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FMCG

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Muhammad S
Muhammad S

This document provides an overview of the fast-moving consumer goods (FMCG) industry. It discusses what FMCG products are, major global and Indian FMCG companies, the Indian FMCG market size and growth, distribution channels, the typical stages of an FMCG product, and a SWOT analysis of the FMCG industry. It also includes graphs on Indian FMCG market size and segmentation, as well as the top 10 Indian towns for FMCG spending.

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Prepared by : Muhammad Saeed Shahbhaiwala
Introduction The Facts about the FMCG Industry FMCG Chart Distribution channels of FMCG The Four stages of a typical FMCG Major FMCG players across the globe Top 10 brands in the FMCG sector Indian FMCG industry at a glance Graphical presentation of Indian FMCG Indian FMCG giants in 2013 Top 10 towns with highest FMCG spending SWOT Analysis
 FMCG, otherwise known as CPG (consumer packaged goods sector), is one of the biggest industries in the world.  Fast-Moving Consumer Goods refers to consumer non-durable goods required for daily or frequent use.  Fast Moving Consumer Goods are products that are sold quickly & at low cost like soft drinks, tooth paste, soaps, shampoos, detergents, shaving products, chocolates, Over-the-counter drugs, toys, processed foods, household accessories and many other consumables.  FMCG companies have a huge market to target. But, often companies face different challenges in different countries to capture true market value.  The success of an FMCG depends greatly on its marketing strategy.  FMCG have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly.  FMCG is probably the most classic case of low margin and high volume business.  FMCG companies have intense distribution network. Companies spend a large portion of their budget on maintaining distribution networks.
FMCG companies are behind the biggest brands in the world. FMCG is all about names, the products which everyone recognises from trips to the supermarket or from ads on television etc. The brands that make up this sector are the high profile ones, the ones everybody knows and loves. Think Coca-Cola, Dettol and Dove. The FMCG industry changes fast and is constantly evolving. From the pace at which goods leave the shelves to the rate of product innovation and career progression, things move quickly. And it doesn't end there. The brands themselves are changing just as quickly. FMCG firms thrive on employee and customer retention. Employee investment is a big part of the ethos of the FMCG world. Perhaps it's because we understand the importance of loyalty. Customer loyalty can make or break a brand. FMCG companies encourage the loyalty of their employees. FMCG companies can beat the recession. FMCG industry has proved itself very resilient to recession. Why? Consumers will always need to buy the products created by FMCG companies. They may not buy big items like refrigerators etc. in recession, but floors still need to be cleaned, clothes need to be laundered and pains still need to be soothed. The FMCG industry thinks bigger and better. This is an industry that offers things on a whole new scale. FMCG firms are always thinking of the next great discovery or innovation – always developing and ever-changing to meet consumer's needs.
FMCG Household Care Household Care: fabric wash (laundry soaps and synthetic detergents); Household cleaners: (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellants, metal polish and furniture polish) Personal Care Oral care; hair care; skin care; personal wash (soaps); cosmetics and toiletries; deodorants; perfumes; paper products; shoe care. Food & Beverages Health beverages; soft drinks; staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates; ice cream; tea; coffee; processed fruits, vegetables and meat; dairy products; bottled water; branded flour; branded rice; branded sugar; juices etc.
