Unbranded products surge in urban, branded holds strong in rural-OxBig News Network

Sales volumes of unbranded fast-moving consumer goods (FMCG) makers grew 6.1% in FY25 against a 5.1% growth at branded goods makers. Drilling deeper, the research firm found that in urban areas, unbranded products’ sales jumped 8.4%, outperforming those sold by large listed companies (2.1%) and other branded segments (3.8%). Meanwhile, in rural areas, brands sold by large listed companies grew at a strong 5.1%, the rest of the branded market at 4%, and the unbranded segment grew by just 2.3%.

Kantar tracked volumes of the top 22 listed companies, along with unbranded and other goods.

Also read: For FMCG Inc., the holy grail of volume growth is in sight

“While digital shopping might not yet move the needle in a big way when it comes to shares and volumes, the availability of brands and the proliferation of advertising into mobile phones are shifting perceptions on packaging, pricing, and branding among the urban shopper. The urban shopper is, therefore, becoming more brand-agnostic,” it said. “We also understand that value, perceived in terms of quality, aesthetics and story is becoming a weightier consideration for the shopper than price,” per the report.

While rural shoppers increasingly prefer established brands that have made greater inroads into rural markets through direct distribution, urban consumers, spoilt by greater choices both online and offline, are becoming less discerning about brands.

“The listed manufacturers, whose brands are often highly penetrated giants, have developed a strong rural strategy, consumer loyalty, and distribution network. Therefore, the rural shopper, who is generally becoming more aspirational and mimicking the urban shopper, is gravitating toward these brands. This is even more pronounced during tougher economic times, as we have time and again conveyed,” Kantar said in its quarterly update.

Also read: Maggi crisis to capex boom: Narayanan’s decade at Nestlé India

Overall, FMCG volumes grew 4.2% pan-India in fiscal 2025, a decrease from 6.6% in FY24. This growth was driven by a 4.4% jump in urban India and 4% growth in rural India.

Emergence of new categories

The report also pointed to the emergence of new categories such as ready-to-cook foods, washing liquids and muesli, which are growing significantly ahead of the overall FMCG market.

Washing liquids emerged as the fastest-growing category in terms of volume for the financial year 2025.

“The category grew 2.7 times year-on-year and added close to 24 million households since FY’23. Currently with a penetration slightly above 20%, the category has massive headroom to grow. Operating in the same fabric care sector, washing soaps are steadily losing relevance as shoppers move to products that leave less mess to clean up after. Fabric care is perhaps one category that is seeing a major behavioural upheaval, as more shoppers adopt liquid products,” Kantar noted.

The trend ties into changing consumer preferences as they trade up to more premium formats and upgrade to household products characterized by greater convenience.

Moreover, access to channels such as modern trade and quick commerce is also helping consumers upgrade to better products.

Meanwhile, companies like Hindustan Unilever Ltd (HUL) have been have been trying to capitalize on the trend, innovating in liquid detergents over the past decade. In 2023, its fabric cleaning brand Surf Excel crossed fetched $1 billion in sales. The company has extended Surf Excel from detergent powder format to now include detergent liquids, liquid capsules and sprays. It also sells brands such as Wheel and Vim.

Ready-to-cook vs. ready-to-eat

Meanwhile, ready-to-cook mixes (like idli, dosa batter, curries, etc.) is the only category to double its volume in the last two years. This segment added as many as 18 million new households in that time, and shoppers have doubled their annual trips to purchase these items. The growth is primarily driven by batters and mixes that are ready to be cooked, making it a high-potential category for the next decade, Kantar said.

Also read: Edible oil cos urged to pass on duty cuts to consumers

However, its related category, ready-to-eat foods, is quickly losing relevance.

This category, which comprises products that can be directly served, is one of three categories that have lost half the volumes in the last two years, according to Kantar. “Clearly, consumers desire speed but also freshness and partial control over their meals, which is driving these diverse behaviours within the same space,” it said.

Breakfast cereal trends

Additionally, muesli, porridge and oats have seen growth exceeding 1.5 times over the last two years.

However, one major category within this space that has failed to see any traction in the last two years is cornflakes—experiencing volume losses over the past two years. A lack of innovation and greater health benefits tied to the consumption of cornflakes have dragged down category growth, Kantar said. Meanwhile, more affluent urban consumers are opting for premium breakfast offerings such as granola, quinoa-based cereals, and high-protein mixes, which are gaining traction. Cornflakes appear to be the first victim as a result.