One of the fastest growing sector in early 1980s till 1990s. The dream of every creative man, any investor, advertising agency, or B-school graduate to work in or for FMCG company. After 1990s, o FMCG started losing their sheen due to introduction of other product types o Total lack of imagination on the part of FMCG companies. During 2010, Consumers willingness to upgrade to better, value added products helped FMCG.
Starting from one cup of coffee in the morning right up to that relaxing malt beverage at night, we rely heavily on FMCG. Everything from toothpaste to processed foods and health drinks to body care products comes from FMCG. It refers to consumers non-durable goods Sold quickly at relatively low cost. Generally sold at large quantities. This sector touches every aspects of human life from looks to hygiene to palate. INTRODUCTION WHAT IS FMCG ? FMCG industry, alternatively called as CPG (Consumer Packaged Goods).
Those consumables which are normally consumed by the consumers at a marketing, financing, purchasing, etc is called FMCG.
This sector mainly consists of sub segments via: Personal care, Food & Beverages, household products. Perfumes Chocolates Soaps
Shampoos Energy drinks Detergents FMCG company CHARACTERISTICS OF FMCGS From the consumers' perspective: Frequent purchase Low involvement (little or no effort to choose the item products with strong brand loyalty are exceptions to this rule) Low price From the marketers' angle: High volumes Low contribution margins Extensive distribution networks High stock turnover
India is an important market for FMCG players The Indian FMCG sector is the 4 th largest in the economy with total market size of around US$ 13.1 billion. Due to increasing competition among companies, FMCG has extended its branches to rural and semi urban areas. This has increased employment opportunity in wide range. Scope The fast moving consumer goods (FMCG) segment is the fourth largest sector in the Indian economy The market size of FMCG in India is expected to grow from US$ 30 billion in 2011 to US$ 74 billion in 2018 FMCGs GDP contribution rises by 24%, FMCG, sectors contribution to the countrys GDP now stands at 24.3 per cent.
Evaluation of FMCG sector
The FMCG sector in India generated revenues worth US$ 34.8 billion in 2011, a growth of 15.2 per cent as compared to the previous year. Over 2006-11, the sector's revenues posted a compound annual growth rate (CAGR) of 17.3 per cent. Food products are the leading segment, accounting for 43 per cent of the overall market. Personal care (22 per cent) and fabric care (12 per cent) are the other leading segments. A report by the Financial Derivatives Company, FDC, says, The FMCG sector remains one of the fastest growing sectors of the economy and we believe opportunities still exists in this sector. The size of the market is heavily influenced by the countrys demographic dynamics and the profound influence that western culture is having on consumer tastes.
1.Hindustan Unilever Ltd.
TOP TEN FMCG COMPANIES
It is India's largest consumer goods company based in Mumbai, Maharashtra. It is owned by the British-Dutch company Unilever which controls 52% majority stake in HUL. HUL was formed in 1933. Its products include foods, beverages, cleaning agents and personal care products. Revenue22,116 crore (US$4.03 billion)(2011-2012)
Net income2,691 crore (US$489.76 million)(2011-2012) Employees-16,500 (2011) Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. As per Nielsen market research data, two out of three Indians use HUL products. In 2012, HUL was recognized as one of the world's most innovative companies by Forbes. With a ranking of number 6, it was the highest ranked FMCG company.
