Fast Moving Consumer Goods (FMCG) Summit - Issues and Opportunities
Fast moving consumer goods (FMCG) is the fourth largest sector in the Indian economy and creates employment for more than three million people in downstream activities.
Indian market is becoming the ‘mother of all markets’ which is rapidly increasing demand for all classes of product.
The document discusses the fast moving consumer goods (FMCG) industry in India. It analyzes the industry using Porter's Five Forces model. The FMCG industry is characterized by high volume and low cost products with short shelf lives that are sold through extensive distribution networks. The industry faces high rivalry among existing players who compete on price, promotions, distribution, and new products. Potential entrants face barriers like requirements for strong distribution networks and brands. Buyers have low bargaining power due to many alternatives. Suppliers also have low bargaining power. Substitutes pose varying levels of threat depending on utility and switching costs.
The FMCG sector in India grew rapidly in the 1980s and 1990s but then lost momentum due to a lack of innovation by companies and the introduction of new product types. However, consumer willingness to upgrade to better products helped revive the FMCG sector in the 2010s. The FMCG sector is the 4th largest in India and includes household care, personal care, and food and beverage products. Hindustan Unilever Ltd., Procter & Gamble, and ITC are the top three FMCG companies in India. The sector has significant growth opportunities due to India's large population and vast rural markets.
The document discusses the Indian FMCG sector, noting that it is the fourth largest sector in the Indian economy, generating over $50 billion in revenues by 2017. It provides an overview of key FMCG companies like Hindustan Unilever, ITC, and Nestle, as well as market segments like household and personal care which account for 50% of the market. The growth of the FMCG sector is expected to continue, driven by increasing incomes, awareness, and changing lifestyles in India.
This document provides an overview of the FMCG sector in India including a SWOT analysis. It begins with definitions of FMCG and describes key segments. India has a large FMCG market, expected to reach $33.4 billion by 2015. The top strengths are low costs, established distribution networks, and strong brands. Weaknesses include lower technology investment and counterfeiting. Opportunities include the large untapped rural market and rising incomes. Threats include increased competition and high taxes. The document proposes strategies like expansion, improved distribution, innovation, and addressing issues in tax policy.
Hindustan Unilever (HUL) is the largest FMCG company in India, followed by Nestle India, ITC, and Dabur. Over the past 3-5 years, HUL has grown through expanding its large distribution network. Nestle India's growth slowed to 8% annually while ITC and Dabur grew around 25-30% through expanding into international markets and new product segments. The top FMCG companies have a presence across multiple segments like food, beverages, personal care, home care, and healthcare. HUL maintains a leading market share across segments while shares of Nestle, ITC and Dabur have been increasing in recent years through innovations and acquisitions.
The document discusses the fast moving consumer goods (FMCG) sector in India. It notes that major players in India include Hindustan Unilever Ltd., ITC, Nestle India, and others. Historically, these companies faced less competition and were able to charge premium prices. However, with economic liberalization over the last decade, the FMCG market has become more competitive. The document provides an overview of the market size and growth of various FMCG sub-sectors in India like personal care, food and beverages. It also discusses the strengths, weaknesses, opportunities and threats facing the Indian FMCG industry.
The Indian FMCG sector has a market size of US$25 billion and is poised to grow 10-12% annually. It has a well-established distribution network of over 6 million retail outlets across urban and rural areas. Organized retail is growing and expected to increase its share of the market to 14-18% by 2015. Rural India accounts for one-third of total consumption and FMCG companies are devising rural marketing strategies. Food products are the largest consumption category. The export potential for Indian FMCG companies is growing as they focus on international markets.
The document discusses India's fast moving consumer goods (FMCG) sector. It notes that the FMCG sector contributes around 3% to India's GDP and provides 3 million jobs. The market is over Rs. 85,000 crores and includes household care, personal care, and food and beverages. It also profiles the top 3 FMCG companies in India - Hindustan Unilever Ltd., ITC Ltd., and Dabur India Ltd. The FMCG sector is expected to maintain robust growth, reaching a size of Rs. 620,000 crores by 2020. Rural India represents a major untapped market potential as rural consumers account for around 55% of total FMCG sales.
The document discusses the fast moving consumer goods (FMCG) industry in India. It analyzes the industry using Porter's Five Forces model. The FMCG industry is characterized by high volume and low cost products with short shelf lives that are sold through extensive distribution networks. The industry faces high rivalry among existing players who compete on price, promotions, distribution, and new products. Potential entrants face barriers like requirements for strong distribution networks and brands. Buyers have low bargaining power due to many alternatives. Suppliers also have low bargaining power. Substitutes pose varying levels of threat depending on utility and switching costs.
The FMCG sector in India grew rapidly in the 1980s and 1990s but then lost momentum due to a lack of innovation by companies and the introduction of new product types. However, consumer willingness to upgrade to better products helped revive the FMCG sector in the 2010s. The FMCG sector is the 4th largest in India and includes household care, personal care, and food and beverage products. Hindustan Unilever Ltd., Procter & Gamble, and ITC are the top three FMCG companies in India. The sector has significant growth opportunities due to India's large population and vast rural markets.
The document discusses the Indian FMCG sector, noting that it is the fourth largest sector in the Indian economy, generating over $50 billion in revenues by 2017. It provides an overview of key FMCG companies like Hindustan Unilever, ITC, and Nestle, as well as market segments like household and personal care which account for 50% of the market. The growth of the FMCG sector is expected to continue, driven by increasing incomes, awareness, and changing lifestyles in India.
This document provides an overview of the FMCG sector in India including a SWOT analysis. It begins with definitions of FMCG and describes key segments. India has a large FMCG market, expected to reach $33.4 billion by 2015. The top strengths are low costs, established distribution networks, and strong brands. Weaknesses include lower technology investment and counterfeiting. Opportunities include the large untapped rural market and rising incomes. Threats include increased competition and high taxes. The document proposes strategies like expansion, improved distribution, innovation, and addressing issues in tax policy.
Hindustan Unilever (HUL) is the largest FMCG company in India, followed by Nestle India, ITC, and Dabur. Over the past 3-5 years, HUL has grown through expanding its large distribution network. Nestle India's growth slowed to 8% annually while ITC and Dabur grew around 25-30% through expanding into international markets and new product segments. The top FMCG companies have a presence across multiple segments like food, beverages, personal care, home care, and healthcare. HUL maintains a leading market share across segments while shares of Nestle, ITC and Dabur have been increasing in recent years through innovations and acquisitions.
The document discusses the fast moving consumer goods (FMCG) sector in India. It notes that major players in India include Hindustan Unilever Ltd., ITC, Nestle India, and others. Historically, these companies faced less competition and were able to charge premium prices. However, with economic liberalization over the last decade, the FMCG market has become more competitive. The document provides an overview of the market size and growth of various FMCG sub-sectors in India like personal care, food and beverages. It also discusses the strengths, weaknesses, opportunities and threats facing the Indian FMCG industry.
The Indian FMCG sector has a market size of US$25 billion and is poised to grow 10-12% annually. It has a well-established distribution network of over 6 million retail outlets across urban and rural areas. Organized retail is growing and expected to increase its share of the market to 14-18% by 2015. Rural India accounts for one-third of total consumption and FMCG companies are devising rural marketing strategies. Food products are the largest consumption category. The export potential for Indian FMCG companies is growing as they focus on international markets.
The document discusses India's fast moving consumer goods (FMCG) sector. It notes that the FMCG sector contributes around 3% to India's GDP and provides 3 million jobs. The market is over Rs. 85,000 crores and includes household care, personal care, and food and beverages. It also profiles the top 3 FMCG companies in India - Hindustan Unilever Ltd., ITC Ltd., and Dabur India Ltd. The FMCG sector is expected to maintain robust growth, reaching a size of Rs. 620,000 crores by 2020. Rural India represents a major untapped market potential as rural consumers account for around 55% of total FMCG sales.
The document provides an overview of the fast moving consumer goods (FMCG) sector in India. Some key points:
- The FMCG market in India is expected to grow at a CAGR of 27.86% to reach US$103.70 billion by 2020 from US$52.75 billion in FY2018.
- Final consumption expenditure is set to increase at a CAGR of 25.44% from 2017-2021 to reach nearly US$3.6 trillion by 2020 from US$1.82 trillion in 2017.
- The rural FMCG market in India is expected to grow to US$220 billion by 2025 from US$23.63 billion in FY2018
The Fast Moving Consumer Goods (FMCG) sector in India is the fourth largest sector in the Indian economy, with a market size estimated to grow from $30 billion in 2011 to $74 billion by 2018. Food and beverage products make up the largest segment at 43% of the market. Key trends in the FMCG sector include growing rural contributions, rising advertisement spending, and increasing online sales. Major opportunities for growth include tapping the large untapped rural market and rising consumer spending. However, the industry faces challenges such as intense competition, increasing counterfeiting, and managing supply chain constraints.
The fast moving consumer goods (FMCG) sector is an important contributor to India's GDP and economy. It includes frequent use household items like soaps, detergents, food items, and some electronics. The Indian FMCG sector has a market size of 2 trillion rupees, with rural India contributing one third. It is highly fragmented and competitive. Major segments include household care like detergents, personal care like soaps and hair care, and food and beverages like packaged snacks and drinks. A PESTEL analysis found political support, economic and income growth, changing social and lifestyle factors, advancing technology, and environmental regulations influence the sector. Porter's five forces model found barriers to entry are modest due to investments
This document provides an overview of the fast moving consumer goods (FMCG) sector in India. It discusses that FMCG includes personal care, home care, food and beverages, and spirits/tobacco. The sector is worth $35 billion and growing 17% annually. Rural income growth has boosted FMCG. Key characteristics of FMCG goods are monthly use, direct consumer use, non-durable, packaged, and branded. Major FMCG companies in India are discussed and statistics on the industry are provided. The document also compares urban and rural FMCG markets and opportunities for growth in India.
This document provides an analysis of Britannia Industries Ltd, a leading Indian food company. It discusses Britannia's origin, products, performance, opportunities, challenges, and strategies. An external analysis using PESTEL and Porter's Five Forces models examines factors impacting the bakery and dairy industries in India. Britannia faces competition but has achieved growth and market share through quality, trust, and innovation. The company aims to further expand its business and capture market opportunities both domestically and abroad.
The document discusses the FMCG sector in India. It notes that MNCs have a strong presence in the Indian FMCG market, with four of the top 10 FMCG companies being multinationals. It also lists the top 15 FMCG companies in India by sales turnover. The document then summarizes the segments and size of the FMCG market in India, and provides background on the company Nirma, including its market share, manufacturing and sales operations, and business overview.
PESTLE Analysis of FMCG retail in IndiaMeher Kalyani
The document discusses a PESTLE analysis of the FMCG (Fast Moving Consumer Goods) retailing industry in India. PESTLE is a framework that analyzes the political, economic, social, technological, legal, and environmental factors affecting a business. The analysis covers how each of these external factors impacts the FMCG retailing industry in India. It provides examples of political influences like taxation policy and subsidies. It also discusses economic growth trends, social factors like demographics, the large impact of emerging technologies, relevant legal factors, and environmental initiatives of major retailers.
