FMCG

REPORT ON FMCG INDUSTRY
Submitted By-
Ankita Sadani
FMCG INDUSTRY
Fast moving consumer goods (FMCG) are the 4th largest sector in the Indian
economy. There are three main segments in the sector – food and beverages which
accounts for 19 per cent of the sector, healthcare which accounts for 31 per cent
and household and personal care which accounts for the remaining 50 per cent.
The FMCG sector has grown from US$ 31.6 billion in 2011 to US$ 52.75 billion
in 2017-18. The sector is further expected to grow at a Compound Annual Growth
Rate (CAGR) of 27.86 per cent to reach US$ 103.7 billion by 2020. The sector is
projected to grow 11-12 per cent in 2019.^ It witnessed growth of 16.5 per cent
in value terms between June–September 2018; supported by moderate inflation,
increase in private consumption and rural income. It is forecasted to grow at 12-
13 per cent between April– June 2019.^ FMCG’s urban segment is expected to
have a steady revenue growth at 8 per cent in FY19 and the rural segment is
forecasted to contribute 15-16 per cent of total income in FY19.* Post GST and
demonetisation, modern trade share grew to 10 per cent of the overall FMCG
revenue, as of August 2018.
Accounting for a revenue share of around 45 per cent, rural segment is a large
contributor to the overall revenue generated by the FMCG sector in India.
Demand for quality goods and services have been going up in rural areas of India,
on the back of improved distribution channels of manufacturing and FMCG
companies. Urban segment accounted for a revenue share of 55 per cent in the
overall revenues recorded by FMCG sector in India.
FMCG Companies are looking to invest in energy efficient plants to benefit the
society and lower costs in the long term. Patanjali will spend US$ 743.72 million
in various food parks in Maharashtra, Madhya Pradesh, Assam, Andhra Pradesh
and Uttar Pradesh. Dabur is planning to invest Rs 250-300 crore (US$ 38.79-
46.55 million) in FY19 for capacity expansion and is also looking for acquisitions
in the domestic market. Tata’s are also planning to expand its home and personal
care products in FMCG sector. Investment intentions, related to FMCG sector,
arising from paper pulp, sugar, fermentation, food processing, vegetable oils and
vanaspathi, soaps, cosmetics and toiletries industries, worth Rs 916.13 billion
(US$ 15.55 billion) were implemented between January–December 2018.
Growing awareness, easier access, and changing lifestyles are the key growth
drivers for the consumer market. The focus on agriculture, MSMEs, education,
healthcare, infrastructure and tax rebate under the Union Budget 2019-20 is
expected to directly impact the FMCG sector. These initiatives are expected to
increase the disposable income in the hands of the common people, especially in
the rural area, which will be beneficial for the sector.
PESTEL ANALYSIS
Political
India was initially a closed economy, there were numerous restrictions and laws
imposed for foreign companies in order to carry out business there, the reason is
the mistrust because British also came as traders and then occupied whole of
India, making them slaves for more than a century. Also there are extremists who
are in opposition to FDIs; this is how they shut down Wal-Mart. But as the time
passed, government realized that they have slowed down growth by imposing
such restriction so they started opening up. Since these rms have huge reserves
they also force governments to pass laws in their favour against promise of
financial back up. Large MNCs are found to have blackmailed their way through
many governmental charges and penalties.
Economic
The lifting of trade restrictions and import duties actually provided customers
with greater number of products to choose from and enhanced competition which
led to lower prices, hence decrease in inflation and improvement in quality of
products provided to gain greater market share this also helped in pushing up
productivity and thus increase in exports. Domestic market was protected through
tariffs as all the import duties were not lifted; it was lifted from items where
market was already established, however where market was still developing
duties were still levied upon. This will also enable foreign companies present in
India to import stuff from abroad and sell it in India and make more efficient use
of their extensive distribution network on the other hand it also provides
opportunities to local suppliers and distributors to over their services to
companies who do not exist in India but want to sell their products here. Now that
companies could import from anywhere, there will be more options for them to
look for suppliers in the world and source the best amongst them in terms of price
and quality.
Social
The social implication of advent and progress of FMCG industry is positive as
people’s life style will improve. All FMCG products are more hygienic and
healthy than lose products offered on streets and this definitely means low
mortality ratio in future as more and more people will start consuming these
packaged goods. Apart from this, it is the fourth biggest sector in India which
contributes about 2.5% to GDP and creates employment for thousands of young
graduates each year. This sector is dominated by MNCs and these companies
invest millions of dollars each year to improve the living conditions of poor in
India, for example Hindustan Unilever Limited started a “Project Shakti” in rural
areas of India in order to empower women there to earn some money for
themselves and for their families. In developing countries like India not all the
poverty eradication, education and other developments projects can be taken by
government. So any initiative by these firms is a huge help.
Technological
The technology part comes easy to this sector as the manufacturing setup required
for these kinds of products is not as high tech as other industries plus it can be
outsourced through a third party contract which is very common in this industry.
Initial setup cost is a little high that’s why not all the starters can think of entering
in this market plus it is owned by giants like Unilever and P&G who make it
difficult for other companies to survive through their strategic moves. The
distribution setup is difficult to establish with reliable links and this is where new
entrants fail most. They make the product but cannot make it available to all the
markets at the same time.
Environment
These FMCG manufacture products from raw materials that are grown in the
fields and are result of agricultural activities in the region, therefore they are
careful in protecting and preserving the environment. Some of the efforts include
setting up of green houses, use of herbal waste, supporting rag pickers,
establishing green buildings and procedures that are green, minimize
consumption of clean and fresh water. The constraint on energy is reduced by
using alternative sources of energy like herbal waste(Gulati, 2015). Government
also has made some anti-dumping laws which prohibits manufacturing facilities
to contaminate any clean source of water flow.
Legal / Law
Government replaced various indirect taxes imposed on FMCG with a more
direct approach, i.e. GST. This will help in lowering prices as all the taxes
imposed increase the cost of production and producer passes it on to consumer.
They cannot underpay agricultural sector for profit maximization, also they
cannot fool customers in any way by claiming something for their product which
it is incapable of doing in actual. The law also forbids FMCG industry to
artificially increase prices by making a product scarce. The law for marketing
products states that one company cannot mock product of another company by
explicitly taking its name or showing its picture. But the most important law that
authorities miss is consumer privacy protection rights. These firms tend to find
out contact details of their consumers and potential ones and then spam them
through every channel.
GLOBAL TOP TRENDS
Understanding future market trends is essential for FMCG businesses to make

critical, near-future decisions when it comes to new-market penetration, market
expansion and product development. Only when upcoming market trends are
appreciated can revenue-focused strategies be developed.
Here are major trends expected to influence FMCG markets in 2019 and beyond:
1. Growth of E-Commerce
By 2020, e-commerce revenues are expected to be more than USD 4 trillion.
More digitally savvy consumers will spend more time online. Messaging apps
will also be increasingly used within the context of sales and marketing.
E-commerce is growing four-times faster than offline sales, with global online
sales predicted to double within the next five years. By 2022, FMCG e-
commerce is forecast to make up around ten to twelve percent of global FMCG
sales, creating a USD 400 billion opportunity.
As e-commerce penetrates FMCG, competition intensifies, and the importance
of clicks and bricks means that FMCG businesses will need to adopt an
omnichannel approach.
2. Consumer Demand product convenience

With more consumers leading an on-the-go lifestyle, the demand for
convenience is a big trend in 2019. A greater appetite for convenience food and
drinks that are ready-to-consume and a desire for restaurant-quality foods at
home will drive growth in this sector.
Much of the expectation for quality and convenience is due to the rising culture
of delivery apps. Consumers are increasingly demanding flexibility in how,
when and where to shop for their FMCG products, with a no-compromise
approach to convenience. The trend is for consumers to do smaller, more
frequent purchases with a growing demand for fresh convenience foods to fit
this lifestyle dynamic.
3. Greater focus on healthier products

The existing trend for ‘clean’ foods continues, inspired by greater awareness,
interest and understanding of wellbeing. There will be a greater emphasis on
health and wellness products, many of which combine research on nutrition and
longevity with traditional, ancient therapies.
Sales of snack food in Asia-Pacific soared in 2017 and 2018. Snackers are
looking for ‘clean’ food snacks and are more mindful of what they are eating.
4. Greater disposable income and more consumer in Asia
GDP increases and disposable income hikes will undoubtedly impact FMCG
markets in 2019. Emerging economies, in countries such as Vietnam and
Indonesia, and countries with a growing middle-class, such as Thailand, are
resulting in more consumers, with more cash to spend. Findings from the
Organization for Economic Cooperation and Development (OECD) suggest this
will lead to a billion new consumers by 2020 spending between USD 10-100
per day.
Countries such as Thailand, Vietnam and the Philippines are experiencing a

rapid explosion of consumers with more disposable income than ever before.
By 2030, estimates are that over two-thirds of the world’s middle-classes will
live in Asia.
In Vietnam, one of the fastest-growing FMCG markets, household wages have

increased by close to 40 percent since 2012, with GDP rising fast. FMCG in
emerging markets is growing two to four times more than in developed markets.
5. Millennials to become big FMCG influencers

Millennial consumers are seeking out new brands that they perceive as
innovative product lines and have their own distinct FMCG demands. They
prefer to research products by sharing information with their peers online and
are much more influenced by peers than a mass-brand channel approach.
Not only do these under-35s have their own distinct identity, they have the funds
too. Along with the popularity of e-commerce amongst millennials, there will
be increased scope for smaller brands and digital challenger brands in 2019 that
resonate with millennial consumers online.
6. Newer sustainability consumer mindset

Sustainability is set to take a more central role within FMCG in 2019 and
beyond. Consumers are becoming more aware and interested in how
sustainability relates to products across the whole supply chain, from the
sourcing of ingredients to the packaging.
Consumers are influenced by green, environmental factors as well as the concept
of responsibility and accountability. Air pollution, along with the health of the
land and agricultural regeneration will also be in the spotlight.
7. Demand driven by population density

The world is growing up, and whilst the millennials are exerting their influence,
the population landscape is being dominated by post-retirement FMCG
shoppers. This is particularly evident in Asia, where e.g. Japan tops the tables
with predictions that the over-60s will account for 37.3 percent of the population
by 2030. Other rapidly aging populations include Vietnam, Thailand and Sri
Lanka.
The UN forecasts that on a global scale, the next couple of decades will see the
number of over-65s double to around the billion mark. For FMCG, this rising
tide of silver consumers could be a golden opportunity.
8. Blockchain-based supply chains
The blockchain in the food and beverage industry is becoming increasingly

important as a key technology in supply chain management. Last year, for
example, French retailer Carrefour made headlines by pioneering food tracking
with a new block chain to increase food safety. On the subject of blockchain in
general, we recommend our blog "How to understand the blockchain in 7
minutes".
9. Hyperlocal supply chains
The transport of fruit and vegetables not only causes unnecessary kilometers,
but can also reduce the nutritional value. In combination with consumers' desire
to see where their food really comes from, more and more hyperlocal supply
chains are emerging. Hyperlocal refers to food prepared or grown in the region,
such as restaurant gardens. Black Swan Restaurant in Yorkshire, for example,
was named the "best rated restaurant in the world" in 2017. On around two and
a half hectares of land, almost all the fruit and vegetables in the restaurant are
grown locally or in the nearby parents' farm.
10. Technologies for Sugar Reduction
R&D companies are increasingly using new technologies to reduce the amount
of sugar in their products and meet consumer demand for healthier foods. In
addition to changing their product range, major food companies are taking
advantage of advances in biotechnology and new sweeteners.
11.Increasing trend towards private labels
Retailers are investing more and more in their own brands to increase margins
and customer loyalty. Private labels are one of the dominant trends in Fast
Moving Consumer Goods and are a growing threat to traditional CPG brands. In
response, the CPG industry is witnessing an increasing trend towards direct-to-
consumer (D2C) models, with manufacturers directly managing their end
customer interactions through their own online and offline distribution channels.
12.Anti-Brand Brands
In addition, CPG companies are threatened by a new type of company that gives
more priority to products than marketing and promotes itself as an anti-brand
brand. The start-up Brandless, for example, offers a range of practical organic
products for three dollars and has been very successful with this business idea
since its launch in July 2017.
13.Niche markets gain in importance
The paradigm shift away from mass consumption towards increasingly

individual consumption and differentiated offerings (sustainability,
environmental compatibility, physiology, etc.) is creating numerous niche
markets. Although the underlying Food & Beverage trends are not always
associated with strong growth and high profits, they should not be ignored with
a focus on credibility and sympathy.
14.Transparency and sustainability
Consumers have become more critical and have an increased need for
transparency regarding the origin of ingredients and manufacturing processes.
This need for reinsurance is reflected in high expectations of natural products as
well as ethical and ecological demands on production, animal husbandry,
distribution channels and packaging. The pressure on manufacturers to publish
"complete and honest" product information is therefore increasing. Surveys by
Mintel and Nielsen show, however, that in the future consumers will also be
more willing to pay more for demonstrably sustainable clean label products.
15.Wellness oriented branding
Food brands are increasingly using wellness trends to highlight transparency,

natural ingredients and the health benefits of products. This is also reflected in a
trend to acquire "healthier" product lines.
16.Trend towards alcohol poverty and non-alcoholic beverages
The responsible consumption of alcohol is developing into a new lifestyle. In

Austria, 40 percent of beer consumers state that they drink more non-alcoholic
beer than in the past. In the UK, the consumption of non-alcoholic or low-
alcohol beer has even increased by 57 percent over the last two years. Heineken,
Adnams and Guinness are just a few of the beverage giants that responded to
this trend last year with new types of beer.
17.Cannabis drinks
A growing trend on the international market is drinks with legalized cannabis

varieties. The so-called CBD drinks do not contain enough THC to have an
intoxicating effect, but according to the manufacturers they have a multitude of
positive effects on health. "Happy Hippie Kombucha", for example, is a
sparkling tea enriched with healthy enzymes and hemp oil. Beer producers have
also jumped on this bandwagon. Sales of cannabis drinks reached USD 35.6
million last year. If the upward trend continues, cannabis could remain an
important trend in 2019.
18.Beauty enhancing foods
Foods and dietary supplements that promise beauty benefits are increasing. As
consumer demand increases, more food brands and retailers are expected to
enter the beauty sector.
19. Fermented food
Intestinal health has established itself as an important trend for the coming year.
This can also be seen in the purchase of Kombucha manufacturer Organic &
Raw Trading Co by the Coca-Cola Company. The more scientific evidence in
favor of stomach-friendly foods emerges, the more probiotics such as kimchi,
miso, kefir and Kombucha become commonplace on our food shelves.
20. Plant-based food and beverages
The market for plant-based food and beverages is still on the upswing. Last
year, milk sales on a plant-based basis rose by 3.1 percent, while cow milk sales
fell by 5 percent and will fall by a further 11 percent by 2020. This is
accompanied by the trend towards "Alternatives to All", i.e. more and more
ingredients are being replaced by other suitable ones. "The Good Seed Kefir"
Soda, for example, uses local vegetable ingredients and is bottled manually in
Melbourne. It contains Chrysanthemum variant, is sweetened with honey and is
produced according to the principles of Traditional Chinese Medicine.
21. Vegetable protein
Companies are increasingly looking at plant protein as a substitute for animal

protein. At the beginning of 2019, the "Just" start-up was the first plant protein
company to go public. Meat from the laboratory will be available in selected
restaurants this year. The trend is expected to be extended to new products such
as vitamins, coffee and milk.
22. Snacking culture with quality standards
Due to the increasing flexibility of the world of work, the topic of "snacking" is
also becoming increasingly important. According to Innova, 63 percent of
millenials state that they replace meals with snacks. Here, too, the trend is
towards organic, high-quality and sustainable products.
Along with shifting demographics, small towns and mid-density cities will
emerge, creating new FMCG markets. Population densities will create more rural
cities with an increasing urbanization of these inhabitants, many of which have
the same access to technology and the same consumer behaviors as their urban
counterparts. These new frontiers on the FMCG horizon will witness new trade
centers and improved infrastructure.
Undoubtedly, 2019 will be a year of huge change in the broad as well as the macro
FMCG markets. Those businesses who understand these new and divergent
pathways have a far better opportunity to navigate them successfully
TOP TRENDS IN INDIA
The Indian and Multinational FMCG players are leveraging India as a strategic
sourcing hub for cost-effective product development and manufacturing to
accommodate the international markets. With the rise in the disposable income
consumers in recent times have shifted their purchasing from essential to
premium products. In response to this, the firms have started enhancing its
premium portfolio.
According to a survey conducted, the FMCG sector will reach new heights of
USD 103.7 billion by 2020. This value clearly states that, there is a lot of scope
in the FMCG sector for well-known as well as emerging businesses and brands.
In the next ten years, the revenue of the FMCG (Fast Moving Consumer Goods)
market is set to grow at a higher rate. Trends are a great way, which showcase the
current happenings and also give an outlook about the future times. They also
have a longer shelf life and are driven by social, cultural and political
factors. This describes the marketing strategies for the FMCG companies to learn
about it in every possible way. Keeping pace with the trends allows the core team
to study, understand and improvise the strategies for profitable outcomes.
Health and Wellness