FMCG
I. Introduction into the market: When the product enters the market for the first time. The demand for the product needs to be increased; this is usually done, by giving the customer some samples so that they can try before they purchase the product. This stage helps the company to identify potential issues the product might have, from the consumer’s point of view. II. Growth Stage: After the product is introduced into the marker the sales increase, people start to buy the product when required, the public is aware of the products features and benefits at this stage. III. Maturation stage: Production costs usually reduce at this point as the product would have sold several times during the growth stage. Price of the product usually drops down and the sales peek at this time. During this stage competitors introduce their own products, which have, are off similar characteristics. IV. Decline Stage: Sales would have dropped down significantly, price of the product increases and consumers tend to buy other products. Getting profits becomes very hard at this stage. The product is then stopped when it reaches this stage
Name Based Market Value (Billion $) Nestle Switzerland 233.50 Procter & Gamble America 208.50 Coca-Cola America 173.10 Anheuser-Busch InBev Belgium 153.50 Philips Morris International America 150.60 Unilever Anglo-Dutch 122.30 PepsiCo America 118.90 British American Tobacco America 102.00 Reckitt Benckiser British 51.20 General Mills America 29.90
Brand Brand Value ($ m) Products Gillette 24,898.00 Safety razors and other personal care products Kellogg’s 12,068.00 Cereals and convenience foods, including cookies, cereal bars and frozen waffles Pampers 11,296.00 Baby care products L’Oreal 8,821.00 Hair care & color, skin care, sun protection, make-up, perfumes Heinz 7,722.00 Food products Colgate 7,643.00 Health care and personal products such as toothpastes, toothbrushes, soaps and detergents DANONE 7,498.00 Dairy products and water brands Nestle 6,916.00 Baby food, bottled water, breakfast cereals, coffee, confectionery, dairy products, ice cream, pet foods and snacks Avon 5,151.00 Beauty, household and personal care products Johnson & Johnson 4,378.00 Band-Aid, Tylenol medications, Johnson's baby products, Neutrogena skin and beauty products, Clean & Clear facial wash and Acuvue contact lenses
The fast moving consumer goods (FMCG) segment is the fourth largest sector in the Indian economy. The FMCG sector in India has market size in excess of US$ 13.1 billion as of the year 2012. The market size of FMCG in India is expected to grow from US$ 30 billion in 2011 to US$ 74 billion in 2018. The FMCG sector in India generated revenues worth US$ 34.8 billion in 2011, a growth of 15.2 per cent as compared to the previous year. Over 2006-11, the sector's revenues posted a compound annual growth rate (CAGR) of 17.3 per cent. A total of 7.8 million retail outlets sell FMCG in India. India is becoming one of the most attractive markets for foreign FMCG players due to easy availability of imported raw materials and cheaper labour costs. The growth of FMCG is due to liberalization, urbanization, increase in the disposable incomes and altered lifestyle. The industry has witnessed healthy foreign direct investment (FDI) inflow, as the sector accounted for 3 per cent of the country’s total FDI inflow in the period April 2000 to October 2013. Organised retail share is expected to double to 14–18 per cent of the overall retail market by 2015.
7.3 7.3 6.3 5.2 4.7 4.2 3.8 3.5 3.2 FY 12 FY 11 FY 10 FY 09 FY 08 FY 07 FY 06 FY 05 FY 04 Market Size in Billion $ Market Breakup Food products Personal Care Fabric Care Hair Care Households OTC products Baby Care Others Market Segment Rural Urban 470 490 500 540 585 710 860 1020 1160 1300 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 Historical growth of FMCG
256,769 127,144 49,768 28,107 27,261 23,435 18,329 13,137 10,788 9,555 0 50,000 100,000 150,000 200,000 250,000 300,000
Top 10 Towns with highest spending on FMCG products I. Chandigarh II. Greater Mumbai III. Chennai IV. Ahmedabad V. Vadodara VI. Pune VII. Coimbatore VIII. Ludhiana IX. Faridabad X. Hyderabad (Updated on 2nd June 2014)
Strengths Strong brand recognition Variety of choices Excellent R & D facilities Unmatched distribution network Low operational cost Strategic places (outlet) Full of rich experience Good & accessible transport network Threats Intense competition amongst FMCG companies Fluctuations in foreign currency Government policies Increasing cost of raw materials Change in technology Impact of financial slow down Weakness Low customer loyalty Limited presence in some countries High attrition rate Declining export level High advertising cost which may affect the margins Mimic brands Poor customer service Opportunities Large domestic markets Large untapped market available, especially the rural areas Changing lifestyles & rising income Increase awareness through social media Value added services Huge competitive market for the clients
