Double-digit growth unlikely for FMCG sector but revival expected next year: Nestle

Chennai: The FMCG sector is unlikely to touch double-digit growth but will not have a degrowth as witnessed by some other sectors like automobile, Nestle India Chairman & Managing Director Suresh Narayanan said.

He noted that there will be "period of low growths" for the FMCG industry but with "decent single digit", and the company would not be much impacted from the slowdown as its play in the rural areas is relatively less as compared to other players.

Rural markets contribute 20-25 per cent of Nestle's sales presently.

"As far as the economic climate and the FCMG trend are concerned, the numbers are speaking of a decline. Analysis of the data, not only the corporate results but if you also look overall Nielsen projected numbers, total FMCG growth is going southwards," said Narayanan in a media roundtable.

He added that unlike other sectors as automobile etc, FMCG would not have a degrowth as it deals with essential items and the average ticket size of sale is lower as compared to others.

"Yes, double digits will be hard to come by. You will not start seeing great encouraging results from the FMCG sector," he said.

But, the kind of issues faced by some other sectors may not get necessarily replicated in this sector because it still has a lot of fairly essential low payout, low budget items that are important for daily consumption, he added.

Growth in FMCG sector could be from modest double digit to decent single digit but not the kind some other sectors as automobile are witnessing, Narayanan said referring to the negative growth in some sectors.

He was however hopeful of FMGC sector getting back with double-digit growth in an year.

"As various people are talking about economic stimulus etc, monsoon looks like surfeit rather than a shortfall and hopefully it translates into a better agricultural situation. Automatically, there would be positive sentiments," he added.

Besides, Nestle, which is among the top three listed FMCG companies of India, was considering a "selective price increase" of some of its products as the commodity prices are increasing.