Here is the Power-point presentation ppt of Britannia Industries Limited. In this ppt we have described you about Mission statement, Vision Statement, Britannia's products, Britannia's competitors, Britannia's stakeholders, Positive and negative of stakeholders, Primary and secondary stakeholders, which stake holders are important and which are not also which stakeholders influence the most and which not, Britannia's Problem tree, Britannia's objective tree, segmentation, PESTEL analysis, Swot analysis, Tows analysis, 4Ps (i.e. Product, Price, Promotion, Place), Porter's five forces (Analysis), Business Model, BCG Matrix (Growth Share matrix), Consumer/Customer Perception, Strategic Recommendations/Suggestions.
Indian FMCG Industry Presentation
Introduction & Market overview
Features of FMCG industry
Policies and Regulatory Framework
Market Drivers
Market Strategies
Market Challenges
Major FMCG companies in India
Major trends
The document discusses the Fast Moving Consumer Goods (FMCG) sector in India. It notes that FMCG includes household care, personal care, food and beverages products that have quick turnover. The Indian FMCG sector is the 4th largest in the world and is growing rapidly, expected to reach $74 billion by 2018. Major players like HUL and ITC have large market shares. The future of the FMCG sector in India looks promising with rising incomes and large domestic market, but risks include regulatory changes and rural demand seasonality.
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods (FMCG) company. It has a strong presence across India in both urban and rural areas. HUL faces competition from other domestic and multinational FMCG firms. However, it maintains an advantage through its large scale of operations, extensive distribution network, and portfolio of popular brands that serve a wide range of price points. The company continues to focus on innovation and adapting its products to evolving consumer demands in India.
The document provides an overview of the fast moving consumer goods (FMCG) industry in India. It discusses that FMCG includes daily necessity items like toiletries, detergents, soaps that are consumed rapidly. The Indian FMCG market is the 4th largest sector in the economy worth over $13 billion annually and growing 10-12% per year. Major FMCG companies have a widespread distribution network across India reaching urban and rural markets. The future of the FMCG sector in India looks promising with rising incomes, changing lifestyles, and projections that it will become a $99-135 billion industry by 2020.
This document provides an overview of the FMCG sector in India. It notes that the FMCG sector accounts for around 3% of India's GDP and includes food and beverages, household care, and personal care products. The top FMCG companies in India are Hindustan Unilever, Patanjali, ITC, Nestle, and others. The FMCG sector is growing at a rate of 11.9% annually and urban areas account for 60% of revenues currently, though rural markets are growing rapidly as well. The industry faces high competition and potential substitutes but opportunities for growth include expanding in rural markets, developing innovative products, and increasing product penetration across India.
Final project on Britannia company and competitor Raman Bang
sector information, sector analysis, company profile, company portfolio, porter five force model, swot analysis, Competitor analysis, Marketing mix, Analysis of net profit,revenue,debt-equity, Finance ratio, Organisation hierarchy,, Job description Job analysis, marketing product life cycle,
Full report of company on the basis of 3 profile Marketing, finance, Human resource management.
Factors affecting Demand and supply of FMCG sectorNitya Tailang
This document summarizes factors that affect the demand and supply of products in India's fast-moving consumer goods (FMCG) industry. It outlines that FMCG includes household care, personal care, health care, and food and beverages. The main factors affecting demand are price, tastes, population growth/income, demography, inflation, and government policies. The main factors affecting supply are price, natural conditions, production costs, technology, competition, and government policies. The document also outlines opportunities for growth in rural markets, e-commerce, and increasing disposable income, as well as projections that India will contribute more to global FMCG consumption in the future.
The document provides information about the FMCG sector in India. It discusses that the FMCG sector accounts for 50% of the overall market and includes products like oral care, hair care, skin care, etc. It also mentions that the food and beverages segment accounts for 31% of the sector and includes products like snacks, beverages and dairy. Finally, it provides a detailed overview of Haldiram, one of the major players in the Indian snacks market, including its history, product portfolio, marketing strategies and SWOT analysis.
Hindustan Unilever Limited (HUL) is India's largest consumer goods company based in Mumbai. It is a majority owned subsidiary of British-Dutch company Unilever. Formed in 1933 as Lever Brothers India Limited, it was renamed in 2007 as HUL. HUL's product portfolio includes foods, beverages, cleaning agents and personal care products which it distributes to over 2 million retail outlets across India. When analyzing HUL's product portfolio using the BCG matrix, its food brands and home care brands would be considered cash cows due to their large market share in mature industries. Personal care brands would be stars due to their large market share and growth in an expanding market.
Hindustan Unilever Limited (HUL) is the largest fast-moving consumer goods (FMCG) company in India, operating in foods, beverages, cleaning agents, and personal care products. It is majority-owned by British-Dutch company Unilever and headquartered in Mumbai. HUL has over 35 brands spanning 20 categories and, according to market research, two out of three Indians use HUL products.
The document provides an overview of the Indian FMCG sector. Some key points:
- The Indian FMCG sector has a market size of US$25 billion and is poised to grow 10-12% annually. It has a well-established distribution network across 6 million retail outlets.
- Organized retail is growing and expected to increase its share of the market to 14-18% by 2015, creating new channels for FMCG players.
- Rural India accounts for one-third of total consumption and is an important growth area as FMCG companies develop rural marketing strategies.
- Food products are the largest consumption category, accounting for 21% of India's GDP. Leading players in this segment are mentioned.
This document provides information about Cargill Group of Companies, which operates in the fast moving consumer goods (FMCG) industry in India. It discusses Cargill's brands and products, including details about its Paradip production unit in Orissa. The summary discusses Cargill's history and operations in India, and provides an overview of the Indian FMCG industry and Cargill's role within it.
Colgate-Palmolive is a global consumer products company headquartered in New York City. It is the largest seller of toothpaste worldwide and also produces personal care products like shampoos and deodorants as well as household cleaners. The fast moving consumer goods (FMCG) industry in India, which includes segments like cosmetics, packaged food, and home care products, is growing significantly. Within this industry, Colgate-Palmolive faces competition from other major FMCG companies like Procter & Gamble. The document provides an overview of Colgate-Palmolive and the FMCG industry in India.
The document provides an overview of the fast moving consumer goods (FMCG) sector in India. Some key points:
- The FMCG market in India is expected to grow at a CAGR of 27.86% to reach US$103.70 billion by 2020 from US$52.75 billion in FY2018.
- Final consumption expenditure is set to increase at a CAGR of 25.44% from 2017-2021 to reach nearly US$3.6 trillion by 2020 from US$1.82 trillion in 2017.
- The rural FMCG market in India is expected to grow to US$220 billion by 2025 from US$23.63 billion in FY2018
The Fast Moving Consumer Goods (FMCG) sector in India is the fourth largest sector in the Indian economy, with a market size estimated to grow from $30 billion in 2011 to $74 billion by 2018. Food and beverage products make up the largest segment at 43% of the market. Key trends in the FMCG sector include growing rural contributions, rising advertisement spending, and increasing online sales. Major opportunities for growth include tapping the large untapped rural market and rising consumer spending. However, the industry faces challenges such as intense competition, increasing counterfeiting, and managing supply chain constraints.
The fast moving consumer goods (FMCG) sector is an important contributor to India's GDP and economy. It includes frequent use household items like soaps, detergents, food items, and some electronics. The Indian FMCG sector has a market size of 2 trillion rupees, with rural India contributing one third. It is highly fragmented and competitive. Major segments include household care like detergents, personal care like soaps and hair care, and food and beverages like packaged snacks and drinks. A PESTEL analysis found political support, economic and income growth, changing social and lifestyle factors, advancing technology, and environmental regulations influence the sector. Porter's five forces model found barriers to entry are modest due to investments
This document provides an overview of the fast moving consumer goods (FMCG) sector in India. It discusses that FMCG includes personal care, home care, food and beverages, and spirits/tobacco. The sector is worth $35 billion and growing 17% annually. Rural income growth has boosted FMCG. Key characteristics of FMCG goods are monthly use, direct consumer use, non-durable, packaged, and branded. Major FMCG companies in India are discussed and statistics on the industry are provided. The document also compares urban and rural FMCG markets and opportunities for growth in India.
This document provides an analysis of Britannia Industries Ltd, a leading Indian food company. It discusses Britannia's origin, products, performance, opportunities, challenges, and strategies. An external analysis using PESTEL and Porter's Five Forces models examines factors impacting the bakery and dairy industries in India. Britannia faces competition but has achieved growth and market share through quality, trust, and innovation. The company aims to further expand its business and capture market opportunities both domestically and abroad.
The document discusses the FMCG sector in India. It notes that MNCs have a strong presence in the Indian FMCG market, with four of the top 10 FMCG companies being multinationals. It also lists the top 15 FMCG companies in India by sales turnover. The document then summarizes the segments and size of the FMCG market in India, and provides background on the company Nirma, including its market share, manufacturing and sales operations, and business overview.
PESTLE Analysis of FMCG retail in IndiaMeher Kalyani
The document discusses a PESTLE analysis of the FMCG (Fast Moving Consumer Goods) retailing industry in India. PESTLE is a framework that analyzes the political, economic, social, technological, legal, and environmental factors affecting a business. The analysis covers how each of these external factors impacts the FMCG retailing industry in India. It provides examples of political influences like taxation policy and subsidies. It also discusses economic growth trends, social factors like demographics, the large impact of emerging technologies, relevant legal factors, and environmental initiatives of major retailers.
Here is the Power-point presentation ppt of Britannia Industries Limited. In this ppt we have described you about Mission statement, Vision Statement, Britannia's products, Britannia's competitors, Britannia's stakeholders, Positive and negative of stakeholders, Primary and secondary stakeholders, which stake holders are important and which are not also which stakeholders influence the most and which not, Britannia's Problem tree, Britannia's objective tree, segmentation, PESTEL analysis, Swot analysis, Tows analysis, 4Ps (i.e. Product, Price, Promotion, Place), Porter's five forces (Analysis), Business Model, BCG Matrix (Growth Share matrix), Consumer/Customer Perception, Strategic Recommendations/Suggestions.
Indian FMCG Industry Presentation
Introduction & Market overview
Features of FMCG industry
Policies and Regulatory Framework
Market Drivers
Market Strategies
Market Challenges
Major FMCG companies in India
Major trends
The document discusses the Fast Moving Consumer Goods (FMCG) sector in India. It notes that FMCG includes household care, personal care, food and beverages products that have quick turnover. The Indian FMCG sector is the 4th largest in the world and is growing rapidly, expected to reach $74 billion by 2018. Major players like HUL and ITC have large market shares. The future of the FMCG sector in India looks promising with rising incomes and large domestic market, but risks include regulatory changes and rural demand seasonality.
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods (FMCG) company. It has a strong presence across India in both urban and rural areas. HUL faces competition from other domestic and multinational FMCG firms. However, it maintains an advantage through its large scale of operations, extensive distribution network, and portfolio of popular brands that serve a wide range of price points. The company continues to focus on innovation and adapting its products to evolving consumer demands in India.