1. http://en.wikipedia.org/wiki/Fast-moving_consumer_goods 2. http://www.ibef.org 3. http://www.slideshare.net 4. http://10bestinworld.blogspot.in 5. http://www.docstoc.com 6. http://www.scribd.com 7. http://www.aaramshoppro.com 8. http://www.freeusandworldmaps.com 9. http://www.mapsofindia.com 10. http://www.about-fmcg.com 11. http://www.strategyand.pwc.com
Business Analyst Product & Brand Management Product Development Marketing Retailing Core Sale Packaging Advertising ManufacturingSupply Logistic Operations Distribution Production Brands Product Consumers Digital Media Super Markets Hyper Markets Outlets Technology Innovation Environment Demand FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG Private Label Consumer Behaviour FMCG FMCG

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FMCG

  • 1. Prepared by : Muhammad Saeed Shahbhaiwala
  • 2. Introduction The Facts about the FMCG Industry FMCG Chart Distribution channels of FMCG The Four stages of a typical FMCG Major FMCG players across the globe Top 10 brands in the FMCG sector Indian FMCG industry at a glance Graphical presentation of Indian FMCG Indian FMCG giants in 2013 Top 10 towns with highest FMCG spending SWOT Analysis
  • 3.  FMCG, otherwise known as CPG (consumer packaged goods sector), is one of the biggest industries in the world.  Fast-Moving Consumer Goods refers to consumer non-durable goods required for daily or frequent use.  Fast Moving Consumer Goods are products that are sold quickly & at low cost like soft drinks, tooth paste, soaps, shampoos, detergents, shaving products, chocolates, Over-the-counter drugs, toys, processed foods, household accessories and many other consumables.  FMCG companies have a huge market to target. But, often companies face different challenges in different countries to capture true market value.  The success of an FMCG depends greatly on its marketing strategy.  FMCG have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly.  FMCG is probably the most classic case of low margin and high volume business.  FMCG companies have intense distribution network. Companies spend a large portion of their budget on maintaining distribution networks.
  • 4. FMCG companies are behind the biggest brands in the world. FMCG is all about names, the products which everyone recognises from trips to the supermarket or from ads on television etc. The brands that make up this sector are the high profile ones, the ones everybody knows and loves. Think Coca-Cola, Dettol and Dove. The FMCG industry changes fast and is constantly evolving. From the pace at which goods leave the shelves to the rate of product innovation and career progression, things move quickly. And it doesn't end there. The brands themselves are changing just as quickly. FMCG firms thrive on employee and customer retention. Employee investment is a big part of the ethos of the FMCG world. Perhaps it's because we understand the importance of loyalty. Customer loyalty can make or break a brand. FMCG companies encourage the loyalty of their employees. FMCG companies can beat the recession. FMCG industry has proved itself very resilient to recession. Why? Consumers will always need to buy the products created by FMCG companies. They may not buy big items like refrigerators etc. in recession, but floors still need to be cleaned, clothes need to be laundered and pains still need to be soothed. The FMCG industry thinks bigger and better. This is an industry that offers things on a whole new scale. FMCG firms are always thinking of the next great discovery or innovation – always developing and ever-changing to meet consumer's needs.
  • 5. FMCG Household Care Household Care: fabric wash (laundry soaps and synthetic detergents); Household cleaners: (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellants, metal polish and furniture polish) Personal Care Oral care; hair care; skin care; personal wash (soaps); cosmetics and toiletries; deodorants; perfumes; paper products; shoe care. Food & Beverages Health beverages; soft drinks; staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates; ice cream; tea; coffee; processed fruits, vegetables and meat; dairy products; bottled water; branded flour; branded rice; branded sugar; juices etc.
