FMCG growth moderates in June quarter: NielsenIQ

India’s fast-moving consumer goods (FMCG) sector witnessed a moderation in growth during the June quarter of 2026 amid a broader consumption slowdown, with rural markets recording a 5 per cent decline in volumes, according to a quarterly report by NielsenIQ.

The slowdown in the country’s FMCG sector has now widened beyond a handful of categories to a broader basket of products, signalling a more systemic demand slowdown driven by rising input costs and weakening consumer sentiment, it said.

FMCG slowdown is no longer confined to core categories. Until Q1 ‘26, weakness was concentrated in a few categories. By Q2 ‘26 (June quarter), macro pressure is visible across a wider basket, creating a more systemic slowdown,” said the NielsenIQ FMCG Quarterly Snapshot for April-June 2026 (AMJ ‘26).

As many as 68 per cent of FMCG categories registered a decline in the April-June quarter, indicating that consumption pressures have intensified and spread well beyond core categories, the report said.

The report classified FMCG categories into four bands based on the severity of the slowdown, with the impact varying sharply across product segments.

Only 8 per cent of categories fell under the “Least Impact” band, described as “islands of growth amid macro slowdown”. These included vermicelli and noodles, packaged rice, hair oils and liquid toilet soaps.

Another 25 per cent of categories were classified as “Low Impact”, indicating muted momentum but relatively stable demand. This group comprised packaged atta, non-refined oils, utensil cleaners, and palmolein oils.

The largest share, at 35 per cent, was in the “Medium Impact” category, where emerging headwinds were seen having a moderate negative effect on momentum. Iodised salt, biscuits, salty snacks and shampoo were among the products in this band.  At the other end, 33 per cent of categories were classified as “Heavy Impact”, the most severe band, reflecting strong growth headwinds. Washing powders and liquids, refined oils, detergent cakes and bars, and toilet soaps were among the products in this group, pointing to pressure across home care, personal wash and edible oils segments.

Overall, 68 per cent of FMCG categories fell in the Medium and Heavy Impact bands, pointing to meaningful growth pressure during the quarter, while only 8 per cent of categories were classified as relatively resilient.

The spread of category-level decline aligns with sharper rural distress, where overall volumes fell 5 per cent against a 2.1 per cent rise in prices, dragging rural FMCG value down 2.9 per cent.

 In the June quarter, which dominates rural distribution with an 82 per cent sales share nationally, “dragged rural FMCG into decline”, while organised trade sustained urban growth. Its volume was down 6 per cent.

Modern trade and e-commerce continued to post strong volume growth of 17.5 per cent and 34.8 per cent, respectively, with expansion into non-metro markets.

“Non-metros are emerging as the next growth driver for E-commerce,” the report said.

Now, non-metros are growing “3X faster than Metros in E-commerce”, though metro markets still contribute 68 per cent of e-commerce, it added.

According to the report, growth momentum shifts towards organised channels in the urban markets, while consumption in traditional trade stalls for both urban and rural cohorts.

 Now, e-commerce share reaches 21 per cent in the top eight metros and 25 per cent in southern metros, said the NielsenIQ report.

Category-wise, food (64 per cent share) grew 0.9 per cent in value with volumes down 1.1 per cent. Home and personal care (32 per cent share) grew 1 per cent in value despite a 4.3 per cent volume decline, cushioned by a 5.4 per cent rise in prices. Over-the-counter (OTC) products (5 per cent share) contracted 3.1 per cent in value with volumes down 5 per cent.