The document provides an overview of the fast moving consumer goods (FMCG) industry in India. It discusses that FMCG includes daily necessity items like toiletries, detergents, soaps that are consumed rapidly. The Indian FMCG market is the 4th largest sector in the economy worth over $13 billion annually and growing 10-12% per year. Major FMCG companies have a widespread distribution network across India reaching urban and rural markets. The future of the FMCG sector in India looks promising with rising incomes, changing lifestyles, and projections that it will become a $99-135 billion industry by 2020.
This document provides an overview of the FMCG sector in India. It notes that the FMCG sector accounts for around 3% of India's GDP and includes food and beverages, household care, and personal care products. The top FMCG companies in India are Hindustan Unilever, Patanjali, ITC, Nestle, and others. The FMCG sector is growing at a rate of 11.9% annually and urban areas account for 60% of revenues currently, though rural markets are growing rapidly as well. The industry faces high competition and potential substitutes but opportunities for growth include expanding in rural markets, developing innovative products, and increasing product penetration across India.
Final project on Britannia company and competitor Raman Bang
sector information, sector analysis, company profile, company portfolio, porter five force model, swot analysis, Competitor analysis, Marketing mix, Analysis of net profit,revenue,debt-equity, Finance ratio, Organisation hierarchy,, Job description Job analysis, marketing product life cycle,
Full report of company on the basis of 3 profile Marketing, finance, Human resource management.
Factors affecting Demand and supply of FMCG sectorNitya Tailang
This document summarizes factors that affect the demand and supply of products in India's fast-moving consumer goods (FMCG) industry. It outlines that FMCG includes household care, personal care, health care, and food and beverages. The main factors affecting demand are price, tastes, population growth/income, demography, inflation, and government policies. The main factors affecting supply are price, natural conditions, production costs, technology, competition, and government policies. The document also outlines opportunities for growth in rural markets, e-commerce, and increasing disposable income, as well as projections that India will contribute more to global FMCG consumption in the future.
The document provides information about the FMCG sector in India. It discusses that the FMCG sector accounts for 50% of the overall market and includes products like oral care, hair care, skin care, etc. It also mentions that the food and beverages segment accounts for 31% of the sector and includes products like snacks, beverages and dairy. Finally, it provides a detailed overview of Haldiram, one of the major players in the Indian snacks market, including its history, product portfolio, marketing strategies and SWOT analysis.
Hindustan Unilever Limited (HUL) is India's largest consumer goods company based in Mumbai. It is a majority owned subsidiary of British-Dutch company Unilever. Formed in 1933 as Lever Brothers India Limited, it was renamed in 2007 as HUL. HUL's product portfolio includes foods, beverages, cleaning agents and personal care products which it distributes to over 2 million retail outlets across India. When analyzing HUL's product portfolio using the BCG matrix, its food brands and home care brands would be considered cash cows due to their large market share in mature industries. Personal care brands would be stars due to their large market share and growth in an expanding market.
Hindustan Unilever Limited (HUL) is the largest fast-moving consumer goods (FMCG) company in India, operating in foods, beverages, cleaning agents, and personal care products. It is majority-owned by British-Dutch company Unilever and headquartered in Mumbai. HUL has over 35 brands spanning 20 categories and, according to market research, two out of three Indians use HUL products.
The document provides an overview of the Indian FMCG sector. Some key points:
- The Indian FMCG sector has a market size of US$25 billion and is poised to grow 10-12% annually. It has a well-established distribution network across 6 million retail outlets.
- Organized retail is growing and expected to increase its share of the market to 14-18% by 2015, creating new channels for FMCG players.
- Rural India accounts for one-third of total consumption and is an important growth area as FMCG companies develop rural marketing strategies.
- Food products are the largest consumption category, accounting for 21% of India's GDP. Leading players in this segment are mentioned.
This document provides information about Cargill Group of Companies, which operates in the fast moving consumer goods (FMCG) industry in India. It discusses Cargill's brands and products, including details about its Paradip production unit in Orissa. The summary discusses Cargill's history and operations in India, and provides an overview of the Indian FMCG industry and Cargill's role within it.
Colgate-Palmolive is a global consumer products company headquartered in New York City. It is the largest seller of toothpaste worldwide and also produces personal care products like shampoos and deodorants as well as household cleaners. The fast moving consumer goods (FMCG) industry in India, which includes segments like cosmetics, packaged food, and home care products, is growing significantly. Within this industry, Colgate-Palmolive faces competition from other major FMCG companies like Procter & Gamble. The document provides an overview of Colgate-Palmolive and the FMCG industry in India.
The document provides an overview of the FMCG industry in India. Some key points:
1. The size of the Indian FMCG sector was $44.9 billion in 2013 and is estimated to reach $135 billion by 2020, growing at a CAGR of 17%.
2. Food products and personal care account for the majority (69%) of the FMCG market. Rural markets contribute 33% currently but are expected to reach 45-50% by 2020, representing significant growth potential.
3. The industry is growing with rising incomes, changing lifestyles, and greater product availability in both urban and rural areas. However, high inflation slowed growth to 9.24% in 2013.
The document provides an analysis of the Fast Moving Consumer Goods (FMCG) industry in India. Some key points:
- FMCG is a $2 trillion industry representing 2.5% of India's GDP and growing at 17.3% annually. Food and personal care make up two-thirds of revenues.
- Porter's Five Forces analysis indicates barriers to entry are modest while competition and threat of substitution are high.
- Major players include HUL, ITC, Nestle. Trends include focusing on rural markets, smaller pack sizes, and new brand launches.
- The industry is expected to continue growing despite a recent slowdown, fueled by rising incomes and expanding middle class.
The document provides an overview of the Indian FMCG sector. It summarizes that the FMCG sector is the fourth largest sector in India with a market size of $13.1 billion and has grown at an average of 11% annually. Food products account for 43% of the market. It also outlines some of the major players, trends and growth opportunities in the sector, including a growing rural market and rising incomes. Key strengths are established distribution and low costs, while threats include foreign competition and tax regulations.
The document provides an overview of the fast moving consumer goods (FMCG) sector in India. It discusses that the FMCG sector is the 4th largest sector in the Indian economy. It has experienced rapid growth from $30 billion in 2011 to a projected $74 billion by 2018. The sector is characterized by competition between organized and unorganized players and a strong distribution network. It also provides details on the key segments in the FMCG sector including food and beverages, personal care, healthcare goods, and home care commodities.
Fast Moving Consumer Goods (FMCG) Summit Issues and Opportunities - Industry...Resurgent India
Fast Moving Consumer Goods (FMCG) Summit Issues and Opportunities - Industry Opportunities & Issues - Part - 7
Rising consumption levels in rural markets is expected to drive demand for FMCG products- The Indian market has a huge untapped rural market that is continuously offering opportunities for growth in the FMCG sector. Rising income levels and efforts by marketers to tap the consumer base at the bottom of the pyramid are paying off to create opportunities in rural India.
The document provides an overview of the Fast Moving Consumer Goods (FMCG) sector in India. It discusses that FMCG goods include daily consumable items like household products, personal care products, and food and beverages. The FMCG sector in India is the fourth largest sector worth over $13 billion currently and expected to grow substantially over the next decade. Key drivers of growth include rising incomes, urbanization, and penetration into rural markets. The sector faces some challenges from rising costs and inflation as well.
This document discusses marketing strategies for Ayurvedic products in India. It notes that the Ayurvedic drug industry has commercialized and companies now use marketing concepts to gain profits. Specifically, companies focus on the marketing mix of product, price, promotion, and place to create strategic advantages. The future of the Ayurvedic industry looks promising as companies enter the market with innovative products, quality packaging, and strategic marketing activities.
Indian Fast Moving Consumer Goods IndustrySWAROOP PANDAO
The Indian FMCG industry is the fourth largest sector in India and is poised for significant growth and increasing contributions to world trade. It is a high growth and high profit sector characterized by a well-established distribution network and intense competition between organized and unorganized segments. Food and beverages account for 52% of the FMCG market, while personal care accounts for 20% and household care 10%. Key growth drivers include rising incomes, a growing rural market, and changing consumer preferences. The industry faces threats from increased imports and potential slowdowns but opportunities remain in tapping the rural market and growing exports.
This document provides a report on Consumer Product Limited. It begins with an introduction to fast moving consumer goods (FMCG) and provides an overview of the major players in the Indian FMCG sector. Some of the top FMCG companies in India are listed as Hindustan Unilever Ltd., ITC, Nestle India, GCMMF (Amul), Dabur India and others. The outlook for the FMCG sector in India is positive given the large population and low per capita consumption currently.
INDUSTRY SIZE / CONTRIBUTION TO GDP,
MARKET OVERVIEW,
PORTERS FIVE FORCE MODEL,
COMPANY INFORMATION,
SWOT ANALYSIS OF ITC LTD.
PRODUCT PORTFOLI OF ITC LTD.
COMPETITOR ANALYSIS,
MARKETING MIX,
STP OF ITC SAVLON
PRODUCT LIFE CYCLE OF ITC SAVLON HANDWASH
SALES FORCASTING
DISTRIBUTION CHANNEL
DIGITAL MARKETING STRATEGY OF ITC SAVLON
DATA REPRESENTATION( using SSPS)
FINDING
CONCLUSION
THANKY YOU
To Know The Consumer Preference About NesCafe CoffeePrashant Dhanani
The document discusses the Fast Moving Consumer Goods (FMCG) industry in India, with a focus on the FMCG industry in Surat city. It provides an overview of the global and Indian FMCG industry, noting that it is the fourth largest sector in India valued at approximately $14 billion. It also discusses the growth potential in India, particularly in rural areas, as disposable incomes rise and consumption patterns change. Finally, it examines consumer preferences and characteristics of the FMCG sector in India.
This document provides a project report on the financial analysis of ITC Limited, an Indian conglomerate. It includes an acknowledgement, table of contents, abstract, introduction on ITC and the FMCG industry in India. It then discusses ITC's business overview, SWOT analysis, and provides various financial analyses including ratio analysis, DuPont analysis, cash flow analysis and cross-sectional analysis. Key financial ratios like current ratio, quick ratio, debt-equity ratio and interest coverage ratio are examined. The document contains annexures with ITC's 2012-2013 balance sheet and income statement. It aims to conduct a comprehensive analysis of ITC to evaluate its business investments.
The Indian FMCG sector is the fourth largest in the Indian economy with a market size of $13.1 billion according to Nielsen. FMCG includes food and beverage, personal care, pharmaceuticals, plastic goods, paper and household products. The sector is growing rapidly due to rising incomes, urbanization, and competition. Rural markets account for over 20% of FMCG sales. Key growth drivers include rising incomes, urbanization, and expanding distribution networks. The sector faces challenges like price sensitivity, rising costs, and increasing competition. However, opportunities exist in serving rural and premium markets through innovation.
1. The document discusses Fast Moving Consumer Goods (FMCG) sector in India. It touches on key aspects like top companies, market size, opportunities and challenges.