  • 7. I. Introduction into the market: When the product enters the market for the first time. The demand for the product needs to be increased; this is usually done, by giving the customer some samples so that they can try before they purchase the product. This stage helps the company to identify potential issues the product might have, from the consumer’s point of view. II. Growth Stage: After the product is introduced into the marker the sales increase, people start to buy the product when required, the public is aware of the products features and benefits at this stage. III. Maturation stage: Production costs usually reduce at this point as the product would have sold several times during the growth stage. Price of the product usually drops down and the sales peek at this time. During this stage competitors introduce their own products, which have, are off similar characteristics. IV. Decline Stage: Sales would have dropped down significantly, price of the product increases and consumers tend to buy other products. Getting profits becomes very hard at this stage. The product is then stopped when it reaches this stage
  • 8. Name Based Market Value (Billion $) Nestle Switzerland 233.50 Procter & Gamble America 208.50 Coca-Cola America 173.10 Anheuser-Busch InBev Belgium 153.50 Philips Morris International America 150.60 Unilever Anglo-Dutch 122.30 PepsiCo America 118.90 British American Tobacco America 102.00 Reckitt Benckiser British 51.20 General Mills America 29.90
  • 9. Brand Brand Value ($ m) Products Gillette 24,898.00 Safety razors and other personal care products Kellogg’s 12,068.00 Cereals and convenience foods, including cookies, cereal bars and frozen waffles Pampers 11,296.00 Baby care products L’Oreal 8,821.00 Hair care & color, skin care, sun protection, make-up, perfumes Heinz 7,722.00 Food products Colgate 7,643.00 Health care and personal products such as toothpastes, toothbrushes, soaps and detergents DANONE 7,498.00 Dairy products and water brands Nestle 6,916.00 Baby food, bottled water, breakfast cereals, coffee, confectionery, dairy products, ice cream, pet foods and snacks Avon 5,151.00 Beauty, household and personal care products Johnson & Johnson 4,378.00 Band-Aid, Tylenol medications, Johnson's baby products, Neutrogena skin and beauty products, Clean & Clear facial wash and Acuvue contact lenses
  • 10. The fast moving consumer goods (FMCG) segment is the fourth largest sector in the Indian economy. The FMCG sector in India has market size in excess of US$ 13.1 billion as of the year 2012. The market size of FMCG in India is expected to grow from US$ 30 billion in 2011 to US$ 74 billion in 2018. The FMCG sector in India generated revenues worth US$ 34.8 billion in 2011, a growth of 15.2 per cent as compared to the previous year. Over 2006-11, the sector's revenues posted a compound annual growth rate (CAGR) of 17.3 per cent. A total of 7.8 million retail outlets sell FMCG in India. India is becoming one of the most attractive markets for foreign FMCG players due to easy availability of imported raw materials and cheaper labour costs. The growth of FMCG is due to liberalization, urbanization, increase in the disposable incomes and altered lifestyle. The industry has witnessed healthy foreign direct investment (FDI) inflow, as the sector accounted for 3 per cent of the country’s total FDI inflow in the period April 2000 to October 2013. Organised retail share is expected to double to 14–18 per cent of the overall retail market by 2015.
  • 11. 7.3 7.3 6.3 5.2 4.7 4.2 3.8 3.5 3.2 FY 12 FY 11 FY 10 FY 09 FY 08 FY 07 FY 06 FY 05 FY 04 Market Size in Billion $ Market Breakup Food products Personal Care Fabric Care Hair Care Households OTC products Baby Care Others Market Segment Rural Urban 470 490 500 540 585 710 860 1020 1160 1300 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 Historical growth of FMCG
  • 12. 256,769 127,144 49,768 28,107 27,261 23,435 18,329 13,137 10,788 9,555 0 50,000 100,000 150,000 200,000 250,000 300,000
  • 13. Top 10 Towns with highest spending on FMCG products I. Chandigarh II. Greater Mumbai III. Chennai IV. Ahmedabad V. Vadodara VI. Pune VII. Coimbatore VIII. Ludhiana IX. Faridabad X. Hyderabad (Updated on 2nd June 2014)
  • 14. Strengths Strong brand recognition Variety of choices Excellent R & D facilities Unmatched distribution network Low operational cost Strategic places (outlet) Full of rich experience Good & accessible transport network Threats Intense competition amongst FMCG companies Fluctuations in foreign currency Government policies Increasing cost of raw materials Change in technology Impact of financial slow down Weakness Low customer loyalty Limited presence in some countries High attrition rate Declining export level High advertising cost which may affect the margins Mimic brands Poor customer service Opportunities Large domestic markets Large untapped market available, especially the rural areas Changing lifestyles & rising income Increase awareness through social media Value added services Huge competitive market for the clients
  • 15. 1. http://en.wikipedia.org/wiki/Fast-moving_consumer_goods 2. http://www.ibef.org 3. http://www.slideshare.net 4. http://10bestinworld.blogspot.in 5. http://www.docstoc.com 6. http://www.scribd.com 7. http://www.aaramshoppro.com 8. http://www.freeusandworldmaps.com 9. http://www.mapsofindia.com 10. http://www.about-fmcg.com 11. http://www.strategyand.pwc.com
  • 16. Business Analyst Product & Brand Management Product Development Marketing Retailing Core Sale Packaging Advertising ManufacturingSupply Logistic Operations Distribution Production Brands Product Consumers Digital Media Super Markets Hyper Markets Outlets Technology Innovation Environment Demand FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG FMCG Private Label Consumer Behaviour FMCG FMCG