There is growing awareness amongst the consumers regarding their wellbeing.
The global and local FMCG companies are investing majorly in the health and
wellness sector, as majority of people today are into fitness and aim to live and
experience a healthy lifestyle. The proverb Health is Wealth, truly defines the
health of an individual, as it is the most integral aspect to lead a longer and
disease-free life.
Health and wellness is a trend, which is shaping the consumer preferences. The
leading global and Indian food and beverage companies are embracing this trend
and focusing on creating new emerging products in the health care domain.
The market is constantly flooded with products which promise the best of health
and an eye-catching label reading ‘100% Organic’, which at times are misleading
and undefined. In order for companies to make an impact, they have to offer
healthy and organic options on a platter which are best suited for the consumer’s
convenience.
The Customized Approach

In recent times, the consumers have become brand conscious as they prefer a high
quality lifestyle and premium range products. Consumers briefly want to
know what’s in store for them and primarily focus on the benefits and advantages
of every product. This, in turn has made the FMCG companies to emphasize on
innovating its existing product portfolio and developing new ones.
Also, customization and personalization is the way forward for FMCG

companies. With a customized service approach, the FMCG companies add a
personalized touch to a consumer’s product. This adds a bonus point on the
company’s name and makes the existing consumers to look forward for future
collaborations. It also attracts new consumers to experience the customization
process. This customization strategy comes with a cost, but also has immense
benefits as it offers the FMCG companies an insight into their consumer’s
behavior.
Online Marketing Leads the Way

The millennial and Gen Z consumers are growing in numbers and so are their
unique sets of demands. A recent survey states that they are more interested to
know the experiences to share it on various social media platforms. Living in a
digital world, online marketing is definitely a way to reach out to the audience.
As everyone today is influenced by social media, it definitely gives an overview
to understand or know any specification about products. In order to expand, the
FMCG companies should emphasize on experience sharing to attract consumer
attention.
Eating the Local Goodness
It is always said that eat what grows close to you. Every country has different
climatic conditions and the food that grows in one’s country is best suited for
them. People are often intimidated by products that look fancy and are flown
down from some country in the world. But, what they don’t realize is it can have
adverse effects on their health. So, it is always better to stick to your roots and eat
the local produce.
The FMCG companies have also realized this and are increasingly appealing to
consumers by launching products with regional flavors, ingredients, recipes and
more. The big brands as well as SMEs are connecting with consumers by using
regional flavors and ingredients that meet the regional and home country pride.
A Comprehensive Vision
The FMCG sector is full of opportunities and challenges. Uniqueness in services
and executions are the primary reins which can drive companies through
complexities of the market and roll out unmatched customer experience. Besides,
consumers today are getting more attentive than ever before and are looking
ahead in a broader perspective. Establishing a stable social platform and
sustaining in the longer run can empower the enterprises to trek beyond the
traditional horizons of FMCG market. This impact of the FMCG companies is
considerably growing in India and also with the consumer behavior evolving at a
fast pace, the companies will surely keep up with the marketing trends in 2018.
FMCG market Overview:

The global FMCG market is projected to reach $15,361.8 billion by 2025,
registering a CAGR of 5.4% from 2018 to 2025. Fast moving consumer goods
(FMCG) also known as consumer packaged goods are products that can be
bought at a low cost. These products are consumed on a small scale and are
generally available in a variety of outlets including grocery store, supermarket,
and warehouses. The FMCG market has experienced healthy growth over the last
decade because of adoption of experience retailing along with reflecting
consumers desire to enhance their physical shopping experience with a social or
leisure experience.
The global FMCG market is segmented based on product type, distribution
channel, and region. Based on product type it is classified as food and beverages,
personal care (skincare, cosmetics, hair care, others), healthcare care (over-the-
counter drugs, vitamins & dietary supplements, oral care, feminine care, others),
and home care. The distribution channel segment comprises of supermarkets and
hypermarkets, grocery stores, specialty stores, specialty stores, e commerce and
others. By region, it is analyzed through North America, Europe, Asia-Pacific,
and LAMEA.
In 2019, the food & beverage segment held majority share in the FMCG market
and is expected to hold a significant share in the global market throughout the
forecast period. Consumers today have become more knowledgeable and open to
food & beverages consumed by foreign cultures. They are driven by a sense of
exploration and are in search for new experience. This search for novel
experience has pushed the food & beverage operators to maintain the quality of
their offerings. The trend of healthy eating has also been a top impacting factor
affecting the growth of the food & beverage market. Consumers have become
increasingly health conscious and a large number of people have begun to follow
special diets and want to enjoy these healthier choices both at home and when
they are eating.
In 2019, the supermarkets and hypermarkets distribution channel segment
dominated the FMCG market. The growth of this segment is driven by rise in
disposable income and increase in demand for a one-stop solution for all shopping
needs. Moreover, the augmented experience provided by these retail formats
increases its attractiveness to customers. This in turn drives the growth of the
supermarkets and hypermarkets distribution channel segment of the FMCG
market.
In 2019, in terms of region, North America is expected to remain dominant and
grow at a steady pace in the FMCG market. However, Asia-Pacific is expected to
grow at the highest CAGR of 8.0% owing to changes in lifestyles, which is led
by globalization and increase in working population. The rise in the affluent
population and increased penetration of internet and social media has increased
the consumption of processed and packaged food, which makes way for the
growth of the FMCG market in the region. Furthermore, innovations in current
products and introduction of new products with attractive pricing is expected to
provide growth opportunities for the FMCG market in future.
The leading players in the FMCG market focus on providing customized solution
to consumers as their key strategies to gain a significant share in the market.
Strategies such as product launch and acquisition have also helped the key players
to gain a significant share in the global FMCG market. The key players profiled
in the report include Procter And Gamble, Unilever Group, The Coca Cola
Company, Pepsico Co. Inc, Kimberly-Clark Corporation, Patanjali Ayurved Ltd.,
Dr Pepper Snapple Group, Inc., Revlon, Inc, Johnson & Johnson, and Nestle.
Key Benefits for FMCG market:
 The report provides an in-depth analysis of the current trends, drivers, and
dynamics of the FMCG market to elucidate the prevailing opportunities
and tap the investment pockets.
 It offers qualitative trends and quantitative analysis of the global FMCG
market from 2018 to 2025 to assist stakeholders to understand the market
scenario.
 In-depth analysis of the key segments demonstrates the types of fast
moving consumer goods available.
 Competitive intelligence of the industry highlights the business practices
followed by key players across geographies and the prevailing market
opportunities.
 Key players and their strategies and developments are profiled to
understand the competitive outlook of the market.
FMCG Key Market Segments:

By Type
 Food & Beverage
 Personal Care
 Health Care
 Home Care
By Distribution Channel
 Supermarkets & Hypermarkets
 Grocery Stores
 Specialty Stores
 E-commerce
 Others
By Region
 North America
o U.S.
o Canada
o Mexico
 Europe
o Germany
o Spain
o UK
o Italy
o France
o Rest of Europe
 Asia-Pacific
o China
o India
o Japan
o Australia
o South Korea
o Rest of Asia-Pacific
 LAMEA
o Brazil
o South Africa
o Saudi Arabia
o UAE
o Rest of LAMEA
INVESTMENTS AND DEVELOPMENTS
The government has allowed 100 per cent Foreign Direct Investment (FDI) in
food processing and single-brand retail and 51 per cent in multi-brand retail. This
would bolster employment and supply chains, and also provide high visibility for
FMCG brands in organised retail markets, bolstering consumer spending and
encouraging more product launches. The sector witnessed healthy FDI inflows of
US$ 14.67 billion, during April 2000 to March 2019. Some of the recent
developments in the FMCG sector are as follows:
 Patanjali will spend US$743.72 million in various food parks in
Maharashtra, Madhya Pradesh, Assam, Andhra Pradesh and Uttar Pradesh.
 Dabur is planning to invest Rs 250-300 crore (US$ 38.79-46.55 million) in
FY19 for capacity expansion and is also planning to make acquisitions in
the domestic market.
 In May 2018, RP-Sanjiv Goenka Group created an Rs 1 billion (US$ 14.92
million) venture capital fund to invest in FMCG start-ups.
 In August 2018, Fonterra announced a joint venture with Future Consumer
Ltd which will produce a range of consumer and foodservice dairy
products.
Government Initiatives
Some of the major initiatives taken by the government to promote the FMCG
sector in India are as follows:
 The Government of India has approved 100 per cent Foreign Direct
Investment (FDI) in the cash and carry segment and in single-brand retail
along with 51 per cent FDI in multi-brand retail.
 The Government of India has drafted a new Consumer Protection Bill with
special emphasis on setting up an extensive mechanism to ensure simple,
speedy, accessible, affordable and timely delivery of justice to consumers.
 The Goods and Services Tax (GST) is beneficial for the FMCG industry
as many of the FMCG products such as Soap, Toothpaste and Hair oil now
come under 18 per cent tax bracket against the previous 23-24 per cent rate.
Also rates on food products and hygiene products have been reduced to 0-
5 per cent and 12-18 per cent respectively.
 The GST is expected to transform logistics in the FMCG sector into a
modern and efficient model as all major corporations are remodeling their
operations into larger logistics and warehousing.
URBAN MARKET REVENUE
Revenues of FMCG sector reached Rs 3.4 lakh crore (US$ 52.8 billion) in
FY18 and are estimated to reach US$ 103.7 billion in
2020F. The sector is projected to grow 11-12 per cent in 2019.
 The sector witnessed growth of 16.5 per cent in value terms between July-
September 2018; supported by moderate inflation, increase in private
consumption and rural income. It is forecasted to grow at 12-
 13 per cent between September-December 2018.
 The Union Budget 2019-20 initiatives to increase consumer spending

among middle class are expected to boost consumer confidence and
improve demand generation for branded consumer products.
 FMCG sector to gain support for growth from Inland Waterways

Authority of India (IWAI) multi-modal transportation project of freight
village at Varanasi which will bring together retailers, warehouse
operators and logistics service providers, investment worth Rs 1.7
billion (US$ 25.35 million).
 Nielsen India estimates the FMCG industry to grow at 11-12 per cent in
2019 as against 13.8 percent in 2018
 Accounting for a revenue share of around 55 per cent, urban segment

is the largest contributor to the overall revenue generated by the FMCG
sector in India.
 Rural segment is growing at a rapid pace and accounted for a revenue
share of 45 per cent in the overall revenues recorded by FMCG sector
in India. FMCG products account for 50 per cent of total rural
spending.
 In the last few years, the FMCG market has grown at a faster pace in rural
India compared with urban India. In 2018-19, revenues from the rural
segment are expected to grow 15-16 per cent outpacing.
 Demand for quality goods and services has been going up in rural areas of
India, on the back of improved distribution channels of manufacturing
and FMCG companies.
 FMCG urban segment is expected to have a steady revenue growth at 8 per
cent in FY19.
INCREASING ONLINE USERS BOOST ONLINE FMCG SALES

 In FY18, rural India accounted for 45 per cent of the total FMCG
market.
 Total rural income, which is currently at around US$ 572 billion, is
projected to reach US$ 1.8 trillion by FY21. India’s rural per capita
disposable income is estimated to increase at a CAGR of 4.4 per cent to
US$ 631 by 2020.
 As income levels are rising, there is also a clear uptrend in the share
of non-food expenditure in rural India.
 The Fast Moving Consumer Goods (FMCG) sector in rural and semi-
urban India is estimated to cross US$ 220 billion by 2025.
 The revenue of FMCG’s rural segment is forecasted to grow to 15-16 per

cent in FY19 from estimated 10 per cent in FY18.
10.40
 India’s increasing internet penetration, rising digital maturity along

with developing infrastructure has helped boost online transactions.
 The online FMCG market is forecasted to reach US$ 45 billion in

2020 from US$ 20 billion in 2017, backed by growth in online users from
90 million in 2017 to 200 million in 2020E.
 By 2020, about 40 per cent of FMCG consumption is estimated to be

digitally influenced.
 Around 72 per cent Indian consumers are most likely to shop online
locally for premium products
BOOST IN FDI INFLOWS AND INVESTMENTS
 100 per cent FDI is allowed in food processing and single-brand

retail and 51 per cent in multi-brand retail.
 This would bolster employment and supply chains, and also provide high
visibility for FMCG brands in organised retail markets, bolstering
consumer spending and encouraging more product launches.
 The sector witnessed healthy FDI inflows of US$ 14.67 billion during
April 2000 to March 2019.
 Within FMCG, food processing was the largest recipient; its share
was 62.03 per cent.
 Investment intentions, related to FMCG sector, arising from paper
pulp, sugar, fermentation, food processing, vegetable oils and
vanaspati, soaps, cosmetics and toiletries industries, worth Rs
916.13 billion (US$ 15.55 billion) were implemented between April
2000-December 2018.
MERGER AND ACCQUISITION
As markets become increasingly volatile amid changing consumer habits and

heightened digital competition, many firms now look to acquisitions as a root to
spreading risk as well as boosting financial performance in the short term.
M&A activity accounted for around 15% of growth in the FMCG sector,
according to a new study.
In a new market analysis, OC&C Strategy Consultants has examined the

performance of the globe’s 50 largest Fast Moving Consumer Goods (FMCG)
companies. The annual Global 50 report, in collaboration with Grocer,
examines the financial performance of the world’s largest consumer goods
companies.
One of the headline results of the study in 2018 was that the revenue of top 50
FMCG companies has risen strongly in the past year. This was on the back of a
dramatic recovery in revenue growth across the sector, from 0.5% in 2016 to
5.7% in 2017 – as the FMCG market reached its highest level since 2011. This
was exemplified by the growth of the top 10 players in the sector.
Top ranking Nestle held their position from last year, along with Procter &
Gamble, Pepsico and Unilever. In fact, while the odd group moved up or down
by one position, drinks titan AB INBEV, JBS, Tyson Foods, Coca-Cola,
L’Oreal and Phillip Moris International also completed the top 10 last year. Of
those, the most impressive performer was undoubtedly AB INBEV, buoyed
by merger and acquisition activity, which saw its local currency sales improve
by 24%. Indeed, in line with AB INBEV’s success, a lot of growth was driven
by M&A. The number of deals for the Global 50 jumped to a 15 year high in
2017, constituting a 45% leap from the previous term.
Responding to this, Will Hayllar, Partner and Head of Consumer Goods at