2. FMCG refers to daily necessity products like food, beverages, personal care items that have high turnover. India's FMCG market is the 4th largest and growing.
3. Top companies include Hindustan Unilever, ITC, Nestle, Amul, Dabur etc. The sector sees growth opportunities in rural India and with rising incomes while threats include regulatory changes.
I have done my project of Godrej expert of FMCG industry. its gives lots of knowledge during the making my project and understand the industry or profile.
This document discusses the importance of fast-moving consumer goods (FMCG) in rural markets in India. It notes that the FMCG sector plays a vital role in rural marketing and is an important contributor to India's GDP. Rural India represents a large untapped market and opportunity for FMCG brands to expand. The document provides background on the size and growth of India's FMCG sector, key product categories, and examines strengths, weaknesses, opportunities and threats. It also discusses the role of government policies in supporting rural FMCG marketing and growth potential in converting more consumers to branded products.
Similar to Fast Moving Consumer Goods (FMCG) Summit - Issues and Opportunities - Full Report (20)
Acquisition Opportunity! Exploring the Future of Ayurvedic & Unani Medicines!Resurgent India
Join us in acquiring INDIAN MEDICINES PHARMACEUTICAL CORPORATION LIMITED (IMPCL), a profitable venture with a strong legacy. As a trusted government-owned entity, holding Mini Ratna Category II status, we're shaping the future of natural healing together.
The goal of the demonetization move in India is to make the economy stronger and eliminate the parallel cash economy which is unaccounted and untaxed. While this can impact the GDP negatively in the short term, it should have positive long term consequences. For e-commerce companies, which already have a digital payments system in place, it should lead to higher online payment and eventually eliminate the painful cash on delivery option. However, in the short term, witness a decline in GMV from India as the economy adjusts to the “new normal”.
Msme funding – Opportunities & Challenges (Part 5)Resurgent India
In India, the preferred mode of finance is either self or other sources. This further complicates the situation, as with these sources an enterprise cannot challenge the increasing competition
Funding Sme – MSME FINANCE – DEMAND & SUPPLY - Part - 9Resurgent India
The present domestic market conditions do not provide enough opportunities for the MSME sector for raising low cost funds. To improve the flow of credit there is a need to provide low cost finance to the MSME sector, which has limited working capital and is dependent exclusively on finance from public sector banks. The cost of credit in the Indian MSME sector is higher than its international peers. A transparent credit rating system, simplification/reduction in documentation for accessing finance, providing interest rate subvention to the MSME sector must be taken into consideration in order to maintain the growth of the MSME sector.
Funding Sme – The Challenges And Risk Within - Mezzanine Financing - Part - 8Resurgent India
This document discusses mezzanine financing and access to equity capital for small and medium enterprises (SMEs) in India. It explains that mezzanine financing, which sits between traditional debt and equity, can help address financing gaps for SMEs. While mezzanine financing shows potential, it remains largely available only to larger companies in India currently. The document also discusses how SME exchanges launched by Indian stock exchanges aim to help SMEs access institutional and retail equity capital. Over 30 companies have listed on the BSE SME exchange since its launch in 2012. Accessing alternative sources of financing like mezzanine funding and equity markets can help improve SME competitiveness and contribution to the Indian economy.
Funding Sme – The Challenges And Risk Within - Alternative financing sources ...Resurgent India
Securitization of Trade Credit: Trade credit is an important source of financing for MSMEs, as they sell on credit to their large customers and then wait for long periods for payment. If these receivables (trade credit) could be packaged as a securitized asset, which would essentially be a commercial paper with the credit rating of the large firm, it could help MSMEs reduce their investment in working capital and their need for finance significantly. The credit worthiness of a typical MSME would also improve, qualifying it for greater bank funding. Though the securitization process which is similar to factoring, could be more cost-effective than bank funding, factoring, and letters of credit.
Funding Sme – The Challenges And Risk Within - MSME FUNDING - NEED FOR ALTERN...Resurgent India
Finance is the lifeline of any enterprise. India has one of most extensive banking networks in the world. Despite, a considerable expansion of the banking infrastructure during the recent years, the provision of finance to grassroot level businesses, scattered across the nation, still remains an enormous challenge. Going ahead, it is also observed that Indian MSMEs have limited access to finance. Majority of the MSMEs operates on the funds of its promoters, thus limiting its growth. The limited or nonavailability of institutional finance at affordable terms is also hindering innovation in the Indian MSMEs.
Funding Sme – The Challenges And Risk Within - MSMEs CONTRIBUTION TO ECONOMY ...Resurgent India
Economy, with more than 31 million units employing more than 80 million persons. Further, productivity of the MSME sector has been improving significantly with fixed investments and employment growing consistently over the past few years. This is a direct indication of the efforts focused on this sector to integrate the workforce with technological enhancements to increase production. Fixed investments in the MSME sector between FY07 and FY12 has grown at a CAGR of 6.5 per cent and employment has grown by more than 6 per cent (y-o-y). Further, between FY07 and FY12, the sector’s total gross output grew at a CAGR of 6.3 per cent - reiterating the substantial contribution of the MSMEs to the Indian economy.
MSME Financing - Alternative Financing Instruments - Part - 14Resurgent India
Asset-based finance is an alternative form of financing where firms obtain funding based on the value of specific assets like accounts receivable, inventory, and equipment, rather than on their own creditworthiness. It provides faster access to cash under more flexible terms than traditional bank loans. While asset-based finance is widely used, alternative debt instruments have seen limited usage among SMEs. Policymakers are targeting transparency and investor protection rules to develop corporate bond markets for SMEs. Trade credit is also an important source of short-term financing for SMEs through loans and guarantees to support import/export activities.
MSME Financing - Financing options available to MSMEs-II - Part -10Resurgent India
SME exchange
GOI and regulators have initiated several measures to address the low level of MSME financing through the capital markets. In March 2012, post issuance of SEBI guidelines, both BSE and NSE have set up institutional trading platforms in the SME segment to allow MSMEs to list and raise equity capital through venture funds, private equity and wealthy individuals, without initial public offerings.
MSME Financing - FINANCING MSME’S IN INDIA - Part - 7Resurgent India
Finance is life blood of any enterprise. But Indian MSMEs have always suffered the deficiency of this life blood, despite India having one of the most extensive banking networks in the world.
The present domestic market conditions do not provide enough opportunities for the MSME sector for raising low cost funds. To improve the flow of credit there is a need to provide low cost finance to the MSME sector, which has limited working capital and is dependent exclusively on finance from public sector banks. The cost of credit in the Indian MSME sector is higher than its international peers.
Indian Insurance Industry - Recent Industry Trends - Part - 5Resurgent India
Bancassurance means selling insurance product through banks. Banks and insurance company come up in a partnership wherein the bank sells the tied insurance company's insurance products to its clients. Globally, bancassurance has emerged as an important channel for distribution of insurance products. Various international studies have shown that a bancassurance strategy has indeed saved costs of insurance companies in the long run.
Indian Insurance Industry - Key Issues and Challenges - Part - 2Resurgent India
While a range of economic and financial reforms have helped the insurance sector grow, there remains a host of challenges which need to be addressed for harnessing the full potential of the sector:
DMIC will be an essential component of India’s future economic development. Implementation of DMIC Project requires huge investment for building up of infrastructure. It is envisaged that there will be primarily two categories of projects under the purview of state and central government agencies as:
DMIC Summit - Implementation and Institutional Framework - Part - 2Resurgent India
The effective implementation of such large and complex project, involving multiple states and agencies calls for immaculate planning and a robust administrative structure. In order to ensure that the traditional pitfalls of project implementation are overcome, it is proposed that a Project Development approach be adopted, wherein each facet of the project is rigorously developed from an engineering, financial, contractual, environmental and social perspective, along with interlinkages, on prioritization and selective basis and prior to commencement of implementation
DMIC Summit – Developing Hub for Investors - Overview & Approach - Part - 1Resurgent India
Delhi-Mumbai Industrial Corridor, from here on referred to as DMIC, is a multi-modal High Axle Load dedicated freight corridor connecting Delhi and Mumbai. It is a mega infrastructure project at USD 100 billion with technical and financial aid built in from Japan. The project is a flagship programme of Government of India with the aim of creating futuristic Industrial Cities by leveraging the "High Speed - High Capacity" connectivity backbone provided by Western Dedicated Freight Corridor (DFC).
Smart Cities - Global Case Studies - Part - 5Resurgent India
Greater Manchester is the single biggest economic area outside London with a residential population of 2.7 million. Greater Manchester is made up of 10 local authorities, of which the city of Manchester is the largest. The city of Manchester is located at the core of the Greater Manchester metropolitan area. Manchester’s core sectors are the business, finance and professional services sector which contribute ~40% to the city’s economy.
Smart Cities - Global Case Studies - Part - 4Resurgent India
Beijing, as the capital and political and cultural center of China, is a world famous ancient city and modern cosmopolis. Standing in the northwest of Beijing, Haidian District is important and famous for its science and technology, culture, education and tourism. It, consists of 22 sub -districts and 11 townships, has a total area of 426 square kilometers and a resident population of 1.5 million.
Empowering MSMEs - Benefits of Credit Rating in MSME - Part - 8Resurgent India
Approaching a credit rating agency is a good option for small and medium enterprises (SMEs) given the problems they face in seeking finance. Rating agencies assess a firm's financial viability and capability to honour business obligations, provide an insight into its sales, operational and financial composition, thereby assessing the risk element and highlights the overall health of the enterprise.
Empowering MSMEs - Skills Development of the MSME Sector - Part - 7Resurgent India
One of the thrust areas for increasing the competitiveness of MSMEs includes skills development. Skills development not only helps in improving productivity but also fosters entrepreneurship. Hence, it is imperative for the concerned governmental agencies, trade associations and MSMEs to come together and discuss on how to make training programmers relevant and attractive for MSMEs. The lack of human resources has been a long-standing problem faced by MSMEs in the country. Despite India’s large pool of human resources, the MSMEs continue to lack skilled manpower required for manufacturing, marketing, servicing, etc.
Empowering MSMEs - Skills Development of the MSME Sector - Part - 7
Fast Moving Consumer Goods (FMCG) Summit - Issues and Opportunities - Full Report
1. THE ASSOCIATED CHAMBERS OF COMMERCE AND INDUSTRY OF INDIA
Issues and Opportunities
Summit
FMCG
August 2015 – New Delhi
2.
3. FMCG Issues & Opportunities
Contents
Message from the desk of XX
Message from the desk of Sh. Jyoti Gadia, Resurgent India
FMCG Industry Overview
Market Size
Major Segments
Competitive Landscape
Recent Trends
Exports & Imports
Government Policies &Regulatory Framework
Industry Opportunities & Issues
Future Outlook
4.
5.
6. MESSAGE
Fast moving consumer goods (FMCG) is the fourth largest sector in the Indian
economy and creates employment for more than three million people in downstream
activities. Indian market is becoming the ‘mother of all markets’ which is rapidly
increasing demand for all classes of product. It is due to the increasing numbers
entering the consumption economy, constant growth in economic power at all levels,
retailandmediarevolutionwhichdrivesconsumerchoice,informationandincreasing
urbanization.
