fmcg sector report 3

8/3/2019 FMCG Sector Report 3

http://slidepdf.com/reader/full/fmcg-sector-report-3 1/6

FMCG Sector

1

© 2011, BizVantage Confidential



2 © 2011, BizVantage Confidential

Indian FMCG sector size poised to reach US$ 47 bn by

2013 and US$ 74 bn by 2018, growing annually at 10-12%

By 2025, total consumption is likely to quadruple

making India the 5th largest consumer market.

Organized retail is expected to grow by 14-18% by 2015

thereby boosting FMCG growth.

India: An Emerging Consumer Market

Indian rural market currently worth US$ 9 bn is

expected to become a US$ 100 bn opportunity by 2025.

25

43

74

2008 2013E 2018E

Marketsize – US$ Bn

Source: Economic survey 2009-10, IBEF report




Industry Overview

Indian FMCG industry worth ~ US$ 29 bn roughly constitutes 2.2% of India’s GDP.

Within the FMCG sector, Food products is the largest consumption category.

Strategic focus on rural marketing, innovations, niche consumer segments, exports,

life style products to further the current 10% annual sector growth.

2% 12%

43%8%

4%

4%

5%

22%

Baby care Fabric care

Food products Hair care

Household OTC products

Others Personal care

Key Players

Company Sales* (US$ Mn) Segments

HUL 3921.5Personal care, Food products, Household, Baby

care, Fabric care

Amul India 1771.1 Food and beverage products

Nestle India 1155.4 Food and beverage products

ITC ** 805.7 Personal care, Food products

Britannia 759.9 Food products

Dabur 635.9 Personal care, Food products, Household

Marico Industries 449.3 Personal care, Household, Food products

GSK Consumer 447.9 Food products, Personal care

Cadbury India 430.1 Food products

Colgate Palmolive 391.8 Personal care, Oral care

Procter & Gamble 388.5 Personal care, Household , Baby care, Fabric care

Godrej (GPCL) 280.5 Personal care, Fabric care

Key Categories

Source: Relevant company websites, IBEF report

*Yearly sales as of March 2010, ** FMCG business excluding tobacco




Key Trends: Increasing industry horizons, innovation

emergence of life style products and focus on rural consumers

ConsolidationIndian FMCG companies are either increasing their focus on certain segments or

are consolidating their existing business portfolios.

Eg. Dabur India merged its wholly owned subsidiary Dabur Foods with itself.

Product Innovation

Rural Marketing

Lifestyle products

Expanding horizons

Several companies have taken to innovation by launching or customising their

existing product portfolios for new consumer segments.

Eg. Emami launched men’s fairness cream, Nestle/Amul launched probiotic

products by providing active ingredients in regular offerings, GSK launched foodles.

Lifestyle and premium range products are the next target product segment among

Indian FMCG players.

Eg. P&G launched Olay range of products, HUL launched Aviance.

Several Indian companies are exploring the business potential of overseas markets

and under-penetrated regional markets

Eg. Tata Tea acquired 30% stake in Energy Brands Inc (US based specialty watercompany), Marico is marketing beauty soaps in several African markets

Rural markets account for almost 30% of the consumption pie. Companies are

devising exclusive marketing strategies gain rural foothold.

Eg. ITC’s e-choupal initiative, GSK launched Asha (low cost variant of Horlicks),

Britannia launched Tiger Iron Zor, Nestle launched Maggi Rasile

Source: IBEF report, ICMR, D&B Economy outlook, Unitedworld live content engine




Lifestyle & Premium products

Fast evolving lifestyles, rapid urbanization andincreasing disposable incomes there exists anopportunity for high-end products.

Rural Market – New growth frontier

With more than 33% of Indian consumer basepresent in rural markets, it will be a key growthdriver for domestic business.

Innovation

Indian consumers being highly receptive to newproducts demonstrates an opportunity to offernew products targeting specific segments.

Geographical Expansion

Fast growing emerging markets as well asculturally compatible markets offer a newdimension to further growth.

Growth drivers, Challenges and Opportunities

Opportunities Growth drivers

Challenges

Increasing disposable income

Growth in organized retail

High consumer confidence

Well established distribution network

Consumer receptiveness to innovation Rapid urbanization and changing lifestyles

Diverse consumer preferences Increasing competition

Rising logistics, procurement costs

Ability to win rural consumers

Source: IBEF report, D&B Economy outlook,




Strategic Imperatives

1 Foray and win in rural markets

2

3

4

5

6

7

The road ahead…

Build and expand product portfolio

Unleash the power of innovation

Deliver on environmental sustainability commitments

Enhance customer service

8 3rd Party manufacturing

9 Human resource development

Diversify across geographies/categories/products

Manage costs across supply chain

Source: IBEF report, BizVantage analysis

fmcg sector report 3

Documents