpenetration,oftenhaveloyalbase.

Legacybrandshaveagreaterchanceof

highpenetrationrate.ParleGhasa

penetrationrateof0.68,thehighestwhenit

comestoBiscuits.Thebrandhasarichhistoryof85years.Wheel,alsolaunchedsome45

yearsbackisthetoprankednational

detergentbrandintermsofpenetrationrate

withascoreof0.64.SurfExcel,whichhastheSurfbrandlegacyof65yearsalsosharesa

0.64penetrationratewithWheel.Parachute,

anotherhistoricalbrandleadstheHairOil

numberswitha0.62penetrationrate