OC&C Strategy Consultants said, “While the underlying challenges the Global
50 face to restore organic growth and satisfy activist investors seeking margin
improvement have not gone away, the report shows that the globe’s 50 largest
FMCG companies are actively addressing those challenges and using M&A as a
key tool to do so.”
Key drivers of M&A
Examining the 60 deals, worth $145 billion in 2017, the researchers found that
there were four key trends which drove the ramping up of M&A activity in
2017. First, a continued emphasis on emerging markets saw 37% of acquisitions
occur in such economies. On top of this, OC&C said that there was a clear
pattern of portfolio optimisation on display. Global top 50 firms acquired and
divested in order to boost their growth ambitions in their existing portfolio
areas, with one example cited as the purchase of Mead Johnson, a US-based
infant milk formula producer by Reckitt Benckiser, which at the same time
divested from its food business.
Third, “better you” products appear to be remaining relevant. There were five
such acquisitions of companies making ‘healthy/natural’ products, including
P&G’s deal for a manufacturer of aluminium and paraben free deodorants, as
information about the potential health benefits of this spread via new and old
media. Finally, there were a number of acquisitions in non-core areas, as
businesses explored new avenues to supplement their traditional businesses.
These included fashion retailer Kimberly-Clark purchasing a Mexican logistics
service provider.
The 50 top FMCG firms are still experiencing a slower than industry average
organic growth rate, however, in terms of organic growth. In this respect,
growth remains subdued, stuck at 2.6% and with volume growth at only
0.6%, thereby highlighting the need for M&A to adapt business portfolios and
access new growth.
Some of the biggest deals included British American Tobacco’s acquisition of
Reynolds American, contributing to $61 billion in value, and Reckitt Benckiser
Group’s $18 billion purchase of infant formula maker Mead Johnson and
Company. Elsewhere in the 10 largest deals, the Campbell Soup Company spent
$6 billion on Snyder’s-Lance, and Tyson Foods sunk $4 billion into
AdvancePierre Foods Holdings.
Tyson Foods was of further interest to OC&C’s study, as an example of how

beyond the typical M&A routes, the Global 50 have increasingly been investing
in innovation. The investment in plant-based meat alternatives, Beyond Meat and
Sweet Earth, which both produce technology for creating convincing meat
equivalents, Tyson Foods weighed into the market. With a small yet dedicated
global movement of vegans taking root, particularly among younger generations,
meat producer Tyson Foods’ investment in Beyond Meat in 2017, seems like a
smart hedging of bets, in a world of ever more environmentally conscious
consumers.
Will Hayllar continued, “The investment in emergent businesses that are well
positioned to address the changing needs of consumers is a key part of major
FMCG players hunt for growth. We’ve seen that this hunt doesn’t stop with new
brands, as investment is also going into partnerships with digital technology
businesses that can help equip brand owners with new tools to drive growth.”
He concluded, “All of this highlights the importance of addressing one of the
central questions facing FMCG management teams today, how to nurture and
grow small propositions to scale without losing the distinctiveness that made
them appealing in the first place.”
OC&C further demonstrated that this M&A activity was extremely important
driver as a driver in growth, by examining the effect of purchases on a firm’s
performance. Organic growth stood at 4.4% compared to the ‘acquisition effect’,
which accounted for 14.7% of top FMCG companies.
STARTUPS and SMEs
As small manufacturers quit the FMCG industry, the same has severely
impacted the consumption story with over half of slowdown caused by the exits.
For an industry like FMCG which caters to customers across prosperity levels, it
may come as a surprise to some that more players are exiting the ‘fast-moving
consumer goods’ space rather than joining it, according to Nielsen. The same has
also cast a long shadow on the Indian consumption story as from Q218 to Q219,
the growth trajectory for small FMCG players has been on a continued
downtrend. The impact has been severe, “with the degree of decline in growth for
small manufacturers resulting in an overall contribution of 50% to India’s
slowdown story”, Nielsen said in its India FMCG growth snapshot for April-June
2019 quarter.
When asked whether small FMCG manufacturers or FMCG startups are eating
into the share of big players, which is being seen as a slowdown, Nielsen said that
on the contrary, small manufacturers are largely quitting and that has contributed
heavily to the slowdown.
Quick exit
“In 2017, 7400 players got added into FMCG space. That went to 7900 in 2018
and went down to 6000 in 2019. You’ll see a lot of small players, especially in
the food sector, entering after GST. However, post that, you see inflationary
pressure pushing them into increasing their prices. For a consumer that means
should I go for a brand that is known to me and very close to the price range
compared to the new player that has just come up? So that’s also a factor at play
here. Trade dynamics and complex Indian environment is also an active player,”
Sunil Khiani, Head of Retail Measurement Services, Nielsen South India, told
Financial Express Online.
Further, change in pack price architecture, within the small players, has led to
them losing out on price advantage over large players. The small players also
witnessed a 57% slowdown in the food category which is otherwise a large driver
of sales for them. These food items include salty snacks, packaged tea, biscuits,
and spices, according to Nielsen’s findings.
The North and West zone have promoted growth for small manufacturers but
these zones have seen a steep fall in growth. While growth rate was at 33% in
Q318, it fell to 12.6% in Q219 in the North zone and from 25.5% to 10.6% in the
West zone.
GST hurt more than demonetisation
Even while the growth for small, medium and large enterprises did not hit a rock
post demonetisation, the same was affected during July 2017 after GST roll-out
and Nov 2017 after GST rates were redefined for few categories. The growth for
small, medium and large enterprises picked up in Q318, according to the Nielsen
findings, however, it saw unprecedented slump post that period.
WINNING MODEL FOR CREATING VALUE
For many decades, the FMCG industry has enjoyed undeniable success. By 2010,
the industry had created 23 of the world’s top 100 brands and had grown total
return to shareholders (TRS) almost 15 percent a year for 45 years—performance
second only to the materials industry.
The FMCG value-creation model
This success owed much to a widely used five-part model for creating value.
Pioneered just after World War II, the model has seen little change since then.
FMCG companies did the following:
 Perfected mass-market brand building and product innovation. This
capability achieved reliable growth and gross margins that are typically 25
percent above nonbranded players.
 Built relationships with grocers and other mass retailers that provide
advantaged access to consumers. By partnering on innovation and in-store
execution and tightly aligning their supply chains, FMCG companies
secured broad distribution as their partners grew. Small competitors lacked
such access.
 Entered developing markets early and actively cultivated their categories
as consumers became wealthier. This proved a tremendous source of
growth—generating 75 percent of revenue growth in the sector over the
past decade.
 Designed their operating models for consistent execution and cost
reduction. Most have increased centralization in order to continue pushing
costs down. This synergy-based model has kept general and administrative
expenses at 4 to 6 percent of revenue.
 Used M&A to consolidate markets and create a basis for organic growth
post acquisition. After updating their portfolios with new brands and
categories, these companies applied their superior distribution and business
practices to grow those brands and categories.
Signs of stagnating success
But this long-successful model of value creation has lost considerable steam.
Performance, especially top-line growth, is slipping in most subsegments. The
household-products area, for example, has dropped from the sixth most profit-
generating industry at the start of the century to the tenth, measured by economic
profit. Food products, long the most challenging FMCG subsegment, fell from
21st place to 32nd. As a consequence, FMCG companies’ growth in TRS lagged
the S&P 500 by three percentage points from 2012 to 2017. As recently as 2001–
08, their TRS growth beat the S&P by 6 percent a year.
The issue is organic growth. From 2012 to 2015, the FMCG industry grew
organic revenue at 2.5 percent net of M&A, foreign-exchange effects, and
inflation, a figure that is a bit lower than global GDP over the period. But
companies with net revenue of more than $8 billion grew at only 1.5 percent (55
percent of GDP), while companies under $2 billion grew at twice the large
company rate.
This difference suggests that large companies face a serious growth penalty,
which they are not making up for through their minor expansion in earnings
before interest and taxes
This growth challenge really matters because of the particular importance of

organic growth in the consumer-goods industry. FMCG companies that achieve
above-market revenue growth and margin expansion generate 1.6 times as much
TRS growth as players who only outperform on margin.
Disruption of mass-market product innovation and brand building
Four of the ten trends threaten the most important element of the current model—
mass-market product innovation and brand building.
The millennial effect
Consumers under 35 differ fundamentally from older generations in ways that

make mass brands and channels ill suited to them. They tend to prefer new brands,
especially in food products. According to recent McKinsey research, millennials
are almost four times more likely than baby boomers to avoid buying products
from “the big food companies.”
And while millennials are obsessed with research, they resist brand-owned
marketing and look instead to learn about brands from each other. They also tend
to believe that newer brands are better or more innovative, and they prefer not to
shop in mass channels. Further, they are much more open to sharing personal
information, allowing born-digital challenger brands to target them with more
tailored propositions and with greater marketing-spend efficiency.
Millennials are generally willing to pay for special things, including daily food.
For everything else, they seek value. Millennials in the United States are 9 percent
poorer than Gen Xers were at the same age, so they have much less to spend and
choose carefully what to buy and where to buy it.
Digital intimacy (data, mobile, and the Internet of Things [IoT])
Digital is revolutionizing how consumers learn about and engage with brands and
how companies learn about and engage with consumers. Yesterday’s marketing
standards and mass channels are firmly on the path to obsolescence. Digital-
device penetration, the IoT, and digital profiles are increasing the volume of data
collected year after year, boosting companies’ capabilities but also consumer
expectations. Most FMCGs have started to embrace digital but have far to go,
especially in adopting truly data-driven marketing and sales practices.
Some FMCG categories, particularly homecare, will be revolutionized by the
IoT. We will see the IoT convert some product needs, like laundry, into service
needs. And in many categories, the IoT will reshape the consumer decision
journey, especially by facilitating more automatic replenishment.
Explosion of small brands
Many small consumer-goods companies are capitalizing on millennial

preferences and digital marketing to grow very fast. These brands can be hard to
spot because they are often sold online or in channels not covered by the
syndicated data that the industry has historically relied on heavily.
But venture capitalists have spotted these small companies. More than 4,000 of
them have received $9.8 billion of venture funding over the past ten years—$7.2
billion of it in the past four years alone, a major uptick from previous years
(Exhibit 3). This funding is fueling the growth of challenger brands in niches
across categories.
Retailers have also taken notice of these small brands. According to The Nielsen
Company, US retailers are giving small brands double their fair share of new
listings. The reason is twofold: retailers want small brands to differentiate their
proposition and to drive their margins, as these small brands tend to be premium
and rarely promote. As a consequence, small brands are capturing two to three
times their fair share of growth while the largest brands remain flat or in slight
decline.
Five factors make a category ripe for disruption by small brands. High margins
make the category worth pursuing. Strong emotional engagement means
consumers notice and appreciate new brands and products. A value chain that is
easy to outsource makes it much easier for born-digital players to get started and
to scale. Low shipment costs as a percent of product value make the economics
work. And low regulatory barriers mean that anyone can get involved. Most
consumer-goods categories fit this profile.
The beauty category in particular is an especially good fit, so the advanced

explosion of small brands in this category is no surprise. In color cosmetics, born-
digital challenger brands already represent 10 percent of the market and are
growing four times faster than the rest of the segment. The explosion of small
brands in beauty enjoys the support of significant venture-capital investment—
$1.6 billion from 2008 to 2017, with 80 percent of this investment since 2014.
At the same time, digital marketing is fueling this challenger-brand growth while
lifting the rest of the category, as beauty lovers find new ways to indulge in their
passion. An astounding 1.5 million beauty-related videos are posted on YouTube
every month, almost all of them user generated.
Better for you
For years, consumers said that they wanted to eat healthier foods and live
healthier lifestyles, but their behavior did not change—until now. Consumers are
eating differently, redefining what healthy means, and demanding more products
that are natural, green, organic and/or free from sugar, gluten, pesticides, and
other additives. Packaged-food players are racing to keep up, even as consumers
are increasing pressure on the packaged-goods subsector by eating more fresh
food.
Disruption of mass-retailer relationships
Three trends are fueling a fierce business-model battle in retail. The e-commerce
giants are already the clear winners, while the discounter business model is also
flourishing. Mass merchants are feeling the squeeze.
E-commerce giants
E-commerce giants Amazon, Alibaba Group, and JD.com grew gross

merchandise value at an amazing rate of 34 percent a year from 2012 to 2017. As
their offer attracts consumers across categories, they are having a profound
impact on consumer decision journeys. This change requires FMCGs to rewrite
their channel strategies and their channel-management approaches, including
how they assort, price, promote, and merchandise their products, not just in these
marketplaces but elsewhere. This disruption is in early days in markets other than
China and will accelerate as the e-commerce giants increase their geographic
reach and move in to brick-and-mortar locations. Amazon’s push on private
labels is a further game changer. To see the future, we can look to how China
FMCG retailing has been revolutionized by Alibaba Group and JD.com and the
profound impact Amazon has had on its early categories like electronics, books,
and toys.
Discounters
ALDI and LIDL have grown at 5.5 percent from 2012 to 2017, and they are
looking to the US market for growth. Discounters typically grow to secure market
share of 20 percent or more in each grocery market they enter. This presence
proves the consumer appeal of the format, which enables discounters to price an
offering of about 1,000 fast-moving SKUs 20 percent below mass grocers while
still generating healthy returns.
Mass-merchant squeeze
The rise of the e-commerce giants and the discounters is squeezing grocers and
other omnichannel mass merchants. Together, the seven largest mass players saw
flat revenue from 2012 to 2017. This pressure is forcing mass merchants to
become tougher trading partners. They are pursuing more aggressive
procurement strategies, including participating in buying alliances, getting tighter
on SKU proliferation, and decreasing inventory levels. They are also seeking out
small brands and strengthening their private labels in their quest for
differentiation and traffic.
Disruption of developing-market category creation: The rise of local competitors

Developing markets still have tremendous growth potential. They are likely to
generate new consumer sales of $11 trillion by 2025, which is the equivalent of
170 Procter & Gambles.
But local competitors will fight for that business in ways the multinational
FMCGs have not seen in the past. As new competitors offer locally relevant
products and win local talent, FMCG companies will need to respond—which
will challenge the fairly centralized decision-making models that most of them
use.
Further, channels in developing markets are evolving differently than they did in
the West, which will require FMCGs to update their go-to-market approaches.
Discounter-like formats are doing well in many markets, and mobile will
obviously continue to play a critical, leapfrogging role.
Disruption of the synergy-focused operating model: Pressure for profit
Driven by activist investors, the market has set higher expectations for spend
transparency and redeployment of resources for growth. Large FMCGs are being
compelled to implement models such as zero-based budgeting that focus
relentlessly on cost reduction. These approaches, in turn, typically reduce spend
on activities such as marketing that investors argue do not generate enough value
to justify their expense. While this approach is effective at increasing short-term
profit, its ability to generate longer-term winning TRS, which requires growth, is
unproven.
Disruption of M&A: Increasing competition for deals
M&A will remain an important market-consolidation tool and an important

foundation for organic revenue growth in the years following an acquisition. But
some sectors like over-the-counter drugs will see greater competition for deals,
especially as large assets grow scarce and private-equity firms provide more and
more funding.
Of course, the importance of these ten disruptive trends will vary by category.
But five of the trends—the millennial effect, digital intimacy, the explosion of
small brands, the e-commerce giants, and the mass-merchant squeeze—will
deliver strong shocks to all categories
FMCG is an essential part of day to day life and accounts for more hn half of all
consumer spending. It comprises of products such as food & beverages, over-the-
counter drugs, health care products, and other products such as personal care,
toiletries, and homecare products. The global FMCG market has witnessed
significant growth, owing to change in lifestyles, variations in demographics,
upsurge in organized retail, rise in disposable income, and increase in
urbanization.
Indian FMCG industries have higher growth potential as compared to the world,
due to increase in the purchasing power of the Indian population and its sizeable
youth population coupled with growth stage of the industries. There has been an
increase in disposable incomes both in the urban cities as well as in rural India.
The share of spending on basic necessities, leisure & recreation, and
miscellaneous goods & services witness increase with the rise in household
incomes and disposable incomes. This in turn boosts, the growth of the Indian
FMCG market.
In addition, growth in young population of India is considered to be the major

consumer segment for FMCG products. Changes in needs and preferences of this
segment has enforced domestic players to create products specifically compatible
with lifestyle of young population. International players are also trying to mold
their products and offerings according to Indian consumer needs to enter and
succeed in a diverse market like India. Further, strong distribution channel
network make the desired product accessible to the customers, which contributes
to the growth of Indian FMCG market. The emergence and growth of e-
commerce also fuels the market growth. This is expected to make way for
established FMCG firms to develop their existing brands to gain higher margins.
Business Models of FMCG Industry
The fast-moving-consumer-goods industry has a long history of generating

reliable growth through mass brands. But the model that fueled industry success
now faces great pressure as consumer behaviors shift and the channel landscape
changes. To win in the coming decades, FMCGs need to reduce their reliance on
mass brands and offline mass channels and embrace an agile operating model
focused on brand relevance rather than synergies.
A winning model for creating value


