FMCG Sector Set for Revenue Growth in FY26 Amid Rural and Urban Resurgence
India’s fast-moving consumer goods (FMCG) sector is poised for a revenue rebound of 100-200 basis points, reaching 6-8% growth in FY26, according to a recent report. The resurgence is driven by improving rural demand, stabilizing inflation, and steady urban recovery, offering a positive outlook for industry players.
Rural Demand Strengthens as Inflation Eases
Rural markets, which faced a slowdown due to high inflation and sluggish income growth, are expected to regain traction as price pressures ease and economic conditions improve. This recovery is crucial for FMCG players, as rural consumption contributes significantly to sector revenues. With better farm incomes and government initiatives supporting rural employment, demand is projected to improve steadily.
Urban Consumption and Premiumization on the Rise
In urban markets, growing premiumization trends and a stronger consumer appetite for discretionary spending are further fueling FMCG expansion. Consumers in metropolitan areas continue to seek higher-value and branded products, particularly in categories such as personal care and health-focused foods. This shift toward premium products is boosting value growth for companies operating in the sector.
Volume Growth Expected to Improve
Despite pricing-led growth in recent years, volume expansion is now becoming a key driver. The report highlights that while price increases contributed significantly to past revenue growth, a more balanced volume-led trajectory is taking shape as inflationary pressures ease. This shift indicates a healthier market with more sustainable demand patterns.
Strong Outlook for Consumer Staples
Essential goods, including packaged food and personal care items, remain a key growth area. FMCG firms are focusing on strengthening their distribution networks and expanding product portfolios to cater to both urban and rural consumers. With rural demand reviving and urban consumption patterns evolving, the industry is expected to sustain a stable growth momentum in the coming years.
As companies adapt strategies to changing market dynamics, the anticipated revenue growth signals a positive phase for the FMCG sector. Brands that effectively leverage distribution channels, innovation, and pricing strategies stand to benefit in FY26.