The Government of India’s policies and regulatory frameworks such as relaxation
of rules and approvals for foreign direct investment (FDI) in multi-brand retail are
some of the major growth drivers in this sector. There is a lot of scope for growth in
the FMCG sector from rural markets with consumption expected to grow in these
areas as penetration of brands increases.
In order to recognize the contribution of the FMCG sector to the socio-economic
growth of India, to discuss opportunities and challenges in the coming years,
ASSOCHAM is organizing the ‘FMCG Summit – Issues and Opportunities’. On this
occasion ASSOCHAM jointly with Resurgent India has bring out a study on the subject
with the objective of understanding the Issues & Challenges being faced by various
stakeholders of the FMCG Sector.
WeacknowledgetheeffortsmadebyResurgentIndiaandASSOCHAMteaminbringing
out this well researched paper. We hope that the deliberations of the Summit will help
in laying the roadmap for the future growth and development of this sector.
D. S. Rawat
Secretary General
7. FMCG Issues & Opportunities
MESSAGE
Jyoti Prakash Gadia
Managing Director
Resurgent India Limited
FMCG sector holds significant importance in the growth of Indian economy. It has grown from USD
16 billion in 2006 to reach a market size of USD 52 billion in 2014, and is forecasted to reach a
market size of USD 104 billion in 2020. F&B is the leading segment, accounting for 47 per cent of the
overall market share followed by Personal care at 22 per cent.
Growth in consumer base, changes in consumption pattern, general increase in disposable income
and rise in consumption demand in rural markets has helped in increasing the demand for FMCG
products. In addition, innovative marketing & advertising initiatives of FMCG companies too have
helped in creating and maintaining demand.
Over the years, Indian consumers have undergone a behavior and attitudinal shift leading to
corresponding shifts for the FMCG industry. We have captured this in the report under two separate
heading – a) Recent Trends that have shaped or continue to shape the consumer demand space b)
Opportunities that have been established from the aforementioned or earlier long term trends.
Some of the notable opportunities for the FMCG sector are around - rising demand from the rural
segment, growing personal care market, emerging trends in Premiumization and budding health and
wellness space, etc.
The industry has by far acknowledged the shifts and has reacted swiftly by diversifying portfolios,
bringing in access and affordability or reformulating existing products to engage better with target
consumers. With the improved underlying macros, the next years seem to bode well for the sector.
We have highlighted a few challenges which if addressed can add the required momentum to FMCG
growth. To call out the important ones, they are, roll out of GST as planned in April 2016, rural
support amidst monsoon concerns, improved infrastructure to resolve supply chain constraints,
standardized regulatory norms, and check for counterfeit goods among many others.
We hope the report manages to touch upon all pertinent topics for the industry, to be taken forward
for larger deliberation and action.
Jyoti Prakash Gadia
Managing Director
Resurgent India Limited
9. FMCG Issues & Opportunities
Industry Overview & Market Size
Fast Moving Consumer Goods (FMCG) comprises of consumer goods that are consumed and
are sold quickly. These are also termed as non-durable goods and comprises of carbonated
beverages, personal care products, cleansing products (like detergents), confectioneries and
other household / personal consumables like food & food products.
FMCG sector is the fourth largest economic sector in the country. This sector has grown
from USD 16 billion in 2006 to reach a market size of USD 52 billion in 2014. Going forward,
the FMCG sector is forecasted to grow at a CAGR of 12% to reach a market size of USD 104
billion in 2020
Major Segments / Components
The Indian FMCG Industry can be broadly segmented into the Food & Beverage, Personal care,
Household consumables and Tobacco products.
1. Food & Beverage Products- Health beverages, staples/cereals, bakery products, snacks,
chocolates, ice cream, tea/coffee/soft drinks, processed fruits and vegetables, dairy
products, edible oils, branded flour, etc.
2. Personal Care Products- Oral care, hair care, skin care, cosmetics/deodorants, perfumes and
personal hygiene products, etc.
3. House hold Consumables- Fabric wash, household cleaners, detergents, etc.
4. Tobacco products
16 18
21
24
30
35
41
45
52
104
0
20
40
60
80
100
120
2006 2007 2008 2009 2010 2011 2012 2013 2014 2020F
Market Size of FMCG Sector (in USD Bn)
CAGR 16%
%%
Source: India Brand Equity Foundation
CAGR 12%
10. FMCG Issues & Opportunities
Food & Beverage products are the largest segment in the FMCG sector accounting for approximately
47% of market share followed by personal care products at 22% and rest is accounted by tobacco
and other household consumables.
Urban-Rural share
The urban segment contributes a significant share; approximately 67% of the overall
FMCG revenues
Demand for FMCG products is growing at a fast pace in rural India, which comprises of
70% of India’s 1.2 billion population; this segment currently accounts for 33% of the
overall FMCG revenues.
Food & Beverages,
47%
Personal Care, 22%
Tobacco, 16%
Household
Consumables &
Others, 15%
Market Size Break-up by Segment
Urban, 67%
Rural, 33%
FMCG Industry Break-up
Source: India Brand Equity Foundation
Source: India Brand Equity Foundation
Market Size –USD 52 Bn
Market Size –USD 52 Bn
11. FMCG Issues & Opportunities
In the recent past, the FMCG market has grown at a faster pace in rural India compared
with urban India on account of several factors such as minimum support price on crops,
loan waivers and employment guarantee schemes, etc.
Rural demand is expected to rise further with the favorable announcements in union
budget 2015. There is clear focus on uplifting the rural economy with allocation of funds
for irrigation, roads, sops including rural development schemes like MNREGA; all these
are expected to have a bullish effect on the rural market of FMCG products.
Competitive Landscape
The Indian FMCG market is controlled by small number of companies, which include both
subsidiaries of global leaders as well as domestic companies. These players enjoy country wide
presence and well entrenched distribution network both in the urban and rural markets. In addition
to these large companies, the Indian FMCG sector also comprises of few regional players which
benefit from the significant market share in their respective regions. Although the large companies
have a pan India presence, they face tough domestic competition in certain states / geographies
from region brands.
By ownership pattern, companies in the FMCG space are divided into two categories - Indian arm of
foreign companies and Indian company. Indian companies are further divided into two, based on
geographical presence - companies with Pan India presence and companies with regional presence.
12. FMCG Issues & Opportunities
Indian Arm of Global Companies
Company Brands
Food & Beverage: BRU, Kissan, Brooke Bond Red Label,
Knorr, Kwality Walls, Magnum
Home Care: VIM, Surf Excel, RIN, Wheel, Domex, Sunlight
Personal Care: Fair & Lovely, Lakme, Pears, Clinic Plus,
Pond’s, Pepsodent, Dove, Lifebuoy
Home Care: Ariel, Tide, Ambi Pure
Personal Care: Olay, Oral-B, Pantene, Pampers, Vicks,
Gillette,
Head & Shoulders,
Food & Beverage: Nescafe, EveryDay, Nestle Milk Products,
Maggi, Alpino, Kit Kat, Munch
Indian Companies: Pan India Presence
Company Brands
Food & Beverage: Aashirwad, Sunfeast, Bingo, Candyman
Personal Care: Vivel, fiama Di Wills, Engage, Superia
Cigarettes: Gold Flake, Navy Cut, Lucky Strike, Bristol
Stationary Products: Classmate, Paperkraft
Dairy Products: Amul brand of dairy products
Personal Care: Parachute, Nihar, Hair & Care, Livon, Mediker
Food & Beverages (Edible Oil): Saffola
Food & Beverages Sunrich, Ruchi Gold, Mahakosh, Nutrela
Personal Care: Ruchi No.1,
Personal Care: Godrej Expert, Darling, No.1, Cinthol, Cuticura
Home Care: Good Knight, HIT, Ezee
13. FMCG Issues & Opportunities
Indian Companies: Regional Presence
Company Brands
Rohit Surfactants Private Ltd
Home Care: Ghari Detergents, Xpert Dishwash
Personal Care: Venus
Personal Care: Chik, Nyle, Meera
Food & Beverages: Ruchi Magic, Chinnis, Garden, Cruncho,
Cavins, Maa
On account of the intense competition between the FMCG players, there is no clear leader across all
FMCG categories. For instance, HUL is market leader in skin care and shampoo products. Colgate-
Palmolive is the leader in oral care, Marico in hair oil, and Dabur in fruit juice.
Recent Trends
1. Foreign Direct Investment- Foreign investments in this sector have grown gradually to reach
the current size. FDI in the FMCG sector accounts for approximately 3% of the nation’s total
FDI inflows between April 2000 and May 2015. Cumulative FDI inflows into India from April
2000 to May 2015 in the food processing sector stood at USD 6,360 million, accounting for
2.49% of overall FDI inflows, while that in the soaps, cosmetics and toiletries stood at USD
1,050 million, accounting for 0.41%.
2. Economic progress is favorably influencing the FMCG sector. Growth in FMCG sector majorly
depends upon the performance of the economy, since pickup in economic growth leads to
better consumption, which in turn helps consumer goods companies to perform better. The
economy is on a growth trajectory - India’s gross domestic product (GDP) expanded 6.9% in
FY 2014 compared with 5.1% expansion in FY 2013. This coupled with other factors such as
low retail inflation, fall in international commodity and crude prices are expected to drive
consumption demand for FMCG products.
3. Rising ad spend by FMCG companies. FMCG companies in India have increased their
expenditure on advertisement and sales promotion by about 10% in 2014-2015 on account
of growing competition and in an effort to reach out to a wider target audience. Of all the
FMCG companies, Hindustan Unilever (HUL) spent the highest at USD 646 million in 2014-
2015 as compared to USD 602 million in 2013-2014. HUL was very aggressive in A&P spends
to retain market share and increase its volumes.
It is understood, that the high level of competition in the market has pushed the FMCG
companies to increase their A&P spends. Further with raw material costs declining it have
been easier for the companies to increase A&P spends. While most of the companies have
14. FMCG Issues & Opportunities
managed to increase their A&P spends as their manufacturing costs declined due to benign
raw material prices.
4. Growing contribution from rural markets – Several FMCG companies have been investing to
expand rural reach in the past few years. HUL nearly trebled its rural presence in the past
three years, while Britannia and Godrej Consumer doubled their direct distribution network
and P&G stepped up investment to push mass priced products. The rural contribution to
overall FMCG revenue has gone up from 30% five years ago to 33% now, on the back of
increased government focus and support to the rural segment in the form of investments in
rural infrastructure, higher minimum support price on crops, employment guarantee
schemes, etc. All this has increased farm income and boosted demand for FMCG products.
5. Increasing use of online platforms for ordering FMCG products- It has been witnessed that
there has been a growing demand for online FMCG products. There is a visible shift in
consumer behavior in India as more and more people are turning to online platforms for
ordering goods such as shampoo, makeup, deodorants, and toiletries. It is estimated that
the online sales in FMCG categories, such as male grooming, beauty, food and beverages,
and infant care would reach USD 5 billion by 2020. This would make up five per cent of total
FMCG sales, estimated to reach USD 104 billion by 2020.