 Perfected mass-market brand building and product innovation. This
capability achieved reliable growth and gross margins that are typically 25
percent above nonbranded players.
 Built relationships with grocers and other mass retailers that provide
advantaged access to consumers. By partnering on innovation and in-store
execution and tightly aligning their supply chains, FMCG companies
secured broad distribution as their partners grew. Small competitors lacked
such access.
 Entered developing markets early and actively cultivated their categories
as consumers became wealthier. This proved a tremendous source of
growth—generating 75 percent of revenue growth in the sector over the
past decade.
 Designed their operating models for consistent execution and cost
reduction. Most have increased centralization in order to continue pushing
costs down. This synergy-based model has kept general and administrative
expenses at 4 to 6 percent of revenue.
 Used M&A to consolidate markets and create a basis for organic growth
post acquisition. After updating their portfolios with new brands and
categories, these companies applied their superior distribution and business
practices to grow those brands and categories.
company rate.
before interest and taxes .
Ten disruptive trends that the industry cannot ignore
Why has this FMCG model of value creation stopped generating growth?
Because ten technology-driven trends have disrupted the marketplace so much
that the model is out of touch. Most of these trends are in their infancy but will
have significant impact on the model within the next five years.

Some FMCG categories, particularly homecare, will be revolutionized by the
IoT. We will see the IoT convert some product needs, like laundry, into service
needs. And in many categories, the IoT will reshape the consumer decision
journey, especially by facilitating more automatic replenishment.
Any small consumer-goods companies are capitalizing on millennial preferences

and digital marketing to grow very fast. These brands can be hard to spot because
they are often sold online or in channels not covered by the syndicated data that
the industry has historically relied on heavily.
across categories.

E-commerce giants
and toys.
Discounters
Disruption of developing-market category creation: The rise of local

competitors
use.
unproven.

more funding.
deliver strong shocks to all categories (Exhibit 5).
A new model for creating value in a reshaped marketplace
To survive and thrive in the coming decades, FMCG companies will need a new
model for value creation, which will start with a new, three-part portfolio strategy.
Today, FMCGs focus most of their energy on large, mass brands. Tomorrow,
they will also need to leapfrog in developing markets and hothouse premium
niches.
This three-part portfolio strategy will require a new operating model that
abandons the historic synergy focus for a truly agile approach that focuses
relentlessly on consumer relevance, helps companies build new commercial
capabilities, and unlocks the true potential of employee talent. M&A will remain
a critical accelerator of growth, not only for access to new growth and scale, but
also new skills
Broader, three-part portfolio strategy
Today, most FMCGs devote most of their energy to mass brands. Going forward,
they will need excellence in mass-brand execution as well as the consumer
insights, flexibility, and execution capabilities to leapfrog in developing markets
and to hothouse premium niches.
Sustaining excellence in the developed-market base
Mass brands in developed markets represent the majority of sales for most
FMCGs; as such, they are “too big to fail.” FMCGs must keep the base healthy.
The good news is that the industry keeps advancing functional excellence,
through better technology and, increasingly, use of advanced analytics. The
highest-impact advances we see are revamping media spend, particularly through
programmatic M&A and understanding of return on investment, fine-tuning
revenue growth management with big data and tools like choice models,
strengthening demand forecasting, and using robotics to improve shared services.
In addition to taking functional excellence to the next level, FMCGs will need to
focus relentlessly on innovation to meet the demands of their core mass and
upper-mass markets.
FMCGs will need to increase their pace of testing and innovating and adopt a
“now, new, next” approach to ensure that they have a pipeline of sales-stimulating
incremental innovation (now), efforts trained on breakthrough innovation (new),
and true game changers
Further, FMCGs will need to gather their historically decentralized sales function,
adopting a channel-conflict-resistant approach to sales. They will need to treat e-
commerce as part of their core business, overcome channel conflict, and
maximize their success in omni and e-marketplaces. Players like Koninklijke
Philips that have weathered the laborious process of harmonizing trade terms
across markets are finding that they can grow profitably on e-marketplaces.
Finally, FMCGs will need to keep driving costs down. We are following three
big ideas on cost.
First, zero-based budgeting achieves sustained cost reduction by establishing
deep transparency on every cost driver, enabling comparability and fair
benchmarking by separating price from quality, and establishing strict cost
governance through cost-category owners who are responsible for managing cost
categories across business-unit profits and losses.
Second, touchless supply-chain and sales-and-operations planning replace
frequent sales-and-operations meetings with a technology-enabled planning
process that operates with a high degree of automation and at greater speed than
manual processes.
Third, advanced analytics and digital technologies improve manufacturing
performance by pulling levers like better predictive maintenance, use of
augmented reality to enable remote troubleshooting by experts, and use of
advance analytics for real-time optimization of process parameters to increase
throughput yield of good-quality product.
Many of these changes will require strengthening technology—making it a core
competency, not a cost center.
Leapfrogging new category creation in developing markets
FMCG companies must bring their newest and best innovation, not lower-quality
products, into developing markets early to capture a share of the $11 trillion
potential growth. Success will require excellent digital execution, as many of
these markets will grow up to be digital. Success will also require empowering
local leadership to compete with the local players looking to seize the market’s
growth potential. Local leaders will need decision rights on marketing as well as
a route to market that is joined up across traditional, omni, and e-marketplace
channels.
Hothousing premium niches
FMCG companies must identify and cultivate premium niches that have attractive
economics and high growth potential to capitalize on the explosion of small
brands. Success will require acquiring or building small businesses and helping
them reach their full potential through a fit-for-purpose commercialization and
distribution model. This means, for example, building a supply chain that
produces small batches and can adapt as companies learn from consumers. The
beauty industry’s incubators are a good model here.
The demands of this three-part portfolio strategy call for a new, agile operating
model that allows a company to adapt and drive relevance rather than prioritizing
synergy and consistent execution above other objectives.
Agile operating model
Originating in software engineering, the concept of an agile operating model has

extended successfully into many other industries, most significantly banking.
Agile promises to address many of the challenges facing the traditional FMCG
synergy-focused model.
Building an agile operating model requires abandoning the traditional command-
and-control structure, where direction cascades from leadership to middle
management to the front line, in favor of viewing the organization as an organism.
This organism consists of a network of teams, all advancing in a single direction,
but each given the autonomy to meet their particular goals in the ways that they
consider best. In this model, the role of leadership changes from order-giver to
enabler (“servant leader”), helping the teams achieve their goals.
An agile operating model has two essential components—the dynamic front end
and the stable backbone. Together, they bring the company closer to customers,
increase productivity, and improve employee engagement.
The dynamic front end, the defining element of an agile organization, consists of
small, cross-functional teams (“squads”) that work to meet specific business
objectives. The teams manage their own efforts by meeting daily to prioritize
work, allocate tasks, and review progress; using regular customer-feedback loops;
and coordinating with other teams to accomplish their shared goals.
The stable backbone provides the capabilities that agile teams need to achieve
their objectives. The backbone includes clear rights and accountabilities,
expertise, efficient core processes, shared values and purpose, and the data and
technology needed for a simple, efficient back office.
The agile organization moves fast. Decision and learning cycles are rapid. Work
proceeds in short iterations rather than in the traditional, long stage-gate process.
Teams use testing and learning to minimize risk and generate constant product
enhancements. The agile organization employs next-generation technology to
enable collaboration and rapid iteration while reducing cost.
We also expect the FMCG operating model of the future to be more unbundled,
relying on external providers to handle various activities, while FMCGs perhaps
provide their own services to others.
M&A as an accelerator
M&A will remain critical to FMCG companies as a way to pivot the portfolio
toward growth and improve market structure. The strongest FMCGs will develop
the skills of serial acquirers adept at acquiring both small and large assets and at
using M&A to achieve visionary and strategic goals—redefining categories,
building platforms and ecosystems, getting to scale quickly, and accessing
technology and data through partnership. These FMCGs will complement their
M&A capability with absorbing and scaling capabilities, such as incubators or
accelerators for small players, and initiatives to help their teams and functions
support and capitalize on the changing business.
Moving forward
To determine how best to respond to the changing marketplace, FMCG

companies should take the following three steps:
 Take stock of your health by category in light of current and future
disruption, and decide how fast to act. This means asking questions about
the external market: how significantly are our consumers changing? How
well positioned are we to respond to these changes? What are the scale and
trajectory of competitors that syndicated data do not track? Is our growth
and rate of innovation higher than these competitors, particularly niche
competitors? How advanced are competitors on making model changes
that might represent competitive disadvantages for us? How healthy are
our channel partners’ business models, and to what degree are we at risk?
Do our future plans take advantage of growth tailwinds and attractive
niches? Answering these questions creates the basis for developing
scenarios on how rapidly change will happen and how the current business
model might fare in each scenario.
 Draft the old-model-to-new-model changes that will position the company
for success over the next decade. This is the time to develop a three-part
portfolio strategy and begin the multiyear transformation needed to
become an agile organization, perhaps by launching and then scaling agile
pilots. This is also the time to determine which capabilities to prioritize and
build and the time to redesign the operating model, applying agile concepts
and incorporating the IT capabilities that offer competitive advantage.
Change management and talent assessment to determine where hiring or
reskilling are needed will be critical.
 Develop an action plan. The plan should include an ambitious timeline for
making the needed changes and recruiting the talent required to execute the
plan.
These efforts should proceed with controlled urgency. Over time, they will wean
FMCG companies from reliance on the strategies and capabilities of the
traditional model. Of course, as companies proceed down this path, they will need
to make ever-greater use of the consumer insights, innovation expertise and
speed, and activation capabilities that have led the industry to success and will do
so again.
Future Projections/Trends by 2025-2030
The main trends that have begun—and will most likely continue—to affect the
consumer industry. Some of them are already top of mind among executives,
others less so. The trends can be divided into five categories: the changing face
of the consumer, evolving geopolitical dynamics, new patterns of personal
consumption, technological advancements, and structural industry shifts.
There is some level of consensus among industry observers as to how a few of

these trends will evolve in the next 15 years. For example, it appears fairly certain
that spending among middle-class consumers globally will almost triple by 2030
(as emerging-market growth more than offsets stagnation in developed markets)
and that more than 75 percent of the world’s population will own a mobile phone.
Other trends, however, don’t yet give clear indications of their medium- and long-
term trajectory. Some trends could experience explosive growth while others
simply peter out in a few years. One example is 3-D printing for personal use:
although 3-D printers for the consumer market are now available for less than
$1,000, experts are divided on whether the hype surrounding this new technology
will translate into widespread consumer adoption.
Each trend will also have a different level of impact on the consumer industry.
Some will affect more geographic regions and a greater percentage of the world
population; some will cause bigger shifts in consumer spending. Mapping the
trends on a matrix—with level of predictability on one axis and potential
consumer-sector impact on another—can give consumer companies a starting
point for understanding which trends could have the greatest effect on their
businesses
By looking across the high-predictability, high-impact trends (those in the upper-

right quadrant of the matrix), we can develop a base case for 2030—a picture of
what the consumer industry will probably look like in 15 years. With the number
of city dwellers increasing at a rate of 65 million each year, the majority of the
consuming population will be urban. The average consumer will be slightly older,
since growth among aging populations in developed markets is outpacing growth
in the younger demographic in emerging markets—although age profiles will of
course vary by market. About 75 percent of the 8.5 billion people projected to be
alive in 2030 will have both mobile and Internet access. The middle class in
emerging markets will be substantially bigger and its members better off than
their parents (average wages in China, for instance, are likely to be approximately
45 percent of those in the United States, up from 15 percent today). On the
business side, consolidation will continue, owners and investors will become
more interventionist, and companies will make better use of digitization, big data,
and analytics.
The trends won’t affect all consumer markets and product categories equally. For
instance, advanced robotics is making headway in Asia but is yet to take off in
South America or Africa. Companies should bear such nuances in mind when
determining which trends are most relevant to their own situations.
To prepare for low-predictability trends—those on the far-left side of Exhibit 2—

the most forward-thinking companies consider and debate a range of scenarios
for how the trends might unfold. They define a set of markers that indicate the
likelihood of each scenario materializing (examples of markers might include a
major change in the number of SKUs in a product category, or the amount of
investment in a particular technology among start-ups). They then explore how
the industry structure, value chain, and competitive landscape might change in
each scenario; prepare a portfolio of options; and scale investments up or down
as new information becomes available.
Five questions to consider
For most companies—regardless of geographic or category mix—the base-case

trends will almost certainly result in financial pressures. In fact, our analysis
indicates that close to 20 percent of companies in the consumer sector are already
in financial distress today.4
Companies that are active primarily in mature, low-growth markets are
particularly vulnerable. Spikes in input costs, even if partially offset by factors
such as lower oil prices, could increase cost of goods sold and depress gross
margins (in some categories, by as much as ten percentage points). Greater
product complexity and rising labor costs could push up operating expenses by
three to five percentage points. And investments in automation and digitization
could increase depreciation on capital expenditures by two to three percentage
points, even as they enable efficiency gains over time.
Leaders would do well to consider the following five questions. Formulating
thoughtful answers to these questions will help equip them for what lies ahead.
What makes us distinctive?
In an environment of heightened competition, continued industry consolidation,

and deeper involvement from private-equity owners and activist investors,
“challenge everything” could be one mantra of consumer and retail companies.
They ought to be willing to evaluate and rethink every part of their business
system, zero in on what makes them different and what truly confers competitive
advantage, and drive out all superfluous costs. Companies that have made moves
in this direction include The Coca-Cola Company, which has been divesting its
US distribution assets over the past two years, and P&G, which shed more than
100 brands so that it could focus on approximately 70 core brands.
Rigorous cost reduction is an essential part of such an undertaking. The most

disciplined companies make cost-structure improvements part of the annual
strategic agenda, conduct detailed internal and external benchmarking, and instill
a cost-conscious mind-set at all levels of the organization through individual
targets and incentives. Many companies should seek to drive out at least 20
percent of operating costs, through initiatives such as lean
transformations,5 outsourcing of business functions, or zero-base budgeting.6 It’s
likely that ambitious cost programs—such as those recently undertaken by Best
Buy and Levi Strauss & Co.—will become much more common.
How can we engage consumers in an ongoing dialogue?
Especially in an era of fast-changing consumer profiles and behaviors, companies

must strive for a thorough understanding of what consumers want and are willing
to pay for, and systematically use those insights to inform the evolution of
products and brands.
Are we paying enough attention to social media? Recent research proves yet
again that social media has a strong influence on purchase decisions: across
product categories, 26 percent of purchases on average were spurred by
recommendations on social media.7 As smartphones get smarter and social
networks become more sophisticated, it will become even easier for consumers
to share their opinions about products and services. Companies can’t afford to
ignore these conversations. They should consider investing in ways to listen in
on—and, just as important, generate—social-media buzz.
How can we involve consumers in brand innovation? Many companies—LEGO,

