Downturn in FMCG consumption is cyclical rather than structural: BN Group CEO Anubhav Agarwal

In an exclusive conversation with Awadh 360, Anubhav Agarwal, MD and CEO, BN Group, spoke on decline in urban FMCG consumption, health-consciousness in Indian market, and BN Group's foray into Africa

There are reports of a decline in urban FMCG consumption. What are your readings of the sector?

Urban FMCG consumption has certainly seen some deceleration, largely due to inflationary pressures, shifting consumption patterns, and cautious spending by consumers. NielsenIQ’s FMCG report for 2024 says urban markets have experienced a decline of around 2.4% in volume terms, with rural markets also facing sluggish recovery. This slowdown has been particularly pronounced in discretionary and premium categories, while essentials and value-driven products continue to hold ground.

However, I believe that this downturn is cyclical rather than structural. There are several green shoots that point toward a rebound. For instance, health and wellness-related FMCG categories such as fortified foods, immunity boosters, and plant-based products have continued to witness double-digit growth despite the overall sector slowdown. Moreover, with urban consumers increasingly adopting e-commerce channels, NielsenIQ estimates that digital FMCG sales in urban India could grow by 30% CAGR over the next few years, creating new opportunities for brands to innovate and optimize their offerings.

In my view, the future of urban FMCG will depend on a fine balance between value and innovation. Companies that focus on affordability, sustainability, and health-conscious offerings will be better positioned to capture evolving consumer preferences. By streamlining operations, leveraging data-driven insights, and introducing differentiated products, FMCG players can reignite urban demand and capitalize on emerging trends.

Can you offer a nutritional product at a price range that caters to the masses as well, especially because the Indian market is getting health-conscious but remains price-sensitive?

Yes, and this is an area we are actively working on. We recognize the growing demand for affordable, nutritious options, particularly as more Indian consumers become health-conscious. Our strategy is to democratize access to nutrition by focusing on value engineering—offering high-quality products without inflating costs.

We are currently expanding our ‘Nutrica’ line of health-focused edible oils, designed to offer better heart health and immunity at accessible price points. Additionally, we are exploring fortified staples and functional foods that deliver enhanced nutritional value, specifically catering to the price-sensitive yet health-driven Indian middle class. By leveraging local sourcing, efficient supply chains, and economies of scale, we aim to make health-based FMCG products more inclusive.

Tell us about your foray into Africa. What is the vision behind it?

Our expansion into Africa is part of a larger vision to create a vertically integrated, global-scale operation in the edible oil and FMCG sectors. With Africa emerging as a key market for both production and consumption, we see immense potential in building sustainable, end-to-end supply chains within the continent.

To that end, we are investing $1 billion in Africa, with a focus on building advanced manufacturing plants and establishing partnerships that will enhance local production capabilities. This investment is designed not just to tap into the region’s rich agricultural resources but also to contribute meaningfully to local economies by creating jobs, empowering farmers, and facilitating knowledge transfer.

Our ultimate goal is to position BN Group as a global FMCG leader with a strong foothold in emerging markets while driving innovation, sustainability, and affordability across our product lines. We believe that Africa will play a pivotal role in helping us achieve our long-term target of $3 billion in revenue by 2030.