Weekly FMCG Update: Unbranded growth; mixed Q1
The FMCG sector shows signs of recovery in Q1 FY26, driven by rural growth and easing inflation. However, unseasonal rains impacted summer sales, and urban consumers increasingly favour unbranded goods.
16 Jul 2025 | By WhatPackaging? Team
Q1 FY 2025-26 saw FMCG companies experiencing a sequential revival in volume growth
Urban unbranded, rural branded growth
Urban Indian consumers are increasingly opting for unbranded goods and new-age brands, driven by online shopping and inflation, while rural consumers favour established FMCG brands. This divergence highlights a volume growth gap, with unbranded urban products growing faster. Traditional firms face the dual challenge of attracting unbranded consumers and competing with agile digital-first brands.
Mixed Q1 for consumer goods firms
Leading consumer goods companies like Dabur, Marico, and Godrej are anticipating varied demand in Q1 FY 2025-26. Strong performance in edible oils and home/personal care categories is contrasted by a subdued summer beverage market. This mixed outlook is primarily attributed to unseasonal rains and cooler temperatures impacting seasonal product sales.
FMCG sector sees recovery signs
Consumer goods firms Godrej, Marico, and Dabur report a sequential recovery in both urban and rural markets for Q1 FY26. Easing inflation, favourable monsoons, and government policies are driving single-digit volume growth, offering some relief after five quarters of slowing demand. However, unseasonal rains affected summer product sales, and some inflationary pressures persist.
Monsoon dampens Q1 summer sales
The April-June quarter of FY26 saw fast-moving consumer goods companies experiencing a sequential revival in volume growth, though price-led growth remained limited. The early arrival of the monsoon significantly impacted sales of typical summer products such as juices, soft drinks, and cooling hair oils, leading to anticipated year-on-year declines in these categories.