The FMCG industry in India is the 4th largest sector in the economy. It has three main segments - food and beverages (19%), healthcare (31%), and household and personal care (50%). The industry has grown rapidly in recent years due to growing awareness, easier access, and changing lifestyles, especially in rural India. Revenues of the FMCG sector reached Rs 3.4 lakh crore (US$ 52.75 billion) in FY18 and are estimated to reach US$ 103.7 billion in 2020. Major players like ITC, Hindustan Foods, and Patanjali have expanded significantly through new product launches and investments in recent years.

1. FMCG INDUSTRY IN INDIA

2. Fast moving consumer goods (FMCG) are the 4th largest sector in the Indian economy.
There are three main segments in the sector – food and beverages which accounts for
19 per cent of the sector, healthcare which accounts for 31 per cent and household
and personal care which accounts for the remaining 50 per cent.

3. Introduction
Fast-moving consumer goods (FMCG) sector is the 4th largest sector in the Indian
economy with Household and Personal Care accounting for 50 per cent of FMCG
sales in India. Growing awareness, easier access and changing lifestyles have been
the key growth drivers for the sector. The urban segment (accounts for a revenue
share of around 55 per cent) is the largest contributor to the overall revenue
generated by the FMCG sector in India However, in the last few years, the FMCG
market has grown at a faster pace in rural India compared with urban India. Semi-
urban and rural segments are growing at a rapid pace and FMCG products account
for 50 per cent of total rural spending.
Market Size
The Retail market in India is estimated to reach US$ 1.1 trillion by 2020 from US$
840 billion in 2017, with modern trade expected to grow at 20 per cent - 25 per
cent per annum, which is likely to boost revenues of FMCG companies. Revenues
of FMCG sector reached Rs 3.4 lakh crore (US$ 52.75 billion) in FY18 and are
estimated to reach US$ 103.7 billion in 2020.

4. Developments
Some of the recent developments in the FMCG sector are as follows:
In FY2019, ITC made more than 60 launches in the Fast Moving Consumer Goods
(FMCG) segment in India.
In February 2019 India’s leading FMCG Contract Manufacturer Hindustan Foods
Limited received investment of US$ 22 million from Convergent Finance LLP.
Patanjali will spend US$743.72 million in various food parks in Maharashtra,
Madhya Pradesh, Assam, Andhra Pradesh and Uttar Pradesh.
Dabur is planning to invest Rs 250-300 crore (US$ 38.79-46.55 million) in FY19
for capacity expansion and is also planning to make acquisitions in the domestic
market.
In May 2018, RP-Sanjiv Goenka Group created an Rs 1 billion (US$ 14.92 million)
venture capital fund to invest in FMCG start-ups.
In August 2018, Fonterra announced a joint venture with Future Consumer Ltd
which will produce a range of consumer and foodservice dairy products.

5. Achievements
Following are the achievements of the government in the past four years:
Number of mega food parks ready increased from 2 between 2008-14 to 13
between 2014- 18.
Preservation and processing capacity increased from 308,000 during 2008-14 to
1.41 million during 2014-18.
The number of food labs increased from 31 during 2008-14 to 42 during 2014-
18.
Road Ahead
On the other hand, with the share of unorganised market in the FMCG sector
falling, the organised sector growth is expected to rise with increased level of
brand consciousness, also augmented by the growth in modern retail.
Another major factor propelling the demand for food services in India is the
growing youth population, primarily in the country’s urban regions. India has a
large base of young consumers who form the majority of the workforce and,
due to time constraints, barely get time for cooking.