The FMCG industry expects consumption growth in 2025 after navigating a challenging year marked by high inflation and rising input costs. Signs of recovery, including easing food inflation and revitalized rural demand, have sparked optimism across the sector. Industry leaders are hopeful that government initiatives and consumer trends like premiumisation will propel growth in the new year.
FMCG industry struggles amid high inflation
2024 was tough for the FMCG sector, with soaring prices of essential commodities like palm oil, cocoa, and wheat. These challenges forced companies to adopt strategies like price hikes or shrinkflation, impacting consumer volumes. Food inflation further strained middle-income groups, reducing discretionary spending to just 25% of retail purchases.
Easing inflation sparks optimism
Despite the hurdles, the FMCG industry anticipates a recovery. Industry experts like Emami’s Vice Chairman, Harsha V Agarwal, believe that easing food inflation and robust government spending on infrastructure will drive consumption growth.
Dabur CEO Mohit Malhotra also pointed to promising rural demand and urban recovery trends, supported by premiumisation—a shift where consumers pay extra for high-quality products.
FMCG industry eyes budget support and rural revival
The upcoming budget could provide much-needed relief for stressed households, boosting spending power. Tata Consumer Products CEO Sunil D’Souza highlighted evolving consumer trends, such as convenience and health-conscious choices, as major growth areas.
Premiumisation and quick commerce lead the way
The trend of premiumisation is transforming the FMCG landscape. Urban consumers, particularly Gen Z and millennials, are driving demand for healthier, premium products. Simultaneously, quick commerce platforms are reshaping the grocery market, enhancing convenience and accessibility.
Sustainable growth strategies for FMCG brands
Innovation and digital transformation remain critical for the FMCG industry. Leaders like Marico CEO Saugata Gupta emphasize affordability, sustainability, and personalisation as key drivers of long-term growth. Companies are also prioritizing direct-to-consumer models and investing in marketing to stay competitive in a crowded market.
As the FMCG industry expects consumption growth, 2025 promises a fresh chapter fueled by rural resurgence, urban demand recovery, and evolving consumer preferences. The road ahead is challenging, but the sector is well-positioned to adapt and thrive.