Pepsi, and Unilever, to name a few—already use crowdsourcing in one form or
another to develop and test new products. The advent of 3-D printing and rapid-
prototyping techniques has made it easier and cheaper for companies to test and
continuously improve their new-product
ideas.
What new consumer touchpoints can we offer? Companies must meet consumers’
rising expectations for being able to buy what they want, when and how they want
it—which means providing a seamless omnichannel experience. They must
ensure that consumers have every opportunity to interact with the brand, be it
through online or offline channels. For example, Nordstrom customers can buy
products not just in stores and on the web, but also on a mobile app, on Instagram,
or via text message—and they can pick up, return, or exchange their online
purchases at Nordstrom stores.
Are we set up to reallocate resources swiftly and at scale?
The rapid pace of change requires companies to nimbly move capital, talent, and
leadership to the consumer segments, geographic markets, and business models
with the greatest growth potential. A disproportionately large investment in
developed markets, for instance, may be shortsighted, as it reflects a bias toward
markets that are currently the largest rather than those with the greatest growth
potential. (This bias may be part of the reason that, in almost every emerging
economy, multinational CPG players are losing share to local champions.)
Furthermore, the skill sets that CPG companies and retailers will need to win in
the future, such as serving emerging-market consumers and managing new
technologies, are different from the skills they’ve traditionally valued. A
company’s talent must align with its long-term market needs. Companies might
consider doubling their people investment (with regard to both staff size and skill
levels) in long-term growth areas, particularly in critical functions such as
advanced analytics and R&D.
Indeed, research suggests that companies that more actively reallocate

investments deliver, on average, 30 percent higher total returns to shareholders
annually than companies with more static budgets.10
Yet agility in resource allocation is still rare. At most organizations, the current
year’s allocation serves as the basis for the next year’s, with only marginal
changes.
How can companies get away from the “stickiness” of historical resource
allocation? Best-practice companies agree on and continually monitor a set of
metrics (such as underlying market growth in a category) that serves as the basis
for dynamic resource allocation. Reallocation is on the agenda at annual top-
management workshops and regional strategy sessions. The management team
has transparent decision-making mechanisms and a clear sense of priorities to
guide investment and divestment.
What strategic relationships should we seek out and nurture?
In an uncertain and rapidly changing world, partnerships and acquisitions can be

especially critical in two areas: better managing the supply chain and coming up
with new ideas.
Are there opportunities to integrate up or down the value chain? Partly as a hedge
against rising input costs, and more broadly as a means of exerting greater control
over the supply chain, some companies are pursuing backward integration.
Mexican bottling company Arca Continental, for instance, already has a stake in
a sugar mill and is looking to expand its position.
Who is in our ‘innovation ecosystem’? The most innovative companies regularly
tap into external sources of skills and expertise, particularly in areas outside their
core competencies. Partners might include “connected home” vendors, research
providers, or academic institutions. Today, for instance, CPG companies are
working with strategic-design firms to identify unmet consumer needs and
develop consumer empathy. Retailers are collaborating with telecommunications
providers to create cutting-edge in-store tracking systems and shopping apps. For
example, discount chain Target, seeking to grow its grocery business, is
partnering with design firm IDEO and the MIT Media Lab to study food trends.
How can we use technology to differentiate, not just enable?
The leading consumer companies of the future will also be technology

leaders.12 Many companies have acknowledged this reality, as evidenced by their
recent openings of “labs” in Silicon Valley and other technology hubs.
@WalmartLabs employs more than 3,000 people. The Home Depot acquired
Austin-based tech start-up BlackLocus and turned it into an in-house lab. Coca-
Cola, The Hershey Company, and Lowe’s have invested in SU Labs, a program
at Silicon Valley’s Singularity University that, according to its website, helps
companies “experiment with emerging technologies . . . before they’re
ubiquitous.”
Have we digitized both our front and back end? Companies must take a
disciplined approach to thinking through and managing large digital
initiatives.13 And they must digitize not only back-office functions, but
consumer-facing functions as well. By 2030, we expect retailers will be able to
create new retail “worlds”—virtual stores that use augmented reality to give
customers the experience of walking down a store aisle, for instance, or
personalization engines that link to real-time biometric data to recommend meals
with optimal nutritional content.
Have we adopted a ‘mobile first’ mind-set? Given the massive shift to mobile
shopping, companies will need to develop a mobile-led omnichannel strategy
rooted in a “mobile first” mind-set. Already, leading consumer companies are
allowing customers to “scan to buy” products from home or to use mobile-linked
features to navigate a store without the help of sales staff. For retailers, a mobile
and loyalty platform—available on any mobile device and featuring all the
functionality and information that customers need in order to make buying
decisions and digital payments—will be table stakes. For CPG companies, a
robust mobile strategy will involve not only developing their own digital assets
but also optimizing their brands’ presence on the mobile apps of Amazon and
other multichannel retailers.
Are we advancing with analytics? To fully exploit data and analytics, companies
must be able to choose and manage data from multiple sources, build models that
turn the data into insights, and translate the insights into effective action. 14 All
this requires deep analytical skills that typically need to be brought in from
outside. Companies must be willing to invest in new talent. We’ve found that a
small but expert analytics team, equipped with cutting-edge tools, can accomplish
much more than an army of unqualified employees.
One of the most vexing challenges faced by FMCG/CPG firms is setting one price
that unifies all internal objectives: one price that simultaneously boosts top-line
growth, is aligned with the brand positioning, and increases penetration and
growth. Our pricing solution addresses this challenge by using data and statistics
to find a price that does just that. And it works every time.
 Price Positioning & Strategy
 New Product Pricing
 Market Launch Pricing
 Assortment Optimization
 Value Communication
 Price Increase Implementation
 International Pricing
 Promotional Optimization
PRICE POSITIONING & STRATEGY OF FMCG INDUSTRY
Setting the overall price position against other products in the assortment, or
against competitors, is always a key challenge in FMCG / CPG.
If you need to price a product (or service) in a new market, it makes all the
difference in the world if you understand customers' willingness-to-pay.
Demand / WtP curves like the ones above, show the optimal price point where
the curve peaks. In this example, the best price to optimize quantity is 10, whereas
the optimal price for optimizing revenue is 15.
In the old days when research was expensive, this could be difficult to get through
a corporate approval if launching in many markets at once. These days, with cost-
effective research options from.
NEW PRODUCT PRICING
Understand consumers' willingness-to-pay for new products, and use such

insights to optimize prices when launching innovative products.
In CPG / FMCG, innovation is crucial for many brands. It is quite common that
20-30% of all products sold are recently launched. Companies spend many
millions in launch marketing and advertising across multiple channels. However,
they often struggle to set the right price. With price research, you can test different
concepts and communication strategies before launching, and understand
consumers' willingness-to-pay for those options. This provides solid facts and
improves the likelihood of success of the launch, when launch prices are aligned
with value perception of the consumers.
MARKET LAUNCH PRICING
Setting the right prices when launching into new markets is often a challenge in
FMCG/CPG companies. PriceBeam helps understanding market differences and
setting optimal price points for each.
MARKET LAUNCH CHALLENGES
Pricing Managers, Marketing Managers, and Sales teams often find it more
difficult to get pricing right when launching a product in a new market, as
opposed to pricing the same product in an existing market. In theory existing-
market pricing should go through the same steps as new-market pricing and look
at value drivers and willingness-to-pay, but in many situations existing markets
mean there is a reference point to base the price on. Such a reference point is
lacking if pricing for a new market.
VALUE COMMUNICATION
Understand the benefits and features that consumers value as well as those
attributes that don't impact consumers' willingness-to-pay
While overall willingness-to-pay is a useful start, for really professional new

market pricing, the next step should be to break down the willingness-to-pay into
the individual value drivers. For what features or benefits are customers willing
to-pay, and how much.
A good method for understanding the individual value-drivers is to use choice-
based conjoint analysis. In this type of research respondents are shown a set of
product choices. He/she then chooses his preference and is shown a new set of
choices with other configurations; and again; and again. Through the choices it is
possible to determine how much value the respondent puts on the individual
features. The outcome: a series of value-drivers and the value potential customers
put on them in the new market.
PRICE INCREASE IMPLEMENTATION
Prices should not be static. Quite the contrary, it is best practice to adjust prices
upwards regularly, at least in line with competition and inflation, but often also
higher thanks to brand innovations.
Quite often overlooked when pricing a market launch is what happens next year.
Or the year after? Make a plan for how prices should evolve over time in the new
market. Do you start high and then gradually lower the price as the product
matures or becomes obsolete? or do you start low and then introduce price
increases?
The answer should really lie in what the expected willingness-to-pay is over time.
In most businesses and industries, it is likely to be a more solid strategy to start
high and then over time reduce the price is necessary. This is often associated
with human psychology, where it is easier to accept a price reduction than a price
increase. Especially start-ups get this wrong, where they value themselves too
low to begin with, and then struggle to increase prices later. But also big
corporations get it wrong from time to time.
INTERNATIONAL PRICE MANAGEMENT
Prices vary across countries. Understand differences in willingness-to-pay per

market and set prices accordingly.
Actually, in most industries there is a marked difference in prices between

countries. This for a good reason: customers are willing to pay a higher price in
some markets than others. So while it can in certain instances be tempting to
introduce a single, global price to simplify IT systems or manage customers who
exploit price differences, the upside and benefit from differentiated pricing
around the world is significant. So don't fall in the trap of harmonizing prices.
ASSORTMENT OPTIMIZATION
Use market research to understand the differences in willingness-to-pay across

all items in an assortment, and optimize both prices and range.
How many products or services in an assortment, and their individual prices, are
challenges faced by many brand managers, product managers, or customer insight
executives. willingness-to-pay research can reveal how customers see the
individual items in the assortment, and how they would choose between them.
Solve different pricing challenges:
 Test willingness-to-pay a premium for brand extensions.
 Determine the ideal number of items in the assortment
 Test price anchoring effects
 Understand willingness-to-pay segments/groups.
PROMOTIONAL OPTIMIZATION
Understand consumers' potential reaction to different promotional mechanisms
or discount levels, and optimize the overall revenue.
Discounting and promotions are prevalent in most industries. Running a
promotion or giving a discount can, when done properly, deliver incremental sale
or help gaining access to new customers.
Pricing Strategy of HUL

Pricing is a very powerful tool in the marketing, company use the pricing in the
different way to achieve marketing objectives. Pricing strategy adopted over the
medium to long term to achieve marketing objectives. Pricing strategy has a
significant impact on marketing strategy. HUL is a market leader in Indian
consumer products they are producing the brands personal care, homecare and
food and beverages, many variety of products they are producing with a
reasonable prices .HUL adopted pricing strategy to improve their conditions.
Simple pricing policy of low cost products- Hindustan uniliver mainly believes
in their products they are producing the consumer friendly products so it increase
huge amount of sales so they decided to kept a simple pricing policy of low cost
product for example sun silk sachets at Rs 1 like that, so that product rich a wider
market. But they have not compromised with quality of products but they are cut
down the cost of the products because of its extensive and long way reaching of
distribution policy.
Competitive pricing policy- HUL has maintained competitive pricing policy for
some of its products. Competitive pricing policy is setting the price of the product
based on competition of that particular products, this policy is used when a two
company produce the similar kind of products. As soon as increase or decrease
in the competition of the product, price is charged on the base of competition.
Offers Brand- HUL is an a wide consumer goods producer , so it try to offer

many brand with variety of products at numerous price .for example their
personal care brand , home care and food and beverage brands offers different
verity of products. So it will help consumer to buy any one of product according
to his or her own financial capability.
Discount Offer- Now a day’s consumer are give the more importance to discount
before purchasing any product they first see where discount is available. In HUL
tries to maintained balance of the market in the name of discount, they offer
discount for their products, for example 200gm of surf excel free with one kg of
that products. So it automatically reduced price of the product and consumer are
eager to buy the product at discount rate so sale will increase.
All income groups of people- HUL adopted pricing strategy it is suitable to all
income group of people like high income, low and medium income group of
people, for example low income group of people like rural people hul producing
small unit of product like small lifebuoy soap at RS 5 like that.
Offers Volume point to Price point Packages- Rural consumer are price
sensitive and they expect value for money, if they buy any product they expect
satisfaction from that product. Mainly rural customer are purchasing the small
unit of product because for their income level or family condition. So HUL offers
small quantity of products with a reasonable price so it attracts the rural consumer
towards products. They are purchasing the small unit of product but they are
regular customer of those products.
Create markets for premium products- premium pricing strategy is a setting
price of the products higher than the similar products. It increase the maximum
profit in are where the consumer are happy to pay higher prices, HUL created
market for a premium product .for urban people HUL decided to produce huge
unit of product at a high price because they are able to pay more for their
satisfaction. For the purpose of rural consumer it offering sachets so they can
purchase what they want at reasonable prices. For example lux soap at Rs 5 and
ponds gold cream at Rs 5 etc.
PRICING STRATEGY OF COCA COLA
The amount of money charged for a product or service, or sum of the values that
Consumers exchange for the benefits of having or using the product or services.
As price gives us the profit so this P is very important for business price of product
should be that which gives maximum benefit to the company and which gives
maximum satisfaction to the customer.
Following factors Coca Cola kept in mind while determining the pricing strategy.
➢ Price should be set according to the product demand of public.
➢ Price should be that which gives the company maximum revenue.
➢ Price should not be too low or too high than the price competitor is charging
from
their customers otherwise nobody will buy your product.
➢ Price must be keeping the view of your target market.
The price of Coca Cola, despite being market leader is the same as that of its
competitor
Sometimes, Pepsi places its customers into some psychological pricing strategies
by reducing a high priced bottle and consumers think that they save a lot of money
from this.
PRICES OF DIFFERENT BOTTLES:

Size of Coca Cola Price of Coca Cola (RS.)
Regular bottle 13
Non returnable or disposable bottle 30
1.5 liter bottle 70
2.25 liter bottle 90
Coca Cola can 40
PRICING STRATEGIES:
Coca Cola has intense competition with Pepsi so its pricing can’t exceed too much
nor decrease too much as compared to the price of Pepsi Cola. If price of the Coca
Cola exceed too much from the Pepsi then people will shift to the Pepsi Cola and
on the other hand if the price of Coca Cola decreases people might get the
impression that its quality is also low.
PROMOTIONAL PRICING POLICY

Coca Cola has offered promotional prices very frequently. Especially on some
occasion Coca Cola reduces its rates like in Ramadan Coca Cola reduces its rate
unto 5 Rupees on 1.5 liter bottle.
MARKET PENETRATION PRICING POLICY

