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FMCG INDUSTRY

Presented By:-
Pankaj Kumar (54015)
Ketan Kakkar (54008)
Fahad Ahmad Khan (54036)

9/17/2019
 Road map of the Presentation
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1. Introduction
2. Market Scenario of India
3. GDP contribution
4. Major Segments
5. Market Opportunity
6. Top 10 Companies of globe
7. Major Player in India
8. Market Share
9. FDI Inflows
10. Porter’s Five Force Analysis
11. SWOT
12. M & A
13. Conclusion 9/17/2019
 INTRODUCTION
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 FMCG SECTOR generally deals with FMCG products or ‘Fast

Moving Consumer Goods’
 FMCG products have a quick turnover and relatively low cost
 India’s FMCG sector is 4th largest Sector in the economy.
 Intense competition between organized sector and unorganized
sector.
 It includes household care, personal care , food & beverages.
 FMCG Industry is characterized by a well established distribution
network, low operating cost, lower per capital consumption and intense
competition between the organized and unorganized segments

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 Indian Market Scenario
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 FMCG is the 4th largest Sector in the Indian economy.

 It contribute 5% of total factory employment in India.
 Provide livelihood of almost 13 million people.
 Agricultural output as raw material is estimated to
constitute roughly 9% of total turnover for the sector.
 FMCG market in India is expected to grow at a CAGR
of 27.86 percent and is expected to reach US$ 103.70
billion by 2020 from US$ 52.75 billion in FY18.
 Market growth rate :
Rural ---40%, urban ---25%

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 FMCG market in India (US$ billion)

150
 FMCG market in India is expected to grow at CAGR 27.86%
100
a CAGR of 27.86 percent and is expected to
reach US$ 103.70 billion by 2020 from US$ 50
52.75
103.70

52.75 billion in FY18. 0

2018* 2020F

 Final consumption expenditure is set to increase Final consumption expenditure (US$ trillion)

at a CAGR of 25.44 per cent from 2017-2021. 4 CAGR 25.44%

3 3.60
 Final consumption expenditure is expected to
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reach nearly US$ 3.6 trillion by 2020 from US$ 1 1.82

1.82 trillion in 2017. 0

Notes: F- Forecast, * - Data relates to FY18

Source: World Bank, Emami Reports, Dabur Reports, AC Nielsen, CRISIL, Nielsen
Report, 2018
 FMCG’s GDP Contribution in India
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 FMCG sector’s contribution to the country’s GDP stood at 4.15%

with the market size of US$ 49billion(2016-17)

 India is 12th largest consuming country in the world(2010)

 In 2010,India had the market size of US$ 30.9billion

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 Major Segments of FMCG
FMCG

Food and Healthcare Household and

Beverages Personal
 It accounts for 19
Care
percent of the sector.  It accounts for
31 percent of the  It accounts for 50 per
 This segments
includes Health , cent of the sector.
sector.
Beverages,  This Segment
 This segment
Staples/Cereals, includes oral care,
Bakery Products,
includes OTC
hair care, skin care,
Snacks, Chocolates, products and
cosmetics/deodorant,
Ice cream, ethicals.
perfumes. Feminine
Tea/Coffee/Soft
hygiene & paper
drinks , processed
products, fabric
fruits & vegetables,
Dairy products & wash, household
Branded flour. cleaners

Note: OTC is over the counter products; ethicals are a range of pharma products, Share per
cent as of FY18
Source: Economic Times
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 Major Share In Segments

Source: IBEF 9/17/2019

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 MARKET PENETRATION LEVEL

Area wise: Top FMCG Products Penetration

Category wise FMCG Products Penetration Level Level

Toilet Soap 95.7% Toothpastes 91%

63%
Washing Powder 92.3% 84%
Hair Oils 72%
Detergent Bar 88.6%
Shampoo 69%
Hair Oil 74.5% 56%
Tooth Paste 72.8% Toilet Cleaners 45%
12%
Shampoo 60.4%
Glucose 21%
Talcum Powder 51.0% 10%

Fairness Cream 18.6% Toothpowder 13%

22%
Anticeptic Cream 1.6% 4%
Branded Baby Oil 2%
Cold Cream 1.1%
Urban Rural

Among those where the penetration is higher, per

capita consumption is comparatively low, hence offering
scope for high growth in future
Penetration of major products such as fairness cream,
antiseptic cream & cold cream, is just 18.6%, 1.6% & 1.1%,
respectively
Hair oils, toothpastes and shampoos have
significantly high penetration in both urban and rural
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markets
Glucose and toilet cleaners are picking up in the
rural areas due to increased awareness
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 Vast Rural Market:-
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Rural India accounts for more than 700 Million

consumers, or ~70 per cent of the Indian population
and accounts for ~55 per cent of the total FMCG
market
The working rural population is approximately 400
Millions. There is an untapped market and most of
the FMCG Companies are taking different steps to
capture rural market share
The market for FMCG products in rural India is esti-
mated ~ 55 per cent and is projected to touch ~ 65 per
cent within a year

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 TOP 10 LARGEST COMPANIES OF THE GLOBE

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 Major Players
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Company Name Turnover Categories
US$ 2018
Nestle 87.0 Billion 5 categories
Procter and Gamble 83 Billion 9 categories
Marico Limited 61 Billion 6 categories
Colgate-Palmolive 17.08 Billion 1 category
ITC Limited 7.0 Billion 7 categories
Hindustan Unilever Limited (HUL) 4 Billion 20 categories
The Godrej Group 4 Billion 10 categories

AMUL 2.15 Billion 1 category

Parle Agro 1 Billion 4 category
Britannia Industries Limited 730 Million 6 categories

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 FOREIGN PLAYERS
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 Cadbury India Ltd.(CIL)

 Cargill.
 Coca Cola.
 Colgate Palmolive India.
 H.J. Heinz Co.
 Hindustan Unilever Ltd.(HUL)
 Nestle India Ltd.
 Procter & Gamble.

