Diwali boost: Commodities, confectionery lead FMCG sales growth in Oct

By Kritika Arora

Fast-moving consumer good (FMCG) sales grew 5.6% in October compared with September, with Diwali pushing month-on-month growth, according to retail intelligence firm Bizom. Commodities and confectionery segments led the growth, while sales of discretionary items like beauty and personal care remained subdued, it said.

While sales were 5.2% higher than the corresponding period last year, just in the Diwali period, they grew 10.6% over the festive week last year.

Akshay D’Souza, chief of growth and insight at Bizom, said essentials or centre-of-the-plate kind of commodities such as packaged rice, atta, spices and oil saw a big spike, whereas confectionery grew on the back of gifting packs. Chocolates had a double-digit growth, he said.

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However, sales of non-food discretionary items like beauty and personal care did not pick up as much, which indicates that consumers are still feeling the bite of inflation, D’Souza said.

Sanjiv Mehta, managing director of Hindustan Unilver (HUL), had recently said that while September saw better sales than the last two months, for October, one needs to look beyond Diwali as well to really assess demand. “That is when we will get a sense whether the offtake has been better than last year or not,” Mehta had said.

In the July-September quarter, HUL’s volumes improved 4%, supported by its premium portfolio, while the industry’s volumes fell 6% because of inflationary pressures.

Bizom’s D’Souza said since inflationary headwinds are still on consumers’ minds, companies may need to provide much more value to consumers going forward.

“We might see kiranas looking to liquidate stocks built up for Diwali before putting in new stocks in the post-festival period. This will drive brands with excess stocks on shelves to offer strong consumer and retailer offers to help these stocks fly off shelves even post the Diwali season, which did not happen the last two years as there wasn’t much build-up in stocks due to the pandemic,” he said.

Mayank Shah, senior category head at Parle Products, said their gifting range did well during Diwali and recorded nearly 12% growth over last year. While inflation might impact other categories, food as a category would not really be affected after Diwali, he said.

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Nevertheless, since inflation has been plaguing the FMCG industry with subdued volumes for months, Shah said most companies would decide by mid-November if they would continue festival offers on products to push demand.

During October, states that saw high Diwali stocking were Maharashtra (in cities like Kolhapur, Aurangabad, Nashik and Pune), followed by Tamil Nadu (Erode) and Gujarat (Jamnagar, Rajkot and Bhavnagar), Bizom said.

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