In an economy like that of Pakistan, consumers tend to switch towards a low
priced product. Coca Cola’s objective is to target every consumer of the country
so Coca Cola has to set its prices at such a level which no one can offer to its
consumers. That is why Coca Cola charges the same prices as are being charged
by its competitors. Otherwise, consumers may go for Pepsi Cola in case of
availability of Coca Cola at relatively high price.
DISTRIBUTION CHANNEL
Coca Cola Company makes two types of selling
➢ Direct selling
➢ Indirect selling
DIRECT SELLING
In direct selling they supply their products in shops by using their own transports.
They have almost 550 vehicles to supply their bottles. In this type of selling
company have more profit margin.
INDIRECT SELLING
They have their whole sellers and agencies to cover all area. Because it is very
difficult for them to cover all area of Pakistan by their own so they have so many
whole sellers and Agencies to assure their customers for availability of Coca Cola
products.
List of Major FMCG Companies in India
The Indian FMCG sector is the fourth largest in the economy and has a market
size of US$13.1 billion. Well-established distribution networks, as well as intense
competition between the organised and unorganised segments are the
characteristics of this sector. FMCG in India has a strong and competitive MNC
presence across the entire value chain. It has been predicted that the FMCG
market will reach to US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The
middle class and the rural segments of the Indian population are the most
promising market for FMCG, and give brand makers the opportunity to convert
them to branded products. Most of the product categories like jams, toothpaste,
skin care, shampoos, etc, in India, have low per capita consumption as well as
low penetration level, but the potential for growth is huge. The Indian Economy
is surging ahead by leaps and bounds, keeping pace with rapid urbanization,
increased literacy levels, and rising per capita income.The big firms are growing
bigger and small-time companies are catching up as well. According to the study
conducted by AC Nielsen, 62 of the top 100 brands are owned by MNCs, and the
balance by Indian companies. Fifteen companies own these 62 brands, and 27 of
these are owned by Hindustan Lever. Pepsi is at number three followed by Thums
Up. Britannia takes the fifth place, followed by Colgate (6), Nirma (7), Coca-
Cola (8) and Parle (9). These are figures the soft drink and cigarette companies
have always shied away from revealing. Personal care, cigarettes, and soft drinks
are the three biggest categories in FMCG. Between them, they account for 35 of
the top 100 brands. The companies mentioned in Exhibit I, are the leaders in their
respective sectors. The personal care category has the largest number of brands,
i.e., 21, inclusive of Lux, Lifebuoy, Fair and Lovely, Vicks, and Ponds. There are
11 HLL brands in the 21, aggregating Rs. 3,799 crore or 54% of the personal care
category. Cigarettes account for 17% of the top 100 FMCG sales,
and just below the personal care category. ITC alone accounts for 60% volume
market share and 70% by value of all filter cigarettes in India.
The Top 10 Companies in FMCG Sector

The foods category in FMCG is gaining popularity with a swing of launches by
HLL, ITC, Godrej, and others. This category has 18 major brands, aggregating
Rs. 4,637 crore. Nestle and Amul slug it out in the powders segment. The food
category has also seen innovations like softies in ice creams, chapattis by HLL,
ready to eat rice by HLL and pizzas by both GCMMF and Godrej Pillsbury. This
category seems to have faster development than the stagnating personal care
category. Amul, India's largest foods company, has a good presence in the food
category with its ice-creams, curd, milk, butter, cheese, and so on. Britannia also
ranks in the top 100 FMCG brands, dominates the biscuits category and has
launched a series of products at various prices. In the household care category
(like mosquito repellents), Godrej and Reckitt are two players. Goodknight from
Godrej, is worth above Rs 217 crore, followed by Reckitt's Mortein at Rs 149
crore. In the shampoo category, HLL's Clinic and Sunsilk make it to the top 100,
although P&G's Head and Shoulders and Pantene are also trying hard to be
positioned on top. Clinic is nearly double the size of Sunsilk. Dabur is among the
top five FMCG companies in India and is a herbal specialist. With a turnover of
Rs. 19 billion (approx. US$ 420 million) in 2005-2006, Dabur has brands like
Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. Asian Paints is
enjoying a formidable presence in the Indian sub-continent, Southeast Asia, Far
East, Middle East, South Pacific, Caribbean, Africa and Europe. Asian Paints is
India's largest paint company, with a turnover of Rs.22.6 billion (around USD
513 million). Forbes Global magazine, USA, ranked Asian Paints among the 200
Best Small Companies in the World Cadbury India is the market leader in the
chocolate confectionery market with a 70% market share and is ranked number
two in the total food drinks market. Its popular brands include Cadbury's Dairy
Milk, 5 Star, Eclairs, and Gems. The Rs.15.6 billion (USD 380 Million) Marico
is a leading Indian group in consumer products and services in the Global Beauty
and Wellness space. There is a huge growth potential for all the FMCG companies
as the per capita consumption of almost all products in the country is amongst the
lowest in the world. Again the demand or prospect could be increased further if
these companies can change the consumer's mindset and offer new generation
products. Earlier, Indian consumers were using non-branded apparel, but today,
clothes of different brands are available and the same consumers are willing to
pay more for branded quality clothes. It's the quality, promotion and innovation
of products, which can drive many sectors.
List of major FMCG Companies in India Segment Wise
• Hindustan Unilever Limited : Hindustan Unilever Limited (abbreviated to

HUL), formerly Hindustan Lever Limited , is India's largest consumer products
company and was formed in 1933 as Lever Brothers India Limited. 18,079 hits
• ITC Ltd. : ITC is one of India's foremost private sector companies with a market
capitalisation of nearly US $ 15 billion and a turnover of over US $ 4.75 billion.
12,231 hits
• Nestle India : Nestl India is a subsidiary of Nestl S.A. of Switzerland. 9,603
hits
• Britannia Industries Ltd : Biscuits, bread, cakes, dairy products 8,415 hits
• Emami Limited : Personal care, beauty care, health care 7,216 hits
• Colgate-Palmolive (India) Limited : Oral care, personal care, skin care products
6,777 hits
• Dabur India Limited : Consumer care products, ayurvedic specialities 6,487
hits
• Radico Khaitan Limited : Radico Khaitans product range comprises whiskey,
rum, vodka, gin, and brandy. Brands include 8PM Whiskey, Contessa Rum, Old
Admiral Brandy, and Magic Moments Vodka, amongst others. 6,479 hits
• Nirma Limited : Nirma is one of the few names - which is instantly recognized
as a true Indian brand 6,476 hits
• Procter & Gamble Hygiene and Health Care Limited : Health care, feminine
hygiene products 6,476 hits
Hindustan Unilever Limited
History
Hindustan Lever Ltd (HLL) is India's largest and highly progressive company in
FMCG sector. HLL's brands like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair &
Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond,
Kissan, Knorr-Annapurna, Kwality Wall's are household names across the
country and span a host of categories, such as soaps, detergents, personal
products, tea, coffee, branded staples, ice cream and culinary products. These
products are manufactured over 40 factories across India and the associated
operations involve over 2,000 suppliers and associates. Hindustan Lever
Limited's distribution network comprises about 4,000 redistribution stockists,
covering 6.3 million retail outlets reaching the entire urban population, and about
250 million rural consumers. HLL is also one of India's largest exporters. It has
been recognised as a Golden Super Star Trading House by the Government of
India. Presently, HLL has over 16,000 employees including over 1,200 managers.
Its mission is to "add vitality to life." The Anglo-Dutch company Unilever owns
a majority stake in Hindustan Lever Limited. Hindustan Unilever Limited (HUL),
a 52%-owned subsidiary of Anglo-Dutch giant Unilever, has been working its
way into India since 1888, when it started selling its products there. As India's
largest consumer goods firm, HUL markets more than 400 brands that include
beverages, food, and home and personal care goods. Some of its names include
Kwality Wall's ice cream, Sunlight dish detergent, Lifebuoy soap, Lipton tea,
Pepsodent toothpaste, and Surf laundry detergent. HUL markets atta (a type of
meal), maize, rice, and salt, and its export division ships castor oil and fish. The
company also sells bottled water and over-thecounter healthcare items. It licenses
its Lakmé and Lever Ayush brands. Hindustan Lever Limited (HLL) is India's
leading consumer goods supplier, with a focus on the Fast-Moving Consumer
Goods (FMCG) category that includes detergents, soap, shampoo, deodorant,
toothpaste, and other personal care items, and cosmetics. HLL's personal care
brands include soap brands such as Lux, Lifebuoy, Liril, Breeze, Dove, Pear's,
and Rexona; shampoos and hair coloring brands including Sunsilk Naturals and
Clinic; skin care brands Fair & Lovely and Pond's; and oral care brands Pepsodent
and Close-Up. The company's cosmetic line is led by the Lakme brand; HLL also
produces a line of Ayurvedic personal and healthcare items under the Ayush
brand. In addition to the FMCG segment, HLL has developed a line of food items,
primarily under the Kissan and Knorr Annapurna brands, as well as the ice cream
brand Kwality Wall's. In the early 2000s, HLL also acquired baked goods
producer Modern Food Industries. In addition to its domestic brand family, HLL
sells bulk foods, including maize, rice, salt, and atta. HLL is also an active
exporter, shipping its FMCG and food brands, as well as rice; marine products
including surimi, shrimp, crabsticks, and others; and castor oil. HLL has
completed a restructuring of its business in the first half of the 2000s, streamlining
its brand portfolio, from 110 brands to 35 "power" brands, while exiting a number
of businesses, such as teas (sold to the Woodbriar Group in 2006) and specialty
chemicals. HLL maintains a strong manufacturing presence in India, with some
80 factories located throughout the country; the company also subcontracts to
more than 150 third-party producers. HLL is itself a subsidiary of Unilever, which
controls 51.55 percent of the group. Hll is listed on the mumbai stock exchange.
(i) Indian manufacturing base starting in 1931: England's Lever Brothers

began importing their Sunlight brand soap into India in the late 1880s. By 1895,
Lever had introduced another of its brands, Lifebuoy, which became the
company's longest-running successful brand in India. Other Lever brands
followed into the beginning of the next century, including the Lux soap flake
brand in 1905; and scouring powder Vim as well as soap brand Vinolia in 1913.
Lever Brothers, by then well into an international expansion that would see the
company become one of the world's top multinationals, also acquired and
introduced a number of other brands into the Indian market, including Pear's soap,
in 1917. By 1930, Lever Brothers, which also had entered areas such as food
production, including edible oils and margarine, had merged with The
Netherlands' Margarine Unie, forming Unilever. Unilever's Indian sales were
based on imports into the early 1930s. The company had begun planning,
however, to establish a manufacturing presence in the Indian subcontinent as
early as 1923. The company began talks with the British and Indian authorities,
and finally received permission to build its first factory in 1931. In that year, the
company incorporated a new subsidiary, Hindustan Vanaspati Manufacturing
Company, to produce edible oils. That company opened a production facility in
Sewri in 1932. Two years later, the company added another subsidiary, Lever
Brothers India Limited, for the production of soap, and began construction of a
factory next to its Vanaspati facility. That company launched production of
Sunlight-branded soap at a factory in Bombay in 1934. In that year, as well, the
company took over production at the Calcutta factory of another company,
Northwest Soap, where it began producing the Lever brand family. That factory,
known as the Garden Reach factory, added production of a line of personal care
products in 1943. In 1935, Unilever added a third subsidiary in India, United
Traders Limited. This unit was created to provide marketing support for the
company's other operations, tailoring the group's sales to the specifics of the
Indian population. Through the 1940s, Unilever's Indian unit began extending its
sales 219 network throughout India, building up its own sales team, and adding
sales offices in Mumbai, Chennai, Calcutta, Karachi, and elsewhere. The
transition of Unilever's multiple businesses to the single Hindustan Lever Limited
began in the 1940s. In 1944, the three Indian companies were reorganized under
a unified management. Nonetheless, the companies retained separate sales and
marketing businesses. In the meantime, the company had launched an effort to
transition the company from one led almost entirely by foreign and, in large part,
European management, to one staffed primarily by Indians. This effort began in
1942, when the company began training Indians for its junior and then senior
management positions. By 1951, the company appointed an Indian, Prakash
Tandon, to the managing director's position. Tandon led the merger of the three
Indian subsidiaries into a single entity, Hindustan Lever Limited (HLL), in 1956.
By the end of the decade, Tandon had taken over the chairman's position as well.
By then, nearly all of the group's management positions were filled by Indians.
HLL was then taken public, as Unilever reduced its stake in the company in favor
of domestic shareholders. By 1980, Unilever's stake in HLL had dropped to less
than 52 percent. HLL already produced a wide range of consumer goods for the
Indian market by the early 1960s. In 1962, the company launched its own export
operations as well, in a move made in part to bring foreign exchange capital into
the struggling Indian economy. HLL's exports reflected the company's own
multifaceted operations. In addition to producing and supplying raw materials
and finished products, including a number of specialty chemicals and tea, in the
support of the international Unilever brand family, HLL also developed a bulk
goods export business. For this the company focused on Indian-specific goods,
such as castor oil, Basmati rice, and a variety of marine products, including
shrimp and surimi. HLL set up a new headquarters in Mumbai in 1963. The
following year, the company entered the dairy industry, establishing its Etah dairy
and launching the Anik brand of ghee (a prepared butter product used in Indian
cooking). The company also began producing animal feed that year. Meanwhile,
HLL launched a new shampoo, Sunsilk, for the Indian market. By the end of the
decade, HLL had launched a number of other successful brands, including Signal
toothpaste, Taj Mahal tea, Bru coffee, and Clinic shampoo, launched in 1971. By
then, 220 the company had firmly established itself as the leading producer of so-
called "fast-moving consumer goods." Part of the company's success came from
its highly active sales network. A significant proportion of India's population,
which would top one billion before the dawn of the 21st century, still lived in
rural regions and in extreme poverty. For much of this population, personal care
products remained luxury items. Yet the company recognized the importance of
building its brands in this region as well, and as such the company developed a
vast sales network. Much of this network was based on an army of independent,
direct sales agents, who hawked the company's products in the country's more
than 150,000 villages. Into the 1970s, HLL also began diversifying beyond its
consumer goods operations. The company opened the Hindustan Lever Research
Center, in Mumbai, in 1967. This led the group to begin producing fine chemicals
in 1969. By 1971, the company had received permission from Unilever to enter
the production of industrial chemicals. The company began construction of a pilot
plant for this operation in Taloja in 1974. This unit was completed in 1976. In
that year, HLL launched the construction of a larger chemicals complex, at
Haldia. That facility began producing sodium tripolyphosphate in 1979. The
production of these chemicals enabled HLL to begin producing synthetic
detergents at Jammu in 1977. Through the 1980s, HLL continued to develop its
businesses. In 1986, the company set up an agriproducts business, based in
Hyderabad, which began producing hybrid seeds that year. HLL also added a new
soap production facility in Khamgaon, and a personal products factory in
Yavatmal that year. HLL's growth had nonetheless been limited by restrictions
put into place by the Indian government's quasi-socialist economic policies. In
1991, however, in the face of a major economic crisis, the government was forced
to liberalize the country's economy. This opened up a new era of opportunity for
HLL.
(ii) Power brand focus into the 21st century: A major step forward for the
group came in 1993, when the company acquired its leading rival, Tata Oil Mills.
By then, HLL also had met with success in the detergents category, with the
launch of its Surf Ultra brand. This brand targeted the country's middle class,
which, with the liberalization of the country's economy, was also becoming one
of the fastest growing segments of India's population. In a further move to target
this population, the company launched a new, high-end detergent brand, Surf
Excel, in 1996. By the mid-1990s, HLL's revenues had topped $540 million. The
company also had launched its first foreign subsidiary, establishing Nepal Lever
Limited. That unit began producing soaps and detergents and other products
within the HLL brand family, both for the Indian and Nepal market, as well as
for the larger export market. HLL also began developing a series of joint venture
partnerships in the 1990s. In 1995, the company teamed up with Tata, this time
forming a 50-50 joint venture with Tata's Lakme cosmetics group. HLL bought
the Lakme brand family just three years later, taking full control of Lakme Lever.
By then, the company also had formed a joint venture with Kimberly-Clark,
which began marketing the Huggies diaper and Kotex sanitary pad brands in
India. HLL also deepened its food brands during the 1990s and into the 2000s.
The company acquired Kwality and Milkfood, which included the Kwality Wall's
ice cream brand. In 2000, HLL marked the beginning of a new era in India's
economy, when it acquired 74 percent of Modern Food Industries Limited. A
major baked goods business in India, Modern Food had previously been owned
by the Indian government, and marked HLL's extension into an entirely new
product category. HLL subsequently acquired full control of Modern Food in
2002. The first half of the 2000s nonetheless represented a difficult period for the
company, which was faced with an economic slowdown in its core Indian
markets. At the same time, HLL underwent a dramatic restructuring as part of the
parent company's global "power brand" strategy. The company began
streamlining its brand portfolio, which had grown to some 110 brands by the
beginning of the decade, cutting that number back to just 35 brands by middecade.
As part of this refocus, HLL also began selling off its noncore operations,
including its chemicals businesses. That process was completed in large part with
the sell-off of the last of HLL's tea plantation and production units, Tea Estates
India, which was sold to a subsidiary of the Woodbriar Group in 2006. By then,
HLL appeared to have once again moved into a growth phase, posting revenue
gains of 9 percent, and net profit growth of some 23 percent, over the previous
year. HLL also prepared to enter a new management era; in 2006, the company
appointed Douglas Baillie, who previously headed Unilever's operations in
Africa, as the company's CEO. That appointment placed a non-Indian at the head
of the company for the first time in more than 40 222 years. HLL appeared certain
to clean up in India's consumer goods market for decades to come. In February
2007, the company has been renamed to "Hindustan Unilever Limited" to strike
the optimum balance between maintaining the heritage of the Company and the
future benefits and synergies of global alignment with the corporate name of
"Unilever". Hindustan Unilever Limited has informed that Mr. Sanjiv kakkar,
Executive Director, Sales & Customer Development has been appointed
Chairman, Unilever Russia, Ukraine and Belarus (RUB), with effect from 1st
September, 2008. HUL completes 75 years on 17th October 2008 (iii) principal
subsidiaries: Bon Limited; Daverashola Tea Company Limited; Hindlever Trust
Limited; Indexport Limited; Indigo Lever Shared Services Limited; International
Fisheries Limited; KICM (Madras) Limited; Kimberly-Clark Lever Private
Limited (50%); Lever India Exports Limited; Levers Associated Trust Limited;
Levindra Trust Limited; Lipton India Exports Limited; Merryweather Food
Products Limited; Modern Food and Nutrition Industries Limited; Modern Food
Industries (India) Limited; Nepal Lever Limited (Nepal) (80%); Ponds Exports
Limited; Quest International India Limited (49%); Thiashola Tea Company
Limited; TOC Disinfectants Limited. (iv) Principal competitors: Nirma Ltd.;
Jocil Ltd.; Nahar Industrial Enterprises Ltd.; Shrihari Laboratories P Ltd.; Ruchi
Infrastructure Ltd.; Procter & Gamble Hygiene and Healthcare Ltd.; Amrit
Banaspati Company Ltd.; Henkel SPIC India Ltd.; K S Oils Ltd.; Ultramarine
and Pigments Ltd.; Vashisti Detergents Ltd., Nestle, Colgate – Palmolive Ltd,
Godrej Consumers and many other local players in Indian markets.
(b) Hindustan Lever Ltd - Products With 400 brands spanning 14 categories of
home, personal care and foods products, no other company touches so many
people's lives in so many different ways. Brand portfolio has made us leaders in
every field in which we work. It ranges from much-loved world favourites
including Lipton, Knorr, Dove and Omo, to trusted local brands such as Blue
Band and Suave. From comforting soups to warm a winter's day, to sensuous
soaps that make customers feel fabulous, and products help people get more out
of life. HUL is constantly enhancing its brands to deliver more intense, rewarding
product experiences. It invests nearly €1 billion every year in cutting-edge
research and development, and has five laboratories around the world that explore
new thinking and techniques to help develop products. Consumer research plays
a vital role in its brands' development. They are constantly developing new
products and developing tried and tested brands to meet changing tastes, lifestyles
and expectations. And our strong roots in local markets also mean they can
respond to consumers at a local level. By helping improve people's diets and daily
lives, can help them keep healthier for longer, look good and give their children
the best start in life. There is a big list of products of this company and explained
below:
(i) Health & personal care
• First launched in France in 1983, leading male grooming brand, Axe, now gives
guys the edge in the mating game in over 60 countries
• Oral care brands Mentadent, Peposodent and Signal have teamed up with the
world's largest dental federation, the FDI, which represents over 750 000 dentists
around the world
• Lux became the first mass-marketed soap when it launched in 1924. Today it
achieves annual global sales of over €1 billion
• Domestos is a best-selling brand in nine of the 35 countries in which it's sold
• Recent breakthroughs at Rexona include Rexona Crystal, a deodorant that
eliminates unsightly white deposits on dark garments
• Small & Mighty concentrated liquid fits into a smaller bottle, requiring half the
packaging, water and lorries to transport it, making it kinder on the environment
• Hindustan Unilever in India has launched a hand-wash product, Surf Excel
Quick Wash, with a low foaming formulation, reducing the amount of water
needed for rinsing by up to two buckets per wash.
(ii) Foods
• Knorr is our biggest food brand with a strong presence in over 80 countries and
a product range including soups, sauces, bouillons, noodles and complete meals
• Lipton's tea-based drinks include the international Lipton Iced Tea range, the
Lipton range in North America and Lipton Yellow Label, the world's favourite
tea brand
• Becel/Flora pro.activ products have been recognised as the most significant
advancement in the dietary management of cholesterol in 40 years • In the mid-
1990s it led the industry with a programme to eliminate almost all trans fat from
margarine • World's largest ice cream manufacturer, thanks to the success of
Heartbrand which includes Magnum, Cornetto, Carte d'Or and Solero, and Ben
& Jerry's and Breyers in the US. (c) Hindustan Lever Limited - SWOT Analysis
Hindustan Unilever Limited (HUL) is a packaged mass consumption fast moving
consumer goods (FMCG) company based in India. It offers foods, beverages,
home care and personal care products. The company primarily operates in India.
It is headquartered in Mumbai, India and employs 41,000 people. Since long it is
leader in India FMCG market and position is going day by day stronger. It has a
large number of world renowned brands in its portfolio. The customers are
scattered in urban, suburban and rural areas in India. A vast territory is covered
by this company and still there is great potential for further development. SWOT
analysis of this sector is carried as follows:
Strengths:
• HUL has its subsidiaries across the world and has production, marketing and
research facilities across the world. The distribution network of this company is
very strong since long.
• Profit generated every year so reserves are of huge amount for further
developments
• Leader in the market with high market shares.
• Supported with advance technology and cooperative manpower. Weaknesses:
• Export of its products is low because it has its units across the world.
• There is no major weakness of the company in India.
Opportunities:
• Indian market is very large and still it is uncovered. 225
• Export potential is there and can be utilized.
• Opportunity for boosting sales and revenue is very good.

