India's fast-moving consumer goods (FMCG) sector has seen a shift in growth dynamics, with Parle retaining its crown as the most preferred brand for in-home consumption, according to the latest Brand Footprint India 2025 report by Worldpanel.

Parle's Continued Dominance

Parle has maintained its position as India's most-favoured FMCG brand for in-home consumption for an impressive 13th consecutive year. The brand achieved a Consumer Reach Point (CRP) score of 8,605 million, solidifying its stronghold in Indian households.

Britannia's Strong Performance

Britannia secured the second position in the in-home consumption category with 8,241 million CRPs. However, the company outshone its competitors in the out-of-home consumption segment, leading with 655 million CRPs.

Top 5 In-Home FMCG Brands

The report highlighted the top five in-home FMCG brands in India:

Notably, Surf Excel made its entry into the top five with an impressive 24% CRP growth.

FMCG Sector Growth Slowdown

The overall FMCG brand CRP grew by 4.3% to reach 120 billion in 2024. However, this growth rate represents a slowdown compared to the 7% growth observed in the previous year. The deceleration was primarily led by the foods and beverages categories.

Dairy Sector Shows Resilience

While most categories experienced a slowdown, the dairy sector demonstrated modest improvement, with growth increasing from 5% to 6%.

Comprehensive Market Analysis

The Brand Footprint India 2025 report provided a thorough analysis of the FMCG market, examining 447 brands across various categories including food, homecare, health & beauty, beverages, and dairy.

This comprehensive study offers valuable insights into consumer preferences and market trends in India's dynamic FMCG sector, highlighting the continued dominance of established brands and the evolving landscape of consumer choices both in-home and out-of-home.

The Fast-Moving Consumer Goods (FMCG) sector in India is set for a potential uplift as the Centre proposes a significant restructuring of the Goods and Services Tax (GST) system. The proposed changes aim to simplify the tax structure by eliminating the 12% and 28% slabs, retaining only the 5% and 18% rates. This move is expected to have far-reaching implications for both consumers and FMCG companies, particularly in the food and beverage segment.

Impact on Product Pricing

The proposed GST restructuring is likely to bring relief to consumers, as many food and beverage items currently taxed at 12% would move to the lower 5% bracket. This shift could potentially reduce prices for a wide range of products, including:

• Edible oil
• Branded rice
• Butter
• Ghee
• Instant noodles
• Juices
• Dry fruits

FMCG companies are planning to pass on these tax savings directly to consumers, either through price cuts or by increasing product quantities.

Industry Response

Major players in the FMCG sector have already started outlining their strategies to leverage this potential tax benefit:

• Parle Products has indicated that smaller packs priced up to Rs 30 could see an 8-10% increase in quantity.
• For larger packs above Rs 50, Parle Products is considering price reductions of 5-7%.
• Amul expects significant benefits for its core dairy products. For instance, a 500ml butter pack could potentially see a price reduction of Rs 15.

Anticipated Market Impact

Industry executives are optimistic about the proposed changes, believing they will boost consumption during the upcoming festive season. Companies expected to benefit from this shift include:

• Bikaji
• Gopal Snacks
• Nestle India
• Dabur

It's worth noting that the home and personal care categories are likely to see minimal impact, as most products in these segments already fall under the 5% and 18% tax slabs.

Timing and Economic Factors

The proposed GST restructuring comes at a crucial time for the FMCG sector. The industry is anticipating a demand recovery driven by several factors:

1. Easing inflation
2. Good monsoon expectations
3. Growing momentum in rural markets

These economic factors, combined with the potential GST rate cuts, could create a favorable environment for FMCG companies to drive sales and potentially increase market share.

Conclusion

The proposed GST restructuring represents a significant development for India's FMCG sector. By simplifying the tax structure and potentially reducing costs for consumers, the government aims to stimulate demand and boost economic activity. As companies prepare to pass on the benefits to consumers, the coming months could see increased competition and innovation in the FMCG space, ultimately benefiting both consumers and the industry at large.