Majority of the FMCG companies leverage e-commerce websites like Amazon India and
Flipkart.com to sell their products. It is believed, that, in the near future as well, the FMCG
companies are not considering setting up their own online portals on account of economic
and logistical challenges, insufficient metrics, poor infrastructure support and lack of
appropriate talent.
6. Rising demand for ready to eat food- FMCG major launched ready to eat meals in 2001 and
this has been the main revenue and profit driver for its non-cigarette FMCG business. ITC's
packaged food business recorded sales of USD 1.01 billion in the year ending March 2015
7. Trust and transparency will grow in importance. Consumers are likely to associate strongly
with the brands that are able to demonstrate the same in their dealings with the society.
This is likely to put private and local players in a sweet spot.
8. Health concerns will grow amidst demands of reversal of epidemics like Obesity. This will
put pressure on companies to reformulate products with natural alternatives and diversify
portfolio with more nutrition trademarks. There will be few sub-trends around : a) Fresh and
locally sourced will become important b) Sugar will need re-invention c) back to the roots /
gourmet products will grow
9. Emergence of Social Media – As per a recent Nielsen report, consumer buying decisions are
influenced a lot by social chatter. This puts the onus on brands to remain socially active so
they can remain in the consumer consideration. However, this also makes them vulnerable
with the empowerment which internet gives to the consumer.
10. Premiumization-- On account of increasing disposable income and abundant variety to
choose from, consumers are ready to pay a premium. For the affluent, it is an emotional
15. FMCG Issues & Opportunities
need to feel exclusive as they move from premium to super premium products whereas for
upper middle income class it is the aspiration and rewarding self-experience that makes one
upgrade. The same has been detailed in the FMCG opportunities section.
11. Advent of new channels like Wellness chains and Pharmacy stores, offers additional retail
footprint especially for categories related to Health and Wellness.
12. Use of Co-packers and third party manufacturing has helped companies focus on core
marketing, having assured quality production. Reservation of several items for small scale
industry as well as additional tax incentives have made third party manufacturing a popular
route for many big players.
13. The consumers have shown increased confidence in local and private labels, reflected in
double digits growth for them in recent years. There are a lot of factors that seem to be
driving the wind in favor of these players - a) pride in local produce b) low sized SKUs leading
to lower price point c) assurance and trust in quality d) innovative and attractive packaging,
with the flexibility to change graphics faster than that for a bigger MNC which are driven by
global protocols etc.
14. Need for Speed and Convenience will continue to grow. Consumer will want things quicker
and easier from brands that save them time and reduce the effort. A variation of this trend
will manifest itself in the form of increased On the Go consumption.
15. Partnering with social service organizations – FMCG companies are increasingly
collaborating with social service organizations to drive consumption of personal hygiene
products. Example- Dabur India plans to enter into a partnership with Sulabh International, a
social service organization focused on sanitation, to drive personal cleanliness and hygiene,
and inculcate the habit of using toilets. Under the partnership, Dabur will adopt six Sulabh
public conveniences located at slums in Delhi, undertaking cleaning, maintenance, sanitation
and hygiene checks at these locations.
Export / Import
Over the years, the FMCG companies have targeted overseas markets like Bangladesh, Pakistan,
Nepal, and Middle East because of the similar lifestyle and consumption habits between these
countries and India. But this effort has achieved limited success as exports continue to remain a very
small proportion of the overall production. Processed foods and personal care products are the key
export items in the FMCG space.
Off late, the trend is that many FMCG firms are importing more than they are exporting. Imports
include raw materials and spare parts. Typically, companies import raw materials which are available
at a cheaper cost in other locations. Example- palm oil for making soaps is imported from Indonesia
because it is cheaper than purchasing locally.
Despite having manufacturing facilities in India, the country has not emerged as an export hub for
FMCG companies. This is on account of several factors – a) Many FMCG firms have manufacturing
units located abroad, so exporting from India is less viable b) The size of export market in nearby
countries such as Bangladesh and Sri Lanka is low c) Lack of cost arbitrage in FMCG segment
compared to other sectors such as information technology and automobile components, where
16. FMCG Issues & Opportunities
India has an advantage of skills and low labour costs d) Restrictions on exports up to 10% in
particular categories of products.
Exports –Imports for Key FMCG Companies (in INR Crores)
Company Exports Imports
FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14
HUL 1352 490 655 548 573 1450 930 906 931
Colgate- Palmolive 71 99 113 80 82 66 116 143 176
P&G Hygiene 10 5 8 17 24 106 105 134 150
Gillette India 51 45 15 18 15 153 179 112 153
Source : BS Research
17. FMCG Issues & Opportunities
Government Policies
&Regulatory Framework
18. FMCG Issues & Opportunities
Policy and Regulatory Framework
1. Goods and Service Tax (GST) –
a. The implementation of Goods and Services Tax is scheduled for April 16.
b. Announcement of GST is a significant development for the FMCG sector if
implemented in a timely and effective manner. The proposed law will end
differential rates of sales taxes in different states and introduce a uniform tax on
goods and services throughout the country.
2. Excise duty-
a. The excise duty on cigarettes has been increased by 25% for cigarettes of length not
exceeding 65mm and by 15% for cigarettes of other lengths
b. The excise duty rate has been increased to 12.5% with educational tax being
subsumed
3. Relaxation of license rules-
a. Industrial license is not required for almost all food and agro-processing industries,
barring certain items such as beer, potable alcohol and wines, cane sugar, and
hydrogenated animal fats and oils as well as items reserved for exclusive
manufacture in the small-scale sector
4. FDI in organized retail-
a. The government’s decision to allow 51% FDI in multi brand retail and 100% FDI in
single brand retail augers well for the outlook for the FMCG sector. This move is
expected to bolster employment, and supply chains, apart from providing high
visibility for FMCG brands in organized retail markets, boost consumer spending,
and encourage more product launches.
b. FDI of 100% under the automatic route is allowed in the food processing sector,
which is considered as a priority sector.
c. Cumulative FDI inflows into India from April 2000 to May 2015 in the food
processing sector stood at USD 6,370 million, accounting for 2.49% of overall FDI
inflows while that in the soaps, cosmetics and toiletries was USD 1,050 million,
accounting for 0.41%.
5. Food Security Bill (FSB)-
a. The rollout of the Food Security Act, 2013 which delivers subsidized grain to low
income families is expected to free up income for spending on FMCG goods.
b. This is expected to trigger higher consumption spends, particularly in rural India,
which is an important market for most FMCG companies
6. Telecom Regulatory Authority of India (TRAI) advertising regulations-
a. Under the latest regulations issued by TRAI, broadcasters are allowed advertisement
time of not more than 10 minutes for commercials and additional 2 minutes for own
channel promotion. This regulation came into force on 1 October 2013. This TRAI
directive was challenged by the broadcasters in the Delhi High court and they
19. FMCG Issues & Opportunities
secured an interim stay on this rule from the court. However, the matter is still
awaiting a final decision and is expected to come for hearing in July 15.
b. This new rule if implemented is likely to compel FMCG companies to pay more for
advertisements on the television media and thereby increase their ad spend.
Packaged Commodities Rules 2011
The Packaged Commodities Rules (PCR) under Standards of Weight and Measures Act was amended
in 2011 to stop exploitation in price fudging and to get strict about how packaging information
should be displayed on pre-packaged goods.
The Legal Metrology (Packaged Commodities) amendment rules stipulate the information that
should be provided on a pre-packed commodity sold by a retailer. This includes name of the
manufacturer or the packer if he is different with his address and phone number, marketer, month
and year of manufacture, net quantity either in grams or in meters or in ml as the case may be,
batch number and the generic name of the product (i.e.) if it is common salt, it must be mentioned
as sodium chloride. The name, address, e-mails and phone number of contact persons to receive
consumer complaints should also be stated. The retail sale price as MRP must be printed. If the sale
price is less than the MRP, it could be displayed by a sticker in such a way that it does not conceal
the original MRP. These can be given in groups also in different places. All these must be displayed in
the principal display panel which is the total surface available for printing. The size and height of the
letters have also been stipulated. In case of food items, apart from the above, there should be a
“Best Before” date and the names and quantities of all the ingredients used must be listed.
As per the new amendment, from November 2012, nineteen products mostly from FMCG companies
will have to package and sell specific products in standard sizes only, as given in the second schedule
of the Legal Metrology (Packaged Commodities) Rules 2011. This standardization is important
because in its absence a consumer can make a poor choice based on wrong information.
This law is applicable for product categories in the FMCG sector including biscuits, soaps, detergents,
edible oils, coffee, tea and milk powder.
As per the rule, the smallest permissible pack size of tea and coffee is 25 gms, while it would be in
multiples of 100gms in the case of baby food packs. Standard pack size of biscuits would be in
multiples of 25gms up to 100gms.
Most of the FMCG companies have priced their low price product offerings (in the range of INR 2-
INR 5) in pack size as varied as 33g to 74g. Movement to the nearest standard pack size would
impact sales volume of these low priced packs.
20. FMCG Issues & Opportunities
Standard Pack Sizes for key product categories under the new norms
Segment Standard Sizes (gm)
Baby Foods Multiples of 100gm (upto 1KG), 2kg, 5kg, 10kg
Biscuits 25,50,75,100,150,200,250,300 and multiples of 100gm upto 1 kg
Coffee 25,50, 100, 200,250,500, 1kg and multiples of 1 kg
Tea 25,50, 100, 125, 250, 500, 1kg and multiples of 1 kg
Milk Powder <50, 50, 100, 200, 500, 1kg and multiples of 500gm
Mineral Water 100,150,200,250,300,500,750, 1Ltr, 1.5ltr, 2 ltr, 3 ltr, 4 ltr, 5 ltr
Edible Oils 50, 100, 200, 500,1kg, 2 kg, 3 kg, 5kg and in multiples of 5kg
Detergent Powder <50, 50, 100, 200, 500, 700, 1kg, 1.5kg, 2kg and multiples of 1kg
Laundry Soaps 50,75,100 and in multiples of 50gm
Toilet Soaps 25, 50,75,100, 125, 150 and in multiples of 50gm
Paints 50, 100, 200, 500, 1Ltr, 2 ltr, 3 ltr, 4 ltr, 5 ltr and in multiples of 5 ltr
Source : DNB Research
21. FMCG Issues & Opportunities
Industry Opportunities & Issues
22. FMCG Issues & Opportunities
Key Industry Opportunities
1. Rising consumption levels in rural markets is expected to drive demand for FMCG products-
The Indian market has a huge untapped rural market that is continuously offering
opportunities for growth in the FMCG sector. Rising income levels and efforts by marketers
to tap the consumer base at the bottom of the pyramid are paying off to create
opportunities in rural India.
Source: McKinsey Global Institute
While the growth in FMCG sector in India is poised to grow, the penetration rates in the
rural market are low as compared to urban areas. Products like shampoos, hair oil and
toothpastes have very high penetration in urban India (69%, 84% and 91%, respectively). On
the other hand, penetration rates in rural India for the same products is lower; 56%, 72%
and 63%, respectively, for shampoos, hair oil and toothpastes. The urban-rural penetration
gap is much pronounced for products like toilet cleaners (12% rural penetration versus 45%)
and glucose (10% versus 21%). This represents a huge opportunity for FMCG companies to
shift their revenue mix in favor of rural markets.