• Low cost operations in India due to availability of raw materials and cheap
labour costs. Threats:
• Imports from China at lower cost creating difficulty.
• Government policies and tax regulation are necessary to be implemented.
• Slowdown in demand due to local factors in India economy.
• From internal and external foreign player tough competition is being faced.
(d) Hindustan Unilever Limited - Recent Performance The competition level in

Indian FMCG sector is very high. The competition is faced from MNCs and local
players strongly. Heavy expenses are made on advertising and other promotional
methods for promoting their brands to gain product awareness, customer base,
and their shares of the customers’ wallets. To facilitate launch new products and
re-launch of existing products companies are increasing their research and
development expenditure. The research and development, and promotional
efforts add to the costs of the company and lower the profitability of the company.
HUL has consistently been the top advertisement spender over the years with
expenditure of Rs 650 crore in the year 2008. Second largest spending is Rs 240
crore by a telecom company. P&G India and Colgate-Palmolive, other FMCG
players, also feature in the top 10 advertisers list. HUL has increased its
advertising expenses by 26.56% in CY'07.Also the money spent in Research and
Development which facilitates new product launches and re-launches of existing
products has seen a raise by 38.16% in the same year. Harish Manwani, Chairman
commented that in an environment of heightened competitive intensity we have
accelerated volume growth, ahead of market. Broad based actions have been
taken to enhance competitiveness of our brands, build new segments, expand
offerings in Foods and improve the overall quality of our innovations and speed
to market. These initiatives have started to yield positive results
(i) For quarter ended March 2010: The net sales for Q4 have increased by 8% to
Rs 4380.24 crore including the other operating income of Rs 64.49 crore. Other
operational income includes charge of Rs 0.19 crore on account of foreign
exchange Mark to Market (MTM) valuation of open forward contracts &
monetary items. Domestic Consumer and FMCG business grew 8%, driven by
strong 11% volume growth. Growth was broad based across Home and Personal
Care (HPC) and Foods and in aggregate, ahead of reported market growth. HPC
business grew 5.5%, with strong volume growth in Soaps, Laundry Powders and
Personal Products. Amidst heightened competitive intensity in the Laundry
category, proactive and decisive actions were implemented and these helped
deliver double-digit volume growth in both Rin and Wheel powder. Portfolio
rejuvenation in Personal Wash category has yielded positive results with robust
volume growth in the premium and popular segment. Personal Products grew
19%, delivering strong volume growth for the fourth successive quarter. All
segments including Hair, Oral and Skin care registered robust volume growth.
Leadership in Shampoo segment was further strengthened, driven by innovations
behind Dove and Clinic Plus. In Oral, toothpaste growth was ahead of market,
with both Pepsodent and Close-up growing double digit. In Skin care, sales
growth was well ahead of market with continued focus on market development
and expansion into new segments of the future. A significant entry into the male
grooming segment was made through the launch of Vaseline Menz. The Facial
cleansing portfolio was expanded, driven by multiple variants under Dove, Ponds,
Pears and Lakme. Market share improved in the fast growing premium fairness
and anti ageing segment. Foods business grew at 18% largely driven by volume.
All segments in Foods viz Tea, Coffee, Processed Foods and Ice creams have
grown in double digit. The Tea portfolio now straddles the consumer pyramid
with the launch of nutritional tea - Brooke Bond Sehatmand in the mass segment.
Knorr soupy noodles herald entry into the attractive noodles market, with a
unique offering combining the taste of noodles with the health of soup. Kissan
and Annapurna brands continued their strong growth. Ice-cream grew 22% led
by strong innovations for the summer season. Swirl's parlours continue to offer a
unique Ice Cream consumption experience with 100 parlours now in operation
nationally.
Pure-it continued its strong growth momentum. Pure-it Compact was launched at
an attractive price of Rs 1000. This innovation makes Pure-it accessible to a larger
group of consumers without any compromise to the standard of water purity.
OPM declined by 110 basis points to 13.6% due to rise in ASP cost by 260 basis
points to 14% and purchased of goods by 180 basis points to 15% of adjusted net
sales. New innovations, entry into new segments and competitive brand support
led to A&P expenditure However, there was a fall in raw material/packaging cost
by 50 basis points to 38%, staff cost by 50 basis points to 5% and other
expenditure by 170 basis points to 15% of adjusted net sales. As a result,
operating profit remained stagnant at Rs 595.48 crore. Other income increased by
40% to Rs 28.41 crore, which includes interest income, dividend income and net
gain on sale of other nontrade investments. Depreciation saw a rise of 22% to Rs
50.29 crore. Profit before tax before exceptional item remained stagnant at Rs
573.46 crore. There was an exceptional income of Rs 143.39 crore, which include
profit on sale of properties Rs 5.47 crore, profit on sale of long term trade
investments Rs 91.10 crore, reduction in provision for retirement benefits of Rs
53.36 crore arising out of change in actuarial assumptions (net of impact on
account of increase in gratuity limits), restructuring costs of Rs 6.53 crore. As a
result, the profit before tax after exceptional items has inclined by 54% to Rs
716.85 crore. Tax outgo has increased by 164% to Rs 187.76 crore. There was an
extraordinary items of Rs 52.11 crore which is writeback of provision against
advances to and diminution in the value of Investments in Bon Ltd. The net profit
has increased by 47% to Rs 581.20 crore due EO incomes. (ii) For FY10: The net
sales for FY10 have increased by 6% to Rs 17725.33 crore including the other
operating income of Rs 201.53 crore. Other operational income includes charge
of Rs 56.33 crore on account of foreign exchange Mark to Market (MTM)
valuation of open forward contracts & monetary items. Domestic Consumer
business grew 8.6%. OPM has inclined by 29 basis points to 15.5% due fall in
raw material/packaging cost by 220 basis points to 37%, purchase of goods by 40
basis points to 13%, staff cost by 30 basis points to 5% and other expenditure by
110 basis points to 16% of adjusted net sales. However, there was rise in
advertising & promotion (A&P) cost by 350 basis points to 13% of adjusted net
sales. As a result, operating profit has inclined by 8% to Rs 2749.97 crore. Other
income 228 declined by 19% to Rs 148.11 crore. Interest cost has decreased by
68% to Rs 6.98 crore while depreciation inclined by 16% to Rs 184.03 crore.
Profit before tax before exceptional items increased by 6% to Rs 2707.07 crore.
Exceptional items income stood at Rs 55.45 crore. As a result, the profit after tax
after exceptional item increased by 9% to Rs 2762.52 crore. Total tax paid has
increased by 49% to Rs 616.37 crore. There was an EO income (net of taxes) of
Rs 55.88 crore. The net profit inclined by 4% to Rs 2202.03 crore due to EO
income.
(iii) Segmented result
• Soaps & detergents

The revenue has decreased by 2% to Rs 1978.48 crore for Q4 due to cut in prices
on back of pricing competitative pressure. PBIT margins had declined by 380
basis points to 12.8%. As a result, PBIT had decreased by 24% to Rs 252.73 crore.
The category contributed around 45% to the revenues while the contribution to
PBIT stood at 42%. The revenues for FY10 grew by 1% to Rs 8265.64 crore.
PBIT margins had declined by 99 basis points to 14.3%. As a result, PBIT had
decreased by 5% to Rs 1185.27 crore. The category contributed around 49% to
the revenues while the contribution to PBIT stood at 42%.
• Personal care
The revenues grew 19% to Rs 1255.21 crore for the Q4. PBIT margin have
decreased by 90 basis points to 21.8%. Despite it, there was increase in PBIT by
14% to Rs 273.37 crore. The category contributed around 29% to the revenues
while the contribution to PBIT stood at 45%. The revenues grew 16% to Rs
5047.9 crore for FY10. PBIT margin have decreased by 140 basis points to
25.7%. Despite it, there was increase in PBIT by 10% to Rs 1296.52 crore. The
category contributed around 26% to the revenues while the contribution to PBIT
stood at 46%.
• Beverages
The sales grew by 15% during the quarter to Rs 570.16 crore. The segment
contributed 13% to the total revenues. PBIT margin has inclined by 60 basis
points to 13.8%. As a result, PBIT increased by 21% to Rs 78.96 crore. It
contributes 13% to the total PBIT. The sales for FY10 229 grew by 15% to Rs
2142.43 crore. The segment contributed 11% to the total revenues. PBIT margin
has inclined by 130 basis points to 14.9%. As a result, PBIT increased by 26% to
Rs 319.75 crore. It contributes 11% to the total PBIT.
• Processed foods
The sales have increased by 23% to Rs 197.57 crore for Q4. PBIT margin turn
positive to 4% as a result, there was PBIT of Rs 7.9 crore. The sales grew by 11%
to Rs 730.78 crore for the FY10. PBIT margin turn positive to 0.6% as a result,
there was PBIT of Rs 4.44 crore. • Ice-creams The sales grew by 22% to Rs 55.3
crore for the Q4. PBIT margin is remained negative, as a result there was loss
before interest and tax of Rs 1.57 crore. The sales grew by 16% to Rs 231 crore
for FY10. PBIT margin is declined by 10 basis points to 5.5%, despite it the PBIT
has increased by 14% to Rs 12.69 crore.
• Export revenue
Export revenues increased by 16% to Rs 255.51 crore for the Q4. Margin declined
by 130 basis points to 5.2%. As a result, there was a decline in PBIT by 7% to Rs
13.34 crore. The category contributed around 6% to the revenues while the
contribution to PBIT stood at 2%. The export revenues decreased by 15% to Rs
1005.25 crore for the FY10. Margin declined by 190 basis points to 5.8%. As a
result, there was a decline in PBIT by 35% to Rs 58.58 crore. The category
contributed around 7% to the revenues while the contribution to PBIT stood at
2%.
• Valuation
The Board proposed a final dividend of Rs 3.50 per share for the financial year
ending March 31, 2010. Together with interim dividend of Rs 3.00 per share the
total dividend for the financial year ending March 31, 2010 amounts to Rs 6.50
per share. The scrip was trading at Rs 231.35 on 26th May 2010 on BSE.
Promoters of the company hold 52.02% stake in the company.
New Model of Consumer Goods
The fast-moving-consumer-goods industry has a long history of generating

reliable growth through mass brands. But the model that fueled industry success
now faces great pressure as consumer behaviors shift and the channel landscape
changes. To win in the coming decades, FMCGs need to reduce their reliance on
mass brands and offline mass channels and embrace an agile operating model
focused on brand relevance rather than synergies.
A winning model for creating value
Perfected mass-market brand building and product innovation. This capability
achieved reliable growth and gross margins that are typically 25 percent above
nonbranded players.
Built relationships with grocers and other mass retailers that provide advantaged
access to consumers. By partnering on innovation and in-store execution and
tightly aligning their supply chains, FMCG companies secured broad distribution
as their partners grew. Small competitors lacked such access.
Entered developing markets early and actively cultivated their categories as

consumers became wealthier. This proved a tremendous source of growth—
generating 75 percent of revenue growth in the sector over the past decade.
Designed their operating models for consistent execution and cost reduction.
Most have increased centralization in order to continue pushing costs down. This
synergy-based model has kept general and administrative expenses at 4 to 6
percent of revenue.
Used M&A to consolidate markets and create a basis for organic growth post
acquisition. After updating their portfolios with new brands and categories, these
companies applied their superior distribution and business practices to grow those
brands and categories.
company rate.
before interest and taxes

