Ghana’s FMCG sector showing signs of recovery – Maverick Research

Ghana’s Fast Moving Consumer Goods sector is showing signs of recovery amidst easing inflation pressures, Maverick Research has pointed out in its latest Maverick FMCG Index.

This is coming after a difficult two-year period of economic turbulence.

For the first half of 2024, FMCG volumes rose by 4.0% and value increased by 2.0%, indicating that inflationary pressures are beginning to ease compared to the previous year.

This rebound, it said, marks a potential turning point for the sector, which had been weighed down by high inflation and a struggling cedi in 2022 and 2023.

The report pointed out that Ghana’s inflation rate has been moderating, and consumers are gradually adjusting to food price increases.

“One of the key trends highlighted in the Maverick Research report is the shift in consumer behavior towards essential goods. Consumers are purchasing larger quantities of smaller packs, seeing this as a better value proposition. This shift suggests that while inflation has not disappeared, it is no longer accelerating at the same pace, allowing households to make more calculated purchasing decisions”, it mentioned.

The report also noted increased consumption of non-alcoholic beverages in the first half of 2024. This growth, it said, has been fueled by pack-size innovations and aggressive retail promotions by energy drink brands, as well as the entrance of new players in the ready-to-drink (RTD) market. These changes, it stressed have boosted the performance of the non-alcoholic beverages sector, providing some relief to a market that had previously seen stagnation.

However, the home and personal care categories continue to face challenges.

“Down-weighting and ongoing price hikes are extending consumers’ purchase cycles for these items,” said Ato Micah, Managing Principal at Maverick Research.

“Outlet owners and consumers are increasingly fatigued by the trend of down-weighting, as smaller SKUs often fail to meet the volume and distribution needs of the products they replaced”, it added.

Maverick Research’s data covers 60 FMCG segments, tracking 15,000 Stock Keeping Units (SKUs) monthly across Ghana, Côte d’Ivoire, and Cameroon.

The firm’s latest findings offer a nuanced view of Ghana’s recovering economy, which, despite recent improvements, remains vulnerable to global shocks and currency fluctuations.