Low penetration rates, along with increasing personal disposable incomes of rural
consumers are leading to growing demand for quality and branded goods. The growing
influence of media is impacting on lifestyle and consumption patterns, leading to immense
market opportunities for FMCG companies.
Moreover, recently, the government has reiterated its focus on rural upliftment with the roll
out of several initiatives - Allocation of funds for irrigation, roads including, increase in
minimum support price (MSP) of key food crops such as paddy and pulses, employment
guarantee schemes. All this will drive rural income and will augur well for FMCG companies.
411
516
631
2010 2015 2020F
Annual per capita disposable income level in rural region (USD)
23. FMCG Issues & Opportunities
Source: IBEF Research
2. Opportunities in the health and wellness space- Growing concerns over lifestyle-related
health issues like obesity, diabetes, hypertension and chronic heart disease are pushing
consumers to make a shift in their food preferences. It has been witnessed in the recent
past, that, consumers have consciously made a preference shift towards healthy, fat-free
and no-sugar options in processed foods.
According to industry estimates, the diet-related food and beverages market in India is
witnessing double digit growth. This growing market for healthy and nutritious food is
proving to be an opportunity for several food and beverage manufacturers, which are
aligning their strategies in line with the changing consumer preferences. Several food and
beverage companies are responding to this trend through new product launches that have
the same taste but reduced levels of salts/ sugars. As per a recent PwC report, nutrition
foods, beverages and supplements comprise a USD 2.4 -2.5 billion market in India, growing
at a CAGR of 10 to 12%.
Source: PwC Research
9.0
10.4
11.9
13.2
14.8
2009 2010 2011 2012 2013
Rural FMCG Market (USD Bn)
24. FMCG Issues & Opportunities
However, a key learning for Indian market has been that health alone will not work, but will
need to be backed by the taste assurance adequately to see it through – e.g. Increased
stress on Taste in communication of health categories like Saffola Flavored Oats, B Natural
Juices, Multi Grain Attas etc.
3. Emerging personal care market- The personal care market has been growing rapidly due to
the increasing purchasing power and growing consumer interest. The demand for cosmetics
and personal grooming products has been on the rise due to the increasing popularity of
beauty contests, increasing disposable incomes coupled with the growth in the Indian
fashion industry. According to industry sources, the cosmetics market in India is growing at a
rate of 20% annually.
4. Rising personal hygiene market in India -The personal hygiene market in India is growing at
a fast pace. According to estimates, the Indian personal hygiene market is forecasted to
grow from USD 2.3 billion in 2013 to USD 3.7 billion in 2018, representing an increase of
60.3% since 2013.Soap is the largest segment of the personal hygiene market in India.
5. Positive outlook for food processing industry in India- The food processing industry in India
is expected to grow at a rapid pace with both domestic and foreign companies making
investments in this sector. As per the date released by DIPP, between 2000 and 2015, the
food processing industry witnessed cumulative FDI inflows of USD 6.3 billion, accounting for
2.49% of overall FDI inflows. According to industry estimates, the food processing industry
accounts for nearly 30% of total food market in India. The Indian food processing industry is
ranked fifth in terms of production, consumption, export and expected growth.
Furthermore, the total food production in India is estimated to double in the next 10 years.
Following factors are expected to fuel future growth of this industry-
a) Increasing spending on health and nutritional foods
b) Increasing number of nuclear families and working women
c) Changing lifestyle
d) Functional foods, fresh or processed foods
e) Organized retail and private label penetration
f) Changing demographics and rising disposable incomes
6. Premiumization continues to be a momentous trend for FMCG industry. The growth of
middle class and corresponding aspirations has contributed to the trend.
The shift of households from the deprived and aspirers category having income less than
USD 1,985 per annum to the seekers and strivers category having income between USD
4,413 and USD 22,065 per annum has and will continue to change the outlook for the
industry over the coming years The number of middle class households (earning between
USD 4,413 and USD 22,065 per annum) will increase more than fourfold to 148 million by
2030 from 32 million in 2010.
25. FMCG Issues & Opportunities
Source : McKinsey Global Institute
The middle income group conventionally has been the main growth driver with mass
products driving volume and value growth. The trend is changing and middle class
consumers are up-trading and premiumization is a visible trend among them. Growing
aspirations and need for self-indulgence is likely to keep the trend going. For the companies,
the imperative will be to tap into the aspirations and help the consumer find occasions and
reasons where they can spend on premium products. Premiumization could manifest itself
by way of:
Some of the above is reflected in the recent market-play:
Functional benefit or Ingredient story: Green Tea (already 5% of the total tea
market), Multigrain atta, Functional edible oil (20-25% of the overall market), Health
focused biscuits (15% of the total market)
Packaging : Paperboat (growing reach and value share in Juice Drinks segment)
Occasion & Ritual: Oreo Biscuits (led the premium indulgent biscuit growth for
Indian FMCG), CDM Silk etc.
7. Consumer Appetite for Innovations— New launches, innovation and product
augmentation are many of the few motivational factors for a FMCG company that has the
1% 3% 7%2%
6%
17%
12%
25%
29%
35%
40%
32%
50%
26%
15%
2008 2020 2030
All India Households by Income Bracket (2010, In USD and %)
Deprived (<1985)
Aspirers (1985-
4413)
Seekers (4413-
11032)
Strivers (11032 -
22065)
Globals (>22065)
26. FMCG Issues & Opportunities
potential to increase their profitability to a greater extent. As Indian customers are
becoming more global in their aspirations and desires, their appetite to consume products
is also increasing. Robust demand for existing FMCG products are encouraging more FMCG
players to extend their existing brand and expand their product portfolio as well, bolstering
the Indian FMCG space. Some of the recent innovations in the Indian FMCG have been:
Flavored Oats, Paperboat Packaging Innovation, Sensodyne etc.
8. Technology as a Game Changer— Increased and relevant functionality coupled with lower
costs will enable technology deployment to drive significant benefits and allow companies
to address the complex business environment. This will be seen both in terms of
efficiencies in the back-end processes (e.g. supply chain, sales) as well as the front-end (e.g.
consumer marketing).
9. Favorable Policy Framework— The recent policy announcements have been favorable and
are likely to have a positive impact on the industry if implemented strongly. The roll out of
GST in April 16 is expected to streamline the taxation structures, and reduce the cascading
effect on costs of goods and services marketed. Increased allocation to Rural
Infrastructure Development Board indicates the commitment on improving rural
infrastructure and credit-ability. The proposed creation of unified markets for farmers is
expected to yield better prices and thus increased income
Key Industry Issues
1. Intense competition - The Indian FMCG companies face intense competition from the
players in the organized and the unorganized sector. In the organized sector, the FMCG
companies face severe competition from MNCs and Indian Companies such as HUL, P&G,
Nestle India Ltd, Dabur, ITC, Marico, Ruchi soya, etc. Further, aggressive price wars and
increasing advertisement and promotional activity also heighten competition.
27. FMCG Issues & Opportunities
In the unorganized sector, the FMCG companies face competition from local companies
which benefit on account of local presence, exemption/ lower rates of excise duty, sales tax,
and lower overheads due to limited geography, family management, focused product lines
and minimal expenditure on marketing.
2. Increasing abundance of counterfeit goods- Trade of counterfeits and pass-offs products is a
serious concern for the companies in the FMCG sector. The top brands within any category
be it cosmetics, detergents or soaps are affected the most by counterfeiting and pass-offs.
Besides revenue losses, counterfeits and pass-offs also affect the company's brand as they
may be unsafe. Low quality counterfeits reduce consumer confidence in branded products.
Counterfeits not only deprive revenues for the company but also weaken its brand image.
Moreover, counterfeit goods also cause a loss to government exchequer. According to
industry sources, the estimated annual tax loss to the Indian government due to
counterfeiting in 2012 is USD 4.2 billion and is expected to rise further in the future time
period.
3. Increasing consumer awareness & underlying behavior changes – The Indian consumer is
fast undergoing change spanning all FMCG categories with implications for the
manufacturers. Let us look at F&B first- with the wave of health and wellness, awareness
and thus concerns of lifestyle diseases are on the rise. While they give life to new sectors like
that of functional foods and supplements, they impact other existing categories like salty
snacks, carbonated drinks, etc. It is important for F&B segment to acknowledge and respond
to change quickly before the consumer has made the next choice. That is why the category is
globally moving to natural sweeteners like Stevia leaf, launch of Diet beverages and snacks
etc. The same is yet to come to India with as much aplomb but the journey has begun.
Another case of consumer behavior change is visible in the Indian cosmetic surgery industry.
It is witnessing significant growth, driven by increasing consumer awareness, direct
marketing and advertising campaigns, and technological advances in surgical and non-
surgical procedures. With the introduction of new technologies, the results from hair and
skin treatments are not only instant, but they are also long lasting. As a result, increasing
number of beauty conscious consumers are using new technologies such as advanced
dermatology, cosmetic surgery, hair transplants and other treatments to enhance their
beauty. According to industry estimates, the cosmetic surgery market in India is growing at
40% per annum. This could reduce dependence on traditional beauty aids, which could lead
to a fall in demand for the skin and hair care products of FMCG companies.
Taking example of Tobacco, the demand for tobacco products has witnessed a decline due
to growing awareness on health issues related to tobacco use. Also, the advertising and
promotions about the negative attributes of tobacco, especially cigarettes has led to a build-
up of negative perception against smoking, culminating to an increase in regulations in the
country banning public smoking. Increased health consciousness and introduction of
substitutes such as nicotine-replacement patches and chewing gum are likely to reduce
demand for ITC's tobacco products which could affect its revenue growth.
4. Consumer Health and Safety Issues—Catering to large market such as India comes with its
own set of responsibilities, one of the important one includes having to ensure Consumer
28. FMCG Issues & Opportunities
Health and Safety. This is especially critical for F&B and Personal care segment which have
been under high public and regulatory scrutiny recently, e.g. instant noodles, baby
shampoos, carbonated drinks, RTE foods etc. The growing noises around high sugar, fat
content, inclusion of material like Lead, MSG, pesticides etc. means the manufacturer has to
not only ensure the products meet regulatory norms but also ensure a) Communication of
the same to consumer by way of ‘Above the line activities’ as well as packaging labels b)
Monitoring the Quality of the products outside of company warehouses until they reach the
consumer to provision for safety standards compliance.
5. Stringent Tax regime – Issues for FMCG are exacerbated by the complicated tax structure.
There is a VAT which is to be levied at state level, there are other state taxes such as octroi
and entry taxes and then centre levies excise duties and service tax. As a result, no product
cost is exactly the same from one state to the next. Add to this, lack of uniformity across
states and the prices go further up for manufacturers stressing their margins and consumer
access. This is indirectly passed on to consumers who are then to pay extra money for the
same product. The other aspect of consistent and long-lasting taxation policies also needs to
be ensured. Creation of tax heavens to push investments and then withdrawing the same
like in the case of J&K a few years back will only hurt business sentiments.