Ten disruptive trends that the industry cannot ignore
Why has this FMCG model of value creation stopped generating growth?
Because ten technology-driven trends have disrupted the marketplace so much
that the model is out of touch. Most of these trends are in their infancy but will
have significant impact on the model within the next five years.


Some FMCG categories, particularly homecare, will be revolutionized by the IoT.
We will see the IoT convert some product needs, like laundry, into service needs.
And in many categories, the IoT will reshape the consumer decision journey,
especially by facilitating more automatic replenishment.
Many small consumer-goods companies are capitalizing on millennial

preferences and digital marketing to grow very fast. These brands can be hard to
spot because they are often sold online or in channels not covered by the
syndicated data that the industry has historically relied on heavily.
across categories.
Retailers have also taken notice of these small brands. According to The Nielsen
Company, US retailers are giving small brands double their fair share of new
listings. The reason is twofold: retailers want small brands to differentiate their
proposition and to drive their margins, as these small brands tend to be premium
and rarely promote. As a consequence, small brands are capturing two to three
times their fair share of growth while the largest brands remain flat or in slight
decline.
Five factors make a category ripe for disruption by small brands. High margins
make the category worth pursuing. Strong emotional engagement means
consumers notice and appreciate new brands and products. A value chain that is
easy to outsource makes it much easier for born-digital players to get started and
to scale. Low shipment costs as a percent of product value make the economics
work. And low regulatory barriers mean that anyone can get involved. Most
consumer-goods categories fit this profile.
The beauty category in particular is an especially good fit, so the advanced

explosion of small brands in this category is no surprise. In color cosmetics, born-
digital challenger brands already represent 10 percent of the market and are
growing four times faster than the rest of the segment. The explosion of small
brands in beauty enjoys the support of significant venture-capital investment—
$1.6 billion from 2008 to 2017, with 80 percent of this investment since 2014.
At the same time, digital marketing is fueling this challenger-brand growth while
lifting the rest of the category, as beauty lovers find new ways to indulge in their
passion. An astounding 1.5 million beauty-related videos are posted on YouTube
every month, almost all of them user generated.
We believe that this bellwether category portends well for FMCG incumbents.
After a few challenging years, the incumbent beauty players are responding
effectively and are mobilizing to capitalize on the dynamism in their industry,
particularly through greater digital engagement. They are innovating in digital
marketing and running successful incubators. The year 2016 alone saw 52
acquisitions of beauty-related companies.
Better for you
For years, consumers said that they wanted to eat healthier foods and live
healthier lifestyles, but their behavior did not change—until now. Consumers are
eating differently, redefining what healthy means, and demanding more products
that are natural, green, organic and/or free from sugar, gluten, pesticides, and
other additives. Packaged-food players are racing to keep up, even as consumers
are increasing pressure on the packaged-goods subsector by eating more fresh
food.
E-commerce giants
and toys.
Discounters
Disruption of developing-market category creation: The rise of local competitors

use.

unproven.

more funding.
deliver strong shocks to all categories.
A new model for creating value in a reshaped marketplace
To survive and thrive in the coming decades, FMCG companies will need a new
model for value creation, which will start with a new, three-part portfolio strategy.
Today, FMCGs focus most of their energy on large, mass brands. Tomorrow,
they will also need to leapfrog in developing markets and hothouse premium
niches.
This three-part portfolio strategy will require a new operating model that
abandons the historic synergy focus for a truly agile approach that focuses
relentlessly on consumer relevance, helps companies build new commercial
capabilities, and unlocks the true potential of employee talent. M&A will remain
a critical accelerator of growth, not only for access to new growth and scale, but
also new skills.
Broader, three-part portfolio strategy
Today, most FMCGs devote most of their energy to mass brands. Going forward,
they will need excellence in mass-brand execution as well as the consumer
insights, flexibility, and execution capabilities to leapfrog in developing markets
and to hothouse premium niches.
Sustaining excellence in the developed-market base
Mass brands in developed markets represent the majority of sales for most
FMCGs; as such, they are “too big to fail.” FMCGs must keep the base healthy.
The good news is that the industry keeps advancing functional excellence,
through better technology and, increasingly, use of advanced analytics. The
highest-impact advances we see are revamping media spend, particularly through
programmatic M&A and understanding of return on investment, fine-tuning
revenue growth management with big data and tools like choice models,
strengthening demand forecasting, and using robotics to improve shared services.
Further, FMCGs will need to gather their historically decentralized sales function,
adopting a channel-conflict-resistant approach to sales. They will need to treat e-
commerce as part of their core business, overcome channel conflict, and
maximize their success in omni and e-marketplaces. Players like Koninklijke
Philips that have weathered the laborious process of harmonizing trade terms
across markets are finding that they can grow profitably on e-marketplaces.
Finally, FMCGs will need to keep driving costs down. We are following three
big ideas on cost.
First, zero-based budgeting achieves sustained cost reduction by establishing
deep transparency on every cost driver, enabling comparability and fair
benchmarking by separating price from quality, and establishing strict cost
governance through cost-category owners who are responsible for managing cost
categories across business-unit profits and losses.
Second, touchless supply-chain and sales-and-operations planning replace

frequent sales-and-operations meetings with a technology-enabled planning
process that operates with a high degree of automation and at greater speed than
manual processes.
Third, advanced analytics and digital technologies improve manufacturing

performance by pulling levers like better predictive maintenance, use of
augmented reality to enable remote troubleshooting by experts, and use of
advance analytics for real-time optimization of process parameters to increase
throughput yield of good-quality product.
Many of these changes will require strengthening technology—making it a core

competency, not a cost center.
Leapfrogging new category creation in developing markets
FMCG companies must bring their newest and best innovation, not lower-quality
products, into developing markets early to capture a share of the $11 trillion
potential growth. Success will require excellent digital execution, as many of
these markets will grow up to be digital. Success will also require empowering
local leadership to compete with the local players looking to seize the market’s
growth potential. Local leaders will need decision rights on marketing as well as
a route to market that is joined up across traditional, omni, and e-marketplace
channels.
Hothousing premium niches
FMCG companies must identify and cultivate premium niches that have attractive
economics and high growth potential to capitalize on the explosion of small
brands. Success will require acquiring or building small businesses and helping
them reach their full potential through a fit-for-purpose commercialization and
distribution model. This means, for example, building a supply chain that
produces small batches and can adapt as companies learn from consumers. The
beauty industry’s incubators are a good model here.
The demands of this three-part portfolio strategy call for a new, agile operating
model that allows a company to adapt and drive relevance rather than prioritizing
synergy and consistent execution above other objectives.
Agile operating model
Originating in software engineering, the concept of an agile operating model has

extended successfully into many other industries, most significantly banking.
Agile promises to address many of the challenges facing the traditional FMCG
synergy-focused model.
Building an agile operating model requires abandoning the traditional command-

and-control structure, where direction cascades from leadership to middle
management to the front line, in favor of viewing the organization as an organism.
This organism consists of a network of teams, all advancing in a single direction,
but each given the autonomy to meet their particular goals in the ways that they
consider best. In this model, the role of leadership changes from order-giver to
enabler (“servant leader”), helping the teams achieve their goals.
An agile operating model has two essential components—the dynamic front end
and the stable backbone. Together, they bring the company closer to customers,
increase productivity, and improve employee engagement.
The dynamic front end, the defining element of an agile organization, consists of
small, cross-functional teams (“squads”) that work to meet specific business
objectives. The teams manage their own efforts by meeting daily to prioritize
work, allocate tasks, and review progress; using regular customer-feedback loops;
and coordinating with other teams to accomplish their shared goals.
The stable backbone provides the capabilities that agile teams need to achieve
their objectives. The backbone includes clear rights and accountabilities,
expertise, efficient core processes, shared values and purpose, and the data and
technology needed for a simple, efficient back office.
The agile organization moves fast. Decision and learning cycles are rapid. Work
proceeds in short iterations rather than in the traditional, long stage-gate process.
Teams use testing and learning to minimize risk and generate constant product
enhancements. The agile organization employs next-generation technology to
enable collaboration and rapid iteration while reducing cost.
We also expect the FMCG operating model of the future to be more unbundled,
relying on external providers to handle various activities, while FMCGs perhaps
provide their own services to others.
M&A as an accelerator
M&A will remain critical to FMCG companies as a way to pivot the portfolio
toward growth and improve market structure. The strongest FMCGs will develop
the skills of serial acquirers adept at acquiring both small and large assets and at
using M&A to achieve visionary and strategic goals—redefining categories,
building platforms and ecosystems, getting to scale quickly, and accessing
technology and data through partnership. These FMCGs will complement their
M&A capability with absorbing and scaling capabilities, such as incubators or
accelerators for small players, and initiatives to help their teams and functions
support and capitalize on the changing business.
Moving forward
To determine how best to respond to the changing marketplace, FMCG

companies should take the following three steps:
Take stock of your health by category in light of current and future disruption,
and decide how fast to act. This means asking questions about the external
market: how significantly are our consumers changing? How well positioned are
we to respond to these changes? What are the scale and trajectory of competitors
that syndicated data do not track? Is our growth and rate of innovation higher than
these competitors, particularly niche competitors? How advanced are competitors
on making model changes that might represent competitive disadvantages for us?
How healthy are our channel partners’ business models, and to what degree are
we at risk? Do our future plans take advantage of growth tailwinds and attractive
niches? Answering these questions creates the basis for developing scenarios on
how rapidly change will happen and how the current business model might fare
in each scenario.
Draft the old-model-to-new-model changes that will position the company for
success over the next decade. This is the time to develop a three-part portfolio
strategy and begin the multiyear transformation needed to become an agile
organization, perhaps by launching and then scaling agile pilots. This is also the
time to determine which capabilities to prioritize and build and the time to
redesign the operating model, applying agile concepts and incorporating the IT
capabilities that offer competitive advantage. Change management and talent
assessment to determine where hiring or reskilling are needed will be critical.
Develop an action plan. The plan should include an ambitious timeline for making
the needed changes and recruiting the talent required to execute the plan.
These efforts should proceed with controlled urgency. Over time, they will wean
FMCG companies from reliance on the strategies and capabilities of the
traditional model. Of course, as companies proceed down this path, they will need
to make ever-greater use of the consumer insights, innovation expertise and
speed, and activation capabilities that have led the industry to success and will do
so again.
In addition to taking functional excellence to the next level, FMCGs will need to
focus relentlessly on innovation to meet the demands of their core mass and
upper-mass markets.
FMCGs will need to increase their pace of testing and innovating and adopt a
“now, new, next” approach to ensure that they have a pipeline of sales-stimulating
incremental innovation (now), efforts trained on breakthrough innovation (new),
and true game changers.

FMCG

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FMCG

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REPORT ON FMCG INDUSTRY

GLOBAL TOP TRENDS

Understanding future market trends is essential for FMCG businesses to make

2. Consumer Demand product convenience

3. Greater focus on healthier products

Countries such as Thailand, Vietnam and the Philippines are experiencing a

In Vietnam, one of the fastest-growing FMCG markets, household wages have

5. Millennials to become big FMCG influencers

6. Newer sustainability consumer mindset

7. Demand driven by population density

8. Blockchain-based supply chains

The blockchain in the food and beverage industry is becoming increasingly

9. Hyperlocal supply chains

11.Increasing trend towards private labels

13.Niche markets gain in importance

The paradigm shift away from mass consumption towards increasingly

14.Transparency and sustainability

15.Wellness oriented branding

Food brands are increasingly using wellness trends to highlight transparency,

16.Trend towards alcohol poverty and non-alcoholic beverages

The responsible consumption of alcohol is developing into a new lifestyle. In

A growing trend on the international market is drinks with legalized cannabis

18.Beauty enhancing foods

20. Plant-based food and beverages

21. Vegetable protein

Companies are increasingly looking at plant protein as a substitute for animal

22. Snacking culture with quality standards

TOP TRENDS IN INDIA

Health and Wellness

The Customized Approach

Also, customization and personalization is the way forward for FMCG

Online Marketing Leads the Way

FMCG market Overview:

FMCG Key Market Segments:

INVESTMENTS AND DEVELOPMENTS

URBAN MARKET REVENUE

 The Union Budget 2019-20 initiatives to increase consumer spending

 FMCG sector to gain support for growth from Inland Waterways

 Accounting for a revenue share of around 55 per cent, urban segment

INCREASING ONLINE USERS BOOST ONLINE FMCG SALES

 The revenue of FMCG’s rural segment is forecasted to grow to 15-16 per

 India’s increasing internet penetration, rising digital maturity along

 The online FMCG market is forecasted to reach US$ 45 billion in

 By 2020, about 40 per cent of FMCG consumption is estimated to be

 100 per cent FDI is allowed in food processing and single-brand

MERGER AND ACCQUISITION

As markets become increasingly volatile amid changing consumer habits and

In a new market analysis, OC&C Strategy Consultants has examined the

Responding to this, Will Hayllar, Partner and Head of Consumer Goods at

Tyson Foods was of further interest to OC&C’s study, as an example of how

GST hurt more than demonetisation

WINNING MODEL FOR CREATING VALUE

The FMCG value-creation model

Signs of stagnating success

This growth challenge really matters because of the particular importance of

The millennial effect

Consumers under 35 differ fundamentally from older generations in ways that

Digital intimacy (data, mobile, and the Internet of Things [IoT])

Explosion of small brands

Many small consumer-goods companies are capitalizing on millennial

The beauty category in particular is an especially good fit, so the advanced

Better for you

Disruption of mass-retailer relationships

E-commerce giants Amazon, Alibaba Group, and JD.com grew gross