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Biscuits take the cake, detergents washed away

25-May-2004
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Biscuits take the cake, detergents washed away

The fast moving consumer goods (FMCG) industry is witnessing a major churn, with some categories logging a slide in growth while others climb the industry totem pole.

The hottest items in the FMCG industry are not soaps but biscuits and refined oils. The biscuits category is as big as washing powders and liquids, with each accounting for 7 per cent of the Rs 47,800-crore FMCG market.

While the biscuits market is grew at double digits rates (11.7 per cent), the washing powders market struggled with a 0.1 per cent growth, according to an AC Neilsen India retail store audit for 2003.

Ditto with refined oils and toothpastes. Each of the categories accounts for 4 per cent of the FMCG pie. While refined oils grew by 27.2 per cent, toothpastes witnessed a 9.7 per cent decline in 2003.

Toilet soaps — which account for the largest pie of about 10 per cent in the consumer goods sector — saw a growth of 2.7 per cent in 2003.

The biggest losers were packaged tea, detergent cakes and bars and tooth pastes. The AC Nielsen India retail store audit revealed that packaged tea actually declined by 10 per cent in 2003, closely followed by tooth pastes (a negative growth of 9.7 per cent). Detergent cakes and bars registered a decline of 4 per cent.

In washing powder and toothpastes categories, high penetration and price rationalisation by local players impacted value growth.

However, a category like biscuits, due to various new price points (Rs 5) and healthy advertising support, registered aggressive growth, analysts pointed out.

The FMCG market grew by a paltry 1.4 per cent in 2003 over the last year. The slow growth of the market as a whole was due to the poor performance of the rural FMCG market.

However, considering the fact that that purchases usually pick up with a lag effect, there could be a better growth this year provided the last year’s good monsoon repeats its performance, AC Nielsen executives said. Over a five year period (1999-2003), the FMCG sector grew by 4.4 per cent.

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