FMCG Outlook For 2025: 'Green Shoots, Premiumisation...' - Experts Bet Big On These Trends

The FMCG sector, after enduring a difficult 2024 marked by soaring input costs, rising inflation, and reduced urban consumption, is hopeful for a rebound in 2025. With some positive signs emerging, industry leaders are cautiously optimistic that consumption growth will resume, driven by premiumisation trends, government initiatives, and evolving consumer preferences.

Green Shoots for FMCG Growth in 2025
Despite a challenging year, the FMCG industry is spotting encouraging signs for the upcoming year. After a prolonged period of price hikes, which saw companies increase product prices by 3 to 5 percent or reduce pack sizes (shrinkflation) to maintain affordability, companies are optimistic that consumption will pick up in 2025. The easing of food inflation, along with a potential boost in government spending, has raised hopes for a resurgence in demand, especially in urban markets that were significantly impacted in 2024.

Emami Vice Chairman Harsha V Agarwal highlighted the shift in market dynamics, noting that food inflation had begun to ease, which should help stimulate consumption growth. A good monsoon and government spending on rural schemes were expected to further boost the sector in the coming months.

Premiumisation: A Key Driver of Value Growth
One of the key trends emerging in the FMCG industry is premiumisation, where consumers are willing to pay more for higher-quality or unique products. This shift is particularly prominent in urban India, where consumers are increasingly inclined towards premium products across various FMCG categories. Dabur India CEO Mohit Malhotra emphasized that the trend of premiumisation will continue to drive value growth in 2025. “Consumers are willing to pay a premium for products that offer better quality, unique features, or enhanced experiences,” he said, pointing to the ongoing evolution of consumer behavior in urban markets.
Tata Consumer Products MD Sunil D’Souza echoed this optimism, noting that health, wellness, and convenience would play an even greater role in the FMCG landscape in 2025. “Consumer trends such as premiumisation, health & wellness, and convenience are expected to gather pace,” he said, indicating that the industry would need to focus on innovation to cater to these growing demands.

Rural Demand on the Rise
While urban markets struggled, the rural demand has shown resilience, with consumption continuing to grow quarter after quarter. Companies are increasingly focusing on expanding their reach in rural areas, capitalizing on the growth of infrastructure and rural schemes. Coca-Cola's VP of Franchise Operations, Sundeep Bajoria, shared that rural India had witnessed a demand upturn, helping drive growth despite urban challenges. He also pointed to the increasing role of quick commerce platforms, which have transformed the grocery market and made products more accessible to consumers across urban and rural India.

The Role of Digital and D2C Brands
The shift to digital-first and direct-to-consumer (D2C) channels continues to be a significant trend in the FMCG space. Brands that focus on digital innovation and personalization are thriving, with younger consumers, especially Gen Z and millennials, playing an increasingly prominent role in driving consumption.
Marico's CEO, Saugata Gupta, discussed the ongoing transformation in consumer behavior, highlighting the resilience of digital-first and premium brands in the direct-to-consumer ecosystem. With changing consumer preferences and a growing appetite for personalized, sustainable, and premium products, FMCG companies must keep pace with rapid innovation cycles.