Two ways to grow, one number on the page

An FMCG (fast-moving consumer goods) company — soaps, oils, biscuits, tea — can grow revenue in two ways. It can sell more units, or it can get more per unit, by raising prices or by selling more of its expensive products (a change in mix). The income statement shows only the total.

The two kinds of growth behave very differently. Volume growth means more households buying, more often — it usually builds on itself. Price growth often just passes on a rise in raw-material costs, and it can reverse when those costs fall. That’s why FMCG companies report volume growth separately, and why the sector lens starts by splitting revenue growth in two.

Most report underlying volume growth (UVG): volume adjusted by the company for things that would distort it — acquisitions, one-offs, or a change in pack size. The adjustment is the company’s own, so the definition matters.

The formula

Revenue growth  ≈  (1 + volume growth) × (1 + price-and-mix growth) − 1

so

Implied price-and-mix growth  =  (1 + revenue growth) / (1 + volume growth) − 1

For small numbers you can nearly add them (8% volume and 5% price ≈ 13% revenue), but multiply when the numbers get large.

Worked example: Marico, quarter and year to March 2026

All figures from Marico’s Information Update for Q4 FY26, filed with the stock exchanges on 5 May 2026. Growth rates are as printed, rounded to whole percentages by the company. Historical, for illustration only. Marico sells hair oils (Parachute), edible oils (Saffola), foods and personal care in India and abroad.

Step 1: the India business, one quarter

The March 2026 quarter’s India business — about 75% of revenue that quarter:

Q4 FY26 vs Q4 FY25
India revenue growth 21%
Underlying volume growth (India) 9%
Implied price-and-mix growth 11%
  1. Revenue grew 21%, but volume only 9%. Using the formula: 1.21 ÷ 1.09 − 1 ≈ 11%.
  2. So roughly half of the rupee growth came from getting more per unit, not from selling more units. Both are real revenue — they just have different causes and different staying power.

The implied figure is a rough split, not a disclosed one: it treats UVG as the volume of the whole India business and lumps price and mix together.

Step 2: one brand, where the gap is extreme

Parachute Rigids (coconut oil in rigid packs), same quarter:

Q4 FY26 vs Q4 FY25
Reported volume growth −1%
Revenue growth 29%
Implied revenue per unit +30.3%
  1. Volume fell slightly; revenue rose 29%. Almost all the growth was price (and mix). The backdrop, in the update: copra (dried coconut, the raw material) had been expensive — it describes “significant input cost pressures” through the year. It also says copra prices have since fallen about 35% from their peak, and that the brand has taken “selective pricing actions to pass on value to consumers”. When prices come down, the price part of growth works in reverse.
  2. The update adds that the underlying volume, after adjusting for “ml-age reductions” — less oil per pack — grew in low single digits. Shrinking the pack changes the measured volume: if the same number of packs is sold but each holds less oil, volume in litres falls. When the price per pack stays put, a smaller pack is also a price increase per millilitre.

Step 3: what price-led growth did to margins

FY26 Change vs FY25
Revenue from operations, ₹ crore 13,611 +26%
EBITDA, ₹ crore 2,328 +9%
EBITDA margin 17.1% −265 basis points
  1. Revenue grew 26% but EBITDA (earnings before interest, tax, depreciation and amortisation) only 9%, so the EBITDA margin fell from about 19.8% to 17.1%.
  2. In the March quarter, gross margin was down about 360 basis points year on year (a basis point is 0.01 percentage point). Price increases can protect the rupee profit per pack without protecting the percentage: if an input doubles and you raise the price just enough to keep the same rupee profit per pack, your margin percentage still falls, because the same profit now sits on a bigger price.

That’s a common pattern in a raw-material-heavy consumer company during a commodity spike: revenue up sharply, volume modest, margin down. When the commodity falls, the mirror image is possible — prices cut, revenue growth slower, margin recovering — though it isn’t guaranteed. Neither is a verdict on the company — it’s how a raw-material-heavy business passes costs through.

🧒 Explain it like I'm 10 (optional — skip if this is already clear)

Your favourite chocolate bar cost ₹10 last year. This year it costs ₹12. The shop sold 100 bars both years.

The shop’s chocolate money went from ₹1,000 to ₹1,200 — up 20%! But it didn’t sell one extra bar. That’s price growth.

Now imagine the company keeps the price at ₹10 but quietly makes the bar a bit smaller. The shop still sells 100 bars for ₹1,000, but the company is selling less chocolate. That’s the “smaller pack” trick, and it’s why companies say what they mean by volume.

Common mistakes

  • Reading revenue growth as demand. A 26% revenue year with 8% India volume growth (and a separate international business growing in its own currencies) is not “26% more product sold”. Find the volume number first.
  • Extrapolating price-led growth. Price increases that pass on a commodity spike tend to be reversed when the commodity falls, as the Parachute example shows. Volume growth is the part that tends to persist.
  • Missing pack-size changes. Smaller packs at the same price raise the price per gram and lower reported volume. Companies that adjust for this call the result “underlying” volume — check what’s been adjusted.
  • Comparing volume growth across companies as if it were one measure. One company counts tonnes, another packs, a third an index it builds itself; some exclude acquisitions, some don’t. Compare a company with its own history first.

Takeaway: For a consumer company, split revenue growth into volume and price before believing it. Volume tells you whether more people are buying more; price often just passes on raw-material costs and can reverse when those costs fall.