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 DOMESTIC PLAYERS
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 Britannia India Ltd. (BIL)

 Dabur India Ltd.
 Indian Tobacco Corporation Ltd.(ITC)
 Marico.
 Parle Agro.
 Nirma Ltd.
 AMUL

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 COMPANY MARKET shares
SHARES
15.1
Hindustan 36.4%
unilever ltd.
6 36.4
Indian tobacco 30%
company 8.3

Nestle 8.2%

Britannia 6%
30

Others 19.4%
HUL ITC Britannia
Dabur Others
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 MARKET SHARE OF LEADING COMPANY’S OF DIFFERENT
CATEGORIES

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 FDI inflows rise over the years
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 100 per cent FDI is allowed in food processing and single-brand retail and 51 per
cent in multi-brand retail.
 The sector witnessed healthy FDI inflows of US$ 12,604.77 million during April
2000 to September 2017.
 Within FMCG, food processing was the largest recipient; its share was 63.49 per
cent
 US based dairy giant - Schreiber Dynamix Dairies, opened its 1st fully-automated
infant nutrition plant, at Baramati, Maharashtra, with an investment of US$ 37.18
million.
 Britannia has signed an MoU with a Greek baker – Chipita, to produce bakery
items. The venture is worth an investment of US$ 11 million, in which Britannia
will be looking after functions like logistics, supply-chain and distribution network

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 The Hershey Co plans to

invest US$ 50 million over the
next five years in India, its
fastest growing core market
outside of US. The company is
also planning to make India an
export hub for Hershey
products.
 The bottling arm of Coca-Cola
India, Hindustan Coca-Cola
Beverages (HCCB) is
planning to increase its retail
reach by one million new
outlets and is targeting a
revenue of US$ 2.5 billion by
2020.

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 Porter’s Five Force Framework Analysis

Threat of Substitutes

 High – Presence of multiple brands

 Narrow product differentiation
under many brands
 Price war

Bargaining Power of Suppliers Competitive Rivalry Bargaining Power of Buyers

 Low – Big FMCG companies are  High – Private label brands by  High – Low switching cost
able to dictate the prices through retailers are priced at a discount induces the customers’ product
local sourcing from a fragmented to mainframe brands limits shift
group of key commodity competition for the weak brands
suppliers  Influence of marketing strategies
 Highly fragmented industry as
more MNCs are entering  Availability of same or similar
alternatives
Threat of New Entrants
 Medium – Huge investments in
Positive Impact setting up distribution network and
promoting brands
Neutral Impact
 Spending on advertisements is
Negative Impact
aggressive

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 Strengths
1. Low operational costs
2.Presence of established distribution
networks in both urban and rural areas
3.Presence of well-known brands in FMCG
sector
4.Deep roots in local culture & great
understanding of consumer needs
Opportunities
1. Untapped rural market
2.Rising income levels, i.e. increase in
purchasing power of consumers
3. Large domestic market- a population of
over one billion.
4. High consumer goods spending
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Weaknesses
1.Lower scope of investing in technology
and achieving economies of scale,
especially in small sectors
2. Low exports levels
3.Counterfeit Products. These products
narrow the scope of FMCG products in
rural and semi-urban market.
Threats
1.Removal of import restrictions resulting
in replacing of domestic brands
2.Slowdown in rural demand
3.Tax and regulatory structure
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 KEY M&A DEALS IN THE INDUSTRY
Target name Acquirer Name Merger/ Year
Acquisitio
n
GlaxoSmithKline Consumer Healthcare (GSKCH Hindustan Unilever Limited (HUL) Acquisition 2018
India)
Bombay Shaving Company Colgate Palmolive Acquisition (14 2018
per cent
stake)
Brillare Science Emami Acquisition (26 2018
per cent
stake)
Beardo Marico Acquisition (45 2018
per cent)
Future Consumer Limited Future Capital Investment Private Limited Acquisition 2017
D&A Cosmetics Proprietary Ltd and Atlanta Dabur India Acqusition 2017
Body & Health Products Proprietary Ltd
Helios Lifestyle Pvt Ltd Emami Ltd Acquisition 2017
(30 per cent stake)
Godfrey Phillips India (GPI) (packed tea brands) Goodricke Group Ltd Acquisition 2017
HyperCity Future Retail (Future Group) Acquisition 2017
Godrej Industries Godrej Agrovet Ltd. Increase in stake 2017
Argencos, Argentina (Hair care products) Godrej Consumer Products Ltd (Home and
Acquisition 2016
personal care)
Issue Group, Argentina (Hair products) GCPL (Home and personal care) Acquisition 2016
Tura, Nigeria (Soap and cleaning products ) GCPL (Home and personal care) Acquisition 2015
Godrej Consumer Products Ltd (Home and
23 Frika Hair (Pty) Ltd, Africa personal care)
Acquisition 2015
 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.
 It is high risk area but with the promise of a large customer
fallowing as the prize for those who succeed.
 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.

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