Resilience, adaptability, premiumisation drive FMCG sector in 2024: Sriram Padmanabhan

As we conclude another year, it is essential to reflect on the key developments, challenges, and achievements that have shaped different sectors throughout the past 12 months. The year 2024 has been marked by dynamic shifts, rapid innovation, and the continued adaptation to both external factors and emerging trends.

Adgully’s annual feature – REWIND – revisits different sectors and identifies the key developments as well gauges the long-term impacts of those developments. We speak to a cross-section of industry leaders to bring a 360-degree view of the industry landscape, the growth trends, financial performance, disruptions, innovations, challenges and more.

In this Rewind 2024 article, Sriram Padmanabhan, Marketing Director, Danone India, reflects on the year gone by for the FMCG industry in India, impact of broader Indian economy on the growth and investment in the FMCG sector, trends and developments dominated the FMCG sector, and more.

Overview of the FMCG industry in India in 2024

The FMCG industry in India during 2024 continued to demonstrate resilience and adaptability amid evolving consumer preferences and a dynamic market landscape. With a strong push towards health, wellness, and sustainability, brands are innovating to meet the demand for better-for-you products, transparency, and eco-friendly practices. Rural markets remain a critical growth driver, supported by increased connectivity, rising incomes, and enhanced distribution networks.

Digital transformation and e-commerce have significantly reshaped consumer engagement and purchasing patterns, offering convenience and access to a wider range of products.

At Danone India, we see immense potential in these shifts, especially in nutrition and specialized health segments. By leveraging our expertise and insights, we are committed to addressing the evolving needs of Indian consumers and contributing to the industry's sustained growth and transformation.

While there have been some challenges, it’s clear that the FMCG industry is evolving rapidly, adapting to new consumer needs, and preparing for a bright future driven by innovation and the aspirations of India’s people.

Indian economy and the FMCG sector

India’s robust economic growth in 2024 has positively influenced the FMCG sector, particularly in the health and nutrition category. Rising disposable incomes, a growing middle class, and heightened health awareness have spurred demand for specialized and functional nutrition products. Consumers are increasingly prioritizing preventive healthcare, driving a shift towards fortified foods, dietary supplements, and personalized nutrition solutions.

The government’s focus on health initiatives and policies, such as promoting nutritional security and wellness programs, has further boosted growth in the sector. Additionally, increased urbanization and digital penetration have enabled better access to health and nutrition products in Tier 2 and Tier 3 cities, enhancing overall market reach.

At Danone India, we align with these trends by investing in innovation and localizing our portfolio to cater to diverse nutritional needs. This positive economic environment inspires us to deepen our commitment to delivering science-backed, high-quality nutrition to Indian consumers.

Key trends and developments

In 2024, the FMCG sector in India witnessed several key trends shaping its growth and evolution. A pronounced focus on health and wellness dominated, with consumers actively seeking fortified, functional, and sustainable nutrition solutions. This has accelerated innovation in the health and nutrition space, paving the way for tailored and science-backed offerings.

One of the most significant trends has been the rising focus on premiumisation, driven by consumers’ growing preference for high quality, value-added products. This shift highlights an increasing willingness among consumers to prioritize quality and value over price. The combination of rising disposable incomes and aspirational choices is fueling this trend. Today, consumers are making conscious decisions to invest in health products and nutritious food, underscoring a stronger focus on health and wellness. Importantly, this trend is no longer limited to metropolitan areas. It is increasingly gaining traction in Tier 1 and Tier 2 cities, reflecting a widespread change in consumer aspirations and purchasing behaviors.

Digital transformation continues to shape the sector, with e-commerce platforms and D2C models enabling greater accessibility and personalized consumer experiences. Additionally, regional and rural markets contributed significantly to growth, fueled by enhanced connectivity and localized product offerings. Consumers also gravitated towards convenience-focused formats such as ready-to-eat and ready-to-drink products.

At Danone India, we have embraced these shifts, focusing on science-led innovation, sustainable practices, and leveraging digital solutions to meet consumer demands effectively.

Danone India’s performance in 2024

In 2024, Danone India achieved significant milestones, reinforcing our commitment to advancing health and nutrition. Our consistent double-digit growth this year was driven by a strong emphasis on science-backed innovation and a deep understanding of India’s unique nutritional needs and cultural landscape. By combining global expertise in research and product development with localized insights, we introduced solutions that resonate with Indian consumers while meeting international standards.

Danone India remains committed to addressing critical challenges in food and health, empowering individuals to make healthier choices. In 2024, we strengthened our mission to bring affordable, high-quality nutrition to every corner of the country.

Also Read: Indian apparel industry crafts a remarkable story of resilience in 2024