Rural households, once seen as price-sensitive, are now increasingly buying premium FMCG products.
A new report shows that Rural India’s share of premium FMCG volumes has surged to as much as 50% in 2025.
Rural households now contribute over 50% in the affordable premium segment and more than 42% in super-premium FMCG categories.
India’s rural households, once seen as a price-sensitive consumer class, are increasingly adopting premium products from fast-moving consumer goods (FMCG) companies. A new report by market research firm Numerator (formerly Kantar) says rural India’s contribution to premium FMCG volumes has grown sharply.
While premium brands currently account for just 15% of FMCG volumes in the overall Indian market, rural households’ share has risen from 30% in 2021 to as much as 50%.
The Worldpanel report by Numerator classifies premium goods into two types: Affordable Premium (priced 1.2–1.5 times the category average) and Super Premium (priced over 1.5 times the category average).
It claims that in the affordable premium category, rural households contribute over 50%, while in the super-premium category they account for over 42% of FMCG volumes.
What is Driving Rural Premiumisation
According to K Ramakrishnan, Managing Director – South Asia, Worldpanel by Numerator, rural consumers are becoming aspirational. The report said that while average urban spending on super-premium products grew 4% and affordable premium by 7% in the last five years, rural spending increased by 7% and 11% respectively, signalling growing rural aspirations despite near-term slowdowns.
“Premiumisation in India is no longer restricted to metros or high-income households. Rural consumers are becoming aspirational, local disruptors are redefining what ‘premium’ means, and even the most affluent households are rethinking priorities. The future will be about delivering value-led premium experiences through the right packs, attributes, and channels,” Ramakrishnan said.
The report says homegrown Indian brands are winning over super-premium consumers by combining health-focused, natural, and traditional attributes with regional dominance. Brands like Pansari Kacchi Ghani Oil in Delhi, Sikaram Groundnut Refined Oil in Tamil Nadu, and Fiona Sunflower Refined Oil in Karnataka and Odisha are growing rapidly by promoting benefits such as cold-pressing, antioxidant content, and vitamin fortification, while commanding a super-premium price index well above 150.
In other categories, Burhani Liquid Dishwash in Madhya Pradesh, AVT Gold Cup Tea in Tamil Nadu, and Meera Shikakai & Badam Shampoo in Karnataka and Odisha are also gaining share by offering authenticity and local trust. Many of these brands report high double- to triple-digit volume growth and strong market shares in their respective premium segments, showing that affluent consumers are willing to pay more for products that feel healthier, safer, and rooted in familiar regional traditions.
“Small, affordable pack formats are driving penetration and trial without diluting premium experiences,” the report noted, adding that a 75-gram pack of Sensodyne, a 30-gram pack of Nabati wafers, and a 6 ml sachet of Tresemmé shampoo are clear examples of how accessible packs fuel growth.
“Leading super-premium players like Dove, Malkist, Sensodyne, and Taj Mahal Tea are also unlocking growth by offering smaller, more affordable packs, balancing accessibility with a premium experience,” the report said.
Rural Households’ Impact on Premium Growth
The report analysed premium FMCG brands across 14 categories, including detergent bars, bar soaps, hair wash, toothpaste, tea, utensil cleaners, edible oils, washing powder, bottled soft drinks, atta, salt, skin creams, and biscuits/cookies, which together contribute ₹98,000 crore in value.
It showed that premiumisation slowed in 2024 due to rural consumption softness. Overall, rural volume growth for premium FMCGs slowed from 7% to 3% between 2024 and 2025. Category-wise, super-premium goods volume growth fell from 10% to 6%, while affordable premium dropped from 9% to 3% over the same period.
Meanwhile, in urban India, growth for premium FMCGs eased from 13% to 12%, super-premium from 13% to 7%, and affordable premium rose from 4% to 10% over the same period.
Wealthy Urban Households Delay Buying
The report also noted that among super-premium consumers in metros, there has been a visible volume drop, suggesting a shift in purchase priorities. Across all urban India, super-premium growth was flat at 3% in both 2024 and 2025, while affordable premium slowed slightly from 10% to 9%. Within high-income households earning above ₹40 lakh, super-premium volumes declined by 6% in 2024 and a further 5% in 2025, while affordable premium remained soft — falling 0.4% in 2024 before recovering to 4% last year.
In the ₹10–40 lakh income group, super-premium FMCG consumption growth dropped by 3% in 2024 before rising 3% in 2025, with affordable premium inching up from 1% to 7%. Even lower-income consumers showed moderation, with many trading down or balancing premium purchases more carefully.
The report says wealthy households earning over ₹40 lakh reduced their spend on groceries from 14% to 7% and on dairy from 16% to 6%, while increasing their share on rent from 4% to 12% and leisure travel from 5% to 9% between March 2024 and March 2025. In terms of shopping behaviour, the report showed 74% of urban affluent consumers postponing expensive purchases, 63% delaying premium buys, 50% actively avoiding premium products, and 48% often switching to lower-cost alternatives to manage budgets.
As urban households delayed their purchases, FMCG companies shifted their focus to rural India, where consumption was growing strongly, supported by a good monsoon last year. The latest economic data shows that it has continued to remain strong as inflation dipped to pre-pandemic lows.
“Agriculture growth was muted at the start of FY26, against market expectations. However, a jubilant monsoon and ample sowing bode well moving forward,” an SBI Cap report said last month.