2.ITC (Indian Tobacco Company)
It was formed in 1970 by Henry Overton Wills and Yogesh Chander Deveshwar, (Chairman). Headquarters in Kolkata, West Bengal, India. In FMCG, ITC has a strong presence in : Cigarettes: W.D. & H.O. Wills, Gold Flake Kings, Gold Flake Premium, Navy Cut, Insignia, India Kings, Classic (Verve, Menthol, Menthol Rush, Regular, Citric Twist, Mild & Ultra Mild), 555,Benson & Hedges, Silk Cut, Scissors, Capstan, Berkeley, Bristol, Lucky Strike, Players and Flake. Foods: (Kitchens of India; Aashirvaad, Minto, Sunfeast, Candyman, Bingo, Yippee, Sunfeast Pasta brands in Ready to Eat, Staples, Biscuits, Confectionery, Noodles and Snack Foods). Apparel: (Wills Lifestyle and John Players brands) Personal care: (Fiama di Wills; Vivel; Essenza di Wills; Superia; Vivel di Wills brands of products in perfumes, hair care and skincare) Stationery: (Classmate and PaperKraft brands) Safety Matches and Agarbattis: [Ship ; Mangaldeep; Aim brands]
3.Nestl India It is a multinational nutritional and health-related consumer goods company headquartered in Vevey, Switzerland. It is the largest food company in the world measured by revenues.
Nestl was listed No. 1 in the Fortune Global 500 as the world's most profitable corporation.
Nestl's products include baby food, bottled water, breakfast cereals, coffee, confectionery, dairy products, ice cream, pet foods and snacks.
Nestl's indias first production facility was set up in 1961 at moga (punjab)
The Nestl india head office is located at Gurgaon along with other branch offices in Delhi,Mumbai,Chennai and kolkata.
It has 2,50,000 employees,500 factories and 8000 range of products across the globe.
4. AMUL
Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat, India.
Gujarat Co-operative Milk Marketing Federation Ltd Formed in 1946,
It has also ventured into markets overseas.
Amul's product range includes milk powders, milk, butter, ghee, cheese, Masti Dahi, Yoghurt, Buttermilk, chocolate, ice cream and others.
Revenue US$2.15 billion (201011)
AMUL has the largest distribution network for any FMCG company. It has nearly 50 sales offices spread all over the country, more than 5 000 wholesale dealers and more than 700 000 retailers.
It has Largest milk handling capacity in Asia.
5.Dabur India
Dabur India Limited is the fourth largest FMCG Company in India with interests in Health Care, Personal Care and Food Products.
It is public company listed in NSC and BSC.
it has 17 ultra-modern manufacturing units spread around the globe and its products marketed in over 60 countries.
Presence of established distribution networks in both urban and rural areas.
Presence of well-known brands in FMCG sector.
Favourable governmental Policy: Indian Government has passed the policies aimed at attaining international competitiveness through lifting of the quantitative restrictions, reducing excise duties, 100 per cent export oriented units can be set up by government approval and use of foreign brand names etc.
Foreign Direct Investment (FDI): Automatic investment approval up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies investment is allowed for most of the food processing sector except malted food, alcoholic beverages and those reserved for small scale industries (SSI).
Opportunities-
Untapped rural market, changing life style.
Rising income levels, i.e. increase in purchasing power of consumers.
Large domestic market with more population of median age 25.
High consumer goods spending.
India is the largest milk producer in the world, yet only around 15 per cent of the milk is processed. The organized liquid milk business is in its infancy and also has large long-term growth potential. Even investment opportunities exist in value-added products like desserts, puddings etc.
Only about 10-12 per cent of output is processed and consumed in packaged form, thus highlighting the huge potential.
India is under penetrated in many FMCG categories as shown in below diagram. With rise in per capita incomes and awareness, the growth potential is huge.
Lower price and smaller packs are also likely to drive potential up trading for major FMCG products
Weakness- Lower scope of investing in technology and achieving economies of scale, especially in small sectors
Low exports levels
"Me-too products, which illegally mimic the labels of the established brands. These products narrow the scope of FMCG products in rural and semi-urban market. Threats-
Removal of import restrictions resulting in replacing of domestic brands
Tax and regulatory structure
Rural demand is cyclical in nature and also depends upon monsoon. CONCLUSION More and more people these days have started involving themselves in this field as; it creates tremendous job opportunities for them. It is a steady, diverse and a highly profitable industry where a person can do a lot of work. The jobs in this field range from sales and supply chain, investment, promotion, H.R development, and general management. It also allows you to trade directly with the various traders online.