Introduction of GST is expected to streamline the process but one still needs to understand
the applicability and implementation of the same to see a difference.
Let us specifically take the case of Cigarettes. The industry in India continues to operate in an
environment of rapidly escalating challenges in the areas of taxation and regulations. The
industry has been facing tax hikes in progressive budgets. This has been a major issue for
FMCG major, ITC, which derives more than 70% of its revenues from the cigarettes business.
In the union budget of 2015, the excise duty on cigarettes has been increased by 25% for
cigarettes of length not exceeding 65mm and by 15% for cigarettes of other lengths. The
higher tax rates over the years has increased cigarettes prices and resulted in a decline in
cigarette consumption in India from 23% in 1971 to 15% in 2009. In 2012, some states
charged high rates of VAT on tobacco products, such as Uttar Pradesh (50%), Rajasthan
(50%), Gujarat (25%), Odisha (25%) and Jammu and Kashmir (30%).
6. Apprehension on slowdown in rural market – While rural growth has been faster than
urban growth, the pace of growth in the former has fallen to 8 per cent from 9-15 per cent
over the past few quarters on the back of rural distress and uncertain monsoons. Farmer
suicides and uncertainty about monsoon are factors which could dampen demand from rural
markets which had seen sustained FMCG demand in the past.
7. Managing Supply Chain Constraints–The Indian FMCG sector has to work with very complex
distribution system comprising multiple layers of numerous small retailers between
company and end customer. For example a company like, Marico has to ensure reach to 1.6
million retailers spread throughout the country. While in developed countries, larger packs
are pushed, which bring down packaging and supply costs for the business and in turn
passed onto consumers as value. However, for a developing country like India, there is a
thrust to push smaller packs to drive penetration. This increases supply chain costs for the
business which cannot be completely passed onto the consumers for the want of driving
29. FMCG Issues & Opportunities
access and affordability. This also puts pressure on execution – as sustaining so many packs
for different categories and brands on the limited shelf space also pushes up the cost for
corporates.
8. Lack of Infrastructure— From the lack of basic economy infrastructure like physical and
telecom connectivity to the more immediate ones like non-availability of cold-chains and
power to sustain cold-chains imply the companies have to make significant trend
investments, which drive up the costs in addition to prevailing high inflationary pressures.
9. Regulatory Issues — These broadly arise on account of lack of standardized procedures and
bureaucratic hurdles that make the workings complex and delayed. For e.g.
a) On transportation, delays on account on state borders. It is common for 2-3 days
inventories to be stuck at borders due to a requirement of multiplicity of permits and
licenses.
b) The Indian labor law has not been updated and may lack a note of modern methods of
production and strategies
c) Licensing has been a delayed and long process. However, with the launch of ‘Make in
India initiative’, it is likely to improve.
d) State level reservations on jobs limits the talent hire
e) Export procedures are lengthy and cumbersome, which affects business conversion for
FMCG players, specially MSMEs
10. Environment issues— Catering to such a large market comes with its set of responsibilities,
including availability of raw material, use of environmentally friendly packaging material and
responsible marketing. A few pertinent issues here will include:
a) Storage and visibility material:There is a lot of emphasis placed on climate change and
resource depletion; the FMCG industry is now facing sustainability demands from
legislators, consumers and other stakeholders, primarily around recycling and reusing
packaging material, and also the use of alternative sustainable material. Not only
primary packaging but also storage infrastructure like Coolers for beverages, known for
harmful CO2 emissions.
b) Sustained supply of raw material: With high reliance on monsoons and agricultural
inputs, disruption in agricultural patterns and yields are significant potential business
risks. Lack of adequate and round the season supply of raw material can hurt businesses
especially for categories based on fruits and vegetables like Chips, Juices etc.
c) Responsible marketing: For long profitability and corporate social responsibility were
seen to be exclusive, however the perception is fast changing. Companies can no longer
work in isolation, the impact of their activities on environment and how they work
towards repaying what they take from the environment are both under surveillance. The
companies which are known to work with and for the environment command better
respect and loyalty, which ultimately add to depth in consumption and profits. Some of
the more talked about community initiatives include PepsiCo Water Conservation, ITC e-
Choupals, HUL’s Buy back guarantee for farmers to ensure Sustainable Raw Material
Supply etc.
31. FMCG Issues & Opportunities
The outlook for Indian FMCG industry looks moderate amid higher income levels and the expansion
of the model retail format. FMCG sector has a great opportunity for growth in the country, with the
rising disposable incomes, increasing rural consumption, the growing population, education,
urbanization, rising modern retail, and a consumption-driven society.
Off late, the FMCG companies are reporting strong volume led growth in their key categories like
foods, health supplements, digestives, toothpastes, skin care & home care due to positive economic
environment, low inflation and development initiatives led by Modi-led government which have
been instrumental in the uptick of the FMCG sector.
The rural demand which is expected to witness a rise given the favorable announcements in union
budget 2015 around allocation of funds for irrigation, roads, sops including rural development
schemes like MNREGA may suffer a minor setback on account of unseasonal rains and growing farm
distress in the form of farmer suicides. Nevertheless, robust business model and firms ability to
efficiently manage the external challenges will help to stage strong performance even in the face of
intensifying competitive pressures.
32. FMCG Issues & Opportunities
About ASSOCHAM
THE KNOWLEDGE ARCHITECT OF CORPORATE INDIA
Evolution of Value Creator
ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. Having in its fold more than
400 Chambers and Trade Associations, and serving more than 4,00,000 members from all over India. It has
witnessed upswings as well as upheavals of Indian Economy, and contributed significantly by playing a catalytic
role in s haping up the Trade, Commerce and Industrial environment of the country. Today, ASSOCHAM has
emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of
growth and development in the technology driven cyber age of ‘Knowledge Based Economy’. ASSOCHAM is
seen as a forceful, proactive, forward looking institution equipping itself to meet the aspirations of corporate
India in the new world of business.
ASSOCHAM is working towards creating a conducive environment of India business to compete globally.
ASSOCHAM derives its strength from its Promoter Chambers and other Industry/Regional
Chambers/Associations spread all over the country.
VISION
Empower Indian enterprise by inculcating knowledge that will be the catalys t of growth in the barrier less
technology driven global market and help them upscale, align and emerge as formidable player in respective
business segments.
MISSION
As a representative organ of Corporate India, ASSOCHAM articulates the genuine, legitimate needs and
interests of its members. Its mission is to impact the policy and legislative environment so as to foster
balanced economic, industrial and social development. We believe education, IT, BT, Health, Corporate Social
responsibility and environment to be the critical success factors.
MEMBERS – OUR STRENGTH
ASSOCHAM represents the interests of more than 4,00,000 direct and indirect members across the country.
Through its heterogeneous membership, ASSOCHAM combines the entrepreneurial spirit and bus iness
acumen of owners with management skills and expertise of professionals to set itself apart as a Chamber with
a difference. Currently, ASSOCHAM has more than 100 National Councils covering the entire gamut of
economic activities in India. It has been especially acknowledged as a significant voice of Indian industry in the
field of Corporate Social Responsibility, Environment & Safety, HR & Labour Affairs, Corporate Governance,
Information Technology, Biotechnology, Telecom, Banking & Finance, Company Law, Corporate Finance,
Economic and International Affairs, Mergers & Acquisitions, Tourism, Civil Aviation, Infrastructure, Energy &
Power, Education, Legal Reforms, Real Estate and Rural Development, Competency Building & Skill
Development to mention a few.
INSIGHT INTO ‘NEW BUSINESS MODELS’
ASSOCHAM has been a significant contributory factor in the emergence of new-age Indian Corporate,
characterized by a new mindset and global ambition for dominating the international business. The Chamber
has add ressed itself to the key areas like India as Investment Destination, Achieving International
Competitiveness, Promoting International Trade, Corporate Strategies for Enhancing Stakeholders Value,
Government Policies in sustaining India’s Development, Infrastructure Development for enhancing India’s
Competitiveness, Building Indian MNCs, Role of Financial Sector the Catalyst for India’s Transformation.
ASSOCHAM derives its strengths from the following Promoter Chambers: Bombay Chamber of Commerce &
Industry , Mumbai; Cochin Chambers of Commerce & Industry, Cochin: Indian Merchant’s Chamber, Mumbai;
The Madras Chamber of Commerce and Industry, Chennai; PHD Chamber of Commerce and Industry, New
Delhi and has over 4 Lakh Direct / Indirect members. Together, we can make a significant difference to the
burden that our nation carries and bring in a bright, new tomorrow for our nation.
33. FMCG Issues & Opportunities
ASSOCHAM Corporate Office
5, Sardar Patel Marg, Chanakyapuri, New Delhi - 110 021
Phone: +91-11-46550555 (Hunting Line) • Fax: +91-11-23017008, 23017009
E-mail: assocham@nic.in • Website: www.assocham.org
ASSOCHAM Southern Regional Office
D-13, D-14, D Block, Brigade MM,
1st Floor, 7th Block, Jayanagar,
K R Road, Bangalore-560070
Phone: 080-40943251-53
Fax: 080-41256629
Email:events@assocham.com
events.south@assocham.com,
director.south@assocham.com
ASSOCHAM Eastern Regional Office
F-4, “Maurya Centre” 48, Gariahat Road
Kolkata-700019
Tel: 91-33-4005 3845/41
HP: 91-98300 52478
Fax: 91-33-4000 1149
E-mail: Debmalya.banerjee@assocham.com
ASSOCHAM Western Regional Office
608, 6th Floor, SAKAR III
Opposite Old High Court, Income Tax
Ahmedabad-380 014 (Gujarat)
Tel: +91-79-2754 1728/ 29, 2754 1867
Fax: +91-79-30006352
E-mail: assocham.ahd1@assocham.com
assocham.ahd2@assocham.com
ASSOCHAM Regional Office Ranchi
503/D, Mandir Marg-C,
Ashok Nagar,
Ranchi-834 002
Phone: 09835040255
E-mail: Head.RORanchi@assocham.com
AUSTRALIA
Chief Representative
ASSOCHAM Australia Chapter
Suite 4, 168A Burwood Road
Burwood | NSW | 2134 | Australia
Tel: +61 (0) 421 590 791
Email: yateen@assochamaustralia.org
Website: www.assochamaustralia.org
UAE
Chief Representative
ASSOCHAM – Middle East
India Trade & Exhibition Centre
M.E. IBPC-SHARJAH
IBPC-SHARJAH
P.O. Box 66301, SHARJAH
Tel: 00-97150-6268801
Fax: 00-9716-5304403
JAPAN
Chief Representative
ASSOCHAM Japan Chapter
Colors of India Center
1-39-3 Ojima Koto-Ku,
Tokyo 136-0072
Japan
Email: international@assocham.com
tceindo@hotmail.com
USA
Chief Representative
ASSOCHAM – USA Chapter
55 EAST 77th Street
Suite No 509
New York 10162