FMCG manufacturers hoping for demand revival in H2FY25 on monsoon revival

The country’s manufacturers and marketers are expecting a revival in demand by the second half of FY2025. A better monsoon and higher agricultural yields, they say, have the potential to lift the otherwise subdued consumer market in India.

According to Mohit Malhotra, Chief Executive Officer of a homegrown FMCG major Dabur India Limited, it is now expected that the rural demand to back soon. Factors like a normal monsoon, backed by the government’s initiatives like increased allocation to the rural jobs scheme, and boosting agricultural output will help the industry and the economy overall. “Now, with normal monsoon and volume growth, we will see a gradual uptick of business,” he says. “We are targeting mid- to high single-digit growth for the consolidated business, and aiming to grow faster in most categories, thereby gaining market share.”

Suresh Narayanan, CMD of Nestle India has been stressing on the need of a normal and well-distributed monsoon to cool off the surging agri-commodity prices. Over the last few years, prices of key raw materials like milk, wheat, and edible oil have been fluctuating – putting manufacturers in a spot.

According to Sanjiv Puri, Chairman & MD, ITC Ltd., the demand scenario, especially in the rural market, will get better in the later part of the financial year. “One of the reasons why rural were impacted was the weather was unkind and the rural economy is indexed to the weather. We have witnessed favorable conditions for the current crop season and expect to see better conditions that augur well for consumption,” he says.

One of the key challenges, is the stress that has been faced by the economy in terms of subdued consumption post-Covid, especially in the rural economy. According to Puri, the weather and climate-related disruptions have impacted the rural economy more. That, however, is changing - albeit slowing. “We are seeing signs of improvement and we will see better growth going forward in terms of consumption. However, we need to ensure a more resilient rural economy” which will help the country’s economic prospects further.