Fast moving consumer goods ( FMCG )

FAST MOVING CONSUMER GOODSFAST MOVING CONSUMER GOODS
(FMCG)(FMCG)
SUNAINA SAMRIDDHI FOUNDATION – Empowering for Better..

The focus of this presentation is to discuss…
Introduction
Industry Overview
 Distribution in FMCG
Key players
Job Opportunities
Possible Projects & How to do them??
Questions??

Questions???Questions???
1. What is FMCG? Define.
2. Difference between FMCG & Consumer Durables?
3. What are the characteristics of FMCG?

FMCG IndustryFMCG Industry
 Fast Moving Consumer Goods (FMCG) are those
consumables that have a quick turnover, and relatively low
cost.
 FMCG industry, alternatively called as CPG (Consumer
packaged goods).
 FMCG is characterized by strong presence of MNC and well
established distribution network.
 The intense competition between the organized and
unorganized segments operating at low operational cost..
IntroductionIntroduction

The Indian FMCG Sector can be segmented into three key
groups-
House Hold Care Personal Care Food & Beverages
Fabric Wash
Household Cleaners
Air Fresheners
Insecticides & Mosquito
repellents
Metal Polish
Furniture Polish
Oral Care
Hair Care
Skin Care
Personal Wash (soaps)
Cosmetics
Toiletries
Deodorants & Perfumes
Feminine hygiene
Paper products
Health Beverages
Soft Drinks, juices
Staples/Cereals
Bakery Products
Snack Food
Chocolates, Ice cream
Tea, Coffee, Soft Drinks,
Processed fruits &
vegetables
Dairy Products
Bottled water
Branded Flour etc
IntroductionIntroduction

EXAMPLE-EXAMPLE- SUNAINA SAMRIDDHI FOUNDATION – Empowering for Better..

Market Segment– Premium & MassMarket Segment– Premium & Mass
Example:

Industry AnalysisIndustry Analysis
SIZE
Growth
FutureThreats/Risk
Industry Overview SUNAINA SAMRIDDHI FOUNDATION – Empowering for Better..

 India's FMCG sector is the fourth largest sector in the economy.
 Total FMCG market is in excess of Rs.86000 crores.
 Creates employment for more than three million people in
downstream activities.
 Most of the FMCG companies saw the average growth in net sales
stand at 14 per cent in Q3 of 2009, while net profit posted 24 per
cent growth.
Market SizeMarket Size
Industry Overview
 As per FICCI, the FMCG industry is set to grow 20-30% in 2009-10

Growth ProspectsGrowth Prospects
Growing Economy
Large Market
Changing Demographics & Indian Opportunities
Industry Overview

India recorded a gross domestic
product (GDP) growth rate of 6.7 per
cent in rupee terms during the year
2008–09.
The general index of industrial
production (IIP) is projected to reach
275.4 for the year 2008–09 (base: 1993–
94 = 100).
The fast pace of GDP growth is, in turn,
driving Indian consumerism, with Indian
consumers today more confident and
willing to splurge.
A vibrant economy and growth of youngA vibrant economy and growth of young
India…Growing economyIndia…Growing economy

Large MarketLarge Market
India is second largest Country in terms of Population
Growth

2/3rd Population below age of 35 Population to grow wealthier
Changing Demographics & Indian OpportunityChanging Demographics & Indian Opportunity

Changing Demographics & Indian OpportunityChanging Demographics & Indian Opportunity
Steady increase in Urbanization Favourable consumption pattern

Emerging Trends…Emerging Trends…
WHOWHO
•CONSUMERS
•CUSTOMERS
•COMPETITION
•SOCIETY / ENVIRONMENT
TRENDS
•More Affluence
•Changing Attitudes
•Hybrid Trade
•Intense
•More Conscious
•Only sustainable business
models will survive

Change in Indian Consumer ProfileChange in Indian Consumer Profile
 Consumer mind set changed
towards “Money for Value” from
“Value for Money”
 Survey by A. C. Nielsen shows about
71 per cent of Indian take notice of
pack-aged goods' labels containing
nutritional information compared to
two years ago which was only 59 per
cent

Year Modern Trade General Trade
2007 5% 95%
2010 10% 90%
2025 25% 75%
Modern TradeModern Trade General TradeGeneral Trade
Evolving Trade StructureEvolving Trade Structure

FutureFuture
Market Overview
 India's FMCG sector is poised to reach US$ 43 billion by 2013
and US$ 74 billion by 2018.
India will become the world's fifth largest consumer
market by 2025,
 Over 300 million people would move up from the category
of rural poor to rural lower middle class between 2005 and
2025
 Rural consumption levels are expected to rise to current
urban levels by 2017
Source: FICCI Report, Mc Kinsey Survey, Mart Rural Solution

Threats/ RisksThreats/ Risks
 Cut throat Competition
 Logistics Problem
 Problems in Rural markets-
Acute dependence on the vagaries of the monsoon,
Seasonal consumption
Poor roads and power problem.
 Once the product fails its not easy to revive it back.
 Hoping of customers
 "Me-too" products which illegally mimic the labels and brands of
the established brandsSUNAINA SAMRIDDHI FOUNDATION – Empowering for Better..

Hopping NatureHopping Nature
Customer Loyalty
The major issue with this sector is the 80% of the
customers are Fence Sitter. Hopping from one product to
another is too high , due to very large pool of products.
Die Hard
Loyalist
Die Hard
Opponent
Switchers SwitchersFence
Sitters

Sales/ Distribution ProcessSales/ Distribution Process
C&F- Carrying & Forwarding agents

….Continued

Example- HULExample- HUL

Project ShaktiProject Shakti

Project StreamlineProject Streamline

Example- ITCExample- ITC
 Procurement: cost & quality optimization
• strategic sourcing support to the Foods business (support creation of
verticals in wheat, soya, corn, potato etc.)
• cost-effective sourcing for exports/domestic external business
 Rural Distribution
• ‘last mile connectivity’: 100 partnering companies
• diverse range of goods/services: FMCG, consumer durables, agri-inputs,
paid extension services etc.
 Financial Services
• insurance (focus: weather)
• credit (focus: Kisan credit card scheme)
 Rural retail
• 24 Choupal Saagars operational
E-Choupal

1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and Health Care
10. Marico Industries
Several global players are well established in the Consumer Durables
sector in India, with competition from strong Indian players.
Some of the key players in the sector in India include-

Job OpportunitiesJob Opportunities
• Marketing
• Finance
• HR
• IT
• Operations
• Supply Chain Management
• Sales
• Customer Development
• R&D

Possible ProjectPossible Project

Fast moving consumer goods ( FMCG )

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