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FMCG sector records some improvement

FMCG sector records some improvement

Author | exchange4media News Service | Monday, Jan 01,1900 8:43 AM

FMCG sector records some improvement

The fast moving consumer goods (FMCG) sector recorded a small improvement in trends in December 2001, according to a report released by broking house Motilal Oswal Securities, quoting ORG-MARG retail figures.

According to the report, degrowth in the sector came down to 2.9 per cent from 3.4 per cent in November 2001. The November figure in itself was an improvement over October's degrowth of 4.9 per cent. Hindustan Lever Ltd (HLL), Dabur India and Nestle India were among the companies whose performance improved while Britannia Industries maintained the momentum of its growth. However, prominent industries that witnessed a fall included Colgate-Palmolive.

The report ascribes the reduction in the FMCG sector's degrowth to HLL's good performance. The company managed to slash negative growth from 8.3 per cent to 5.5 per cent. Most segments HLL is present in showed better growth and cornered more market share. In toilet soaps, the downslide was contained at 10.9 per cent in December 2001 as against 15 per cent in the previous month. In detergents, washing powder grew 1.6 per cent in December (1.1 per cent) and degrowth in detergent bars came down to 4.7 per cent (5.9 per cent).

The report shows that in personal care, HLL recorded all-round improvement. Its toothpaste, Pepsodent, grew 12.4per cent in December 2001 (6.2 per cent) in volume terms. In contrast, the industry's volume degrowth was put at 8.8 per cent for the corresponding period. Close-Up too pared negative growth to 12.1 per cent from 17.4 per cent.

The shampoo category grew at 9.8 per cent in December. During August-November of last year, this sector's growth was less than six per cent.

According to the report, Britannia Industries was another company that beat the slowdown. Its biscuit business, which contributes to more than 80 per cent of sales, grew at 4.2 per cent (3.4 per cent). However, sales growth of one of its leading brands, Tiger, fell to 13.3 per cent in December last year compared to 14.7 per cent in the previous month. The sales of cheese grew to 17 per cent from 14.9 per cent. Good Day, Milk Bikis and 50-50 were the other Britannia brands that did better or managed to reduce negative growth.

Confectionery major Cadbury India's chocolate segment, which makes up 70 per cent of sales, bettered its November performance growth by 1.6 per cent. Flagship brand Cadbury Dairy Milk grew at 8.9 per cent in December 2001 (8.1 per cent). Beating sluggish growth during September to November 2001, 5 Star saw a 7.9 per cent growth in December. However, growth in beverages fell to 4.5 per cent from 11.1 per cent in November.

Dabur India was another company, which saw significant improvement in performance. Total sales clocked a fall of only 3.8 per cent compared to a degrowth of 9.1 per cent in November 2001.

Colgate saw 7.6 per cent degrowth in December 2001 as against seven per cent the previous month. While the industry's degrowth in toothpaste volumes amounted to 8.8 per cent, Colgate ended up with degrowth of 13.4 per cent. The performance of the lower-end brands was, however, quite satisfactory with Cibaca Top and Colgate Herbal registering 15.1 per cent and 8 per cent growth respectively. Degrowth in flagship brand Colgate Dental Cream rose in volume terms from 14.1 per cent to 16.1 per cent. Colgate Gel degrew by 18 per cent.

Nestle India witnessed a marginal improvement in sales with negative growth reducing from 4.7 per cent in November 2001 to 3.8 per cent in December 2001. The noodles segment, which contributes to 15 per cent of sales, grew from 18.4 per cent in November to 20.9 per cent. The chocolate segment saw almost a doubling of sales.

Source: Business Line
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