Second guess them at your own risk

Granular item-wise data on consumption across India is not available. The statistics ministry, however, provides production numbers for various non-durable consumer goods, which can be used as a proxy. 

There are two major limitations, though. The first is that production need not translate to domestic consumption; some of it could be for export, for example. Second,  production data can also be affected by opening and closing stocks, which could lead to error. The way out is to take an average of two years as stocks are rarely held for more than a year. There may still be a modicum of  uncertainty on exports, but it can be assumed that the direction of change would be the same. 

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Production numbers for 2013-14 and 2014-15 have been averaged and so have those for 2023-24 and 2024-25 to gauge consumption changes over 10 years. Using 2023-24 and 2024-25 eschews the post-covid pent-up demand syndrome. To gauge spending habits, per capita production numbers can be compared.  Some interesting trends emerge from an analysis of major consumer products whose production (and thus likely consumption) has changed significantly—by more than 10%, i.e.—over 10 years. 

First, sin products present a mixed picture. Hard liquor has witnessed a decline (-29.2%), while wine has seen a dramatic increase (120.6%). This appears to reflect the growing belief that wine is better or good for health. Also, wine has become a lifestyle choice among upwardly mobile classes. The decline in beer is significant (-19.3%), as this can mean migration of consumers to either wine or toddy. 

Toddy is usually consumed by lower income groups, as it comes cheaper than spirits, and has witnessed a steady increase (57.7%), indicating that health is not a consideration for its buyers. But smoking data is less equivocal. There has been a decline in the growth of bidi offtake (-20.5%), without growth in cigarettes, perhaps because the fear of cancer has been a deterrent. 

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Second, the picture is clear on a move away from sugary products due obesity, diabetes and other concerns. Aerated drinks have declined (-22.2%), as there is growing awareness of their high sugar content. The same holds for packaged fruit juices, which too have seen a decline (54.3%). 

Third, there has been a distinct shift towards the use of coarse cereals for health benefits at the expense of finely ground (and unhealthy) wheat flour. This can be seen in a decline in per capita production/consumption of maida (-12.2%) as well as the group of bread, buns, etc (-14.2%). A switch to home cooked foods has taken place in parallel. 

Fourth, an increase in double-income couples and single working adults has manifested in a phenomenal rise in food delivery. This has in parallel led to an increase in prepared meals (up 180%). While per capita production is still very low, its growth is significant. The same holds for instant foods. 

Fifth, there has been an increase in the per capita production/consumption of milk (35.6%) and ice cream (53.9%), which is interesting as this means that access to these products has increased as income levels have risen. It is a positive sign for the country that families are spending more on dairy products, which typically see price increases of almost 5% every year. 

Sixth, growth witnessed in coffee is not very high but significant (13.9%). It has become a lifestyle beverage among people in upwardly mobile income groups. Consumption is visible at cafes, offices, airports and restaurants, besides homes. For tea, though, there has been a marginal decline in per capita usage. 

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Seventh, periodicals with printed  matter have witnessed a major decline, be it newspapers (-55.2%) or journals (-79.2%). Online consumption has  substituted printed material, even as younger generations tend to skip media outlets altogether and prefer news and views circulated on social media. This raises a red flag for the industry. 

Eighth, health-related products such as mosquito coils (146%) and capsules (158.1%) have witnessed exponential growth, as has been the case with medicines like antibiotics. This indicates greater attention to addressing illnesses. This has largely been a post-covid phenomenon, which seems to have led to some anxiety on the part of individuals as well as doctors. 

Lastly, the personal care segment of household goods has sent conflicting signals. Toothpaste (-58.3%) and hair oil are down. This is corroborated directly by consumption data at the aggregate level too; as per government data, personal care products have grown at a slower rate than overall consumption. However, the per capita consumption of shampoo has increased (30.3%). 

These trends reflect a fast-evolving consumer market. Fast-moving consumer goods (FMCG) companies may have to prepare for even more dramatic changes in future decades.  

These are the author’s personal views.

The author is chief economist, Bank of Baroda, and author of ‘Corporate Quirks: The Darker Side of the Sun’.