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1 FMCG - Summary Presentation - V2
1 FMCG - Summary Presentation - V2
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Each category can be understood by looking at the following
factors
•New launches
•Key Trends
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Beauty and Personal Care
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Personal care industry is Rs. 40,000 crores. Bath and Shower, Hair-
Care, Oral and Skin care constitute about 80% of the overall personal
care value.
OVERVIEW
•Overall Size : Rs. 40,000 crores
• Share of Major segments in Personal Care :
•Bath and Shower: 30%
•Hair care: 25%
•Oral Care: 14%
•Skin Care: 13%
•Men’s grooming: 8%
•Color cosmetics: 6%
•Others : 5% (others include Baby and child specific
products, Deodrants, Depilatories, Fragrances, Sun care
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etc)
Bath and Shower
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88% of the products in bath and shower are bar soap. The
contribution of shower gel and liquid soap are less than 3%
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Though the overall growth is expected to slow down, liquid
soap will still grow at impressive rate.
Category CAGR
2007-12 2012-17
Bar Soap 13.8% 3.7%
Body Wash & 15.9% 7.3%
Shower Gel
Liquid Soap 33.5% 15.3%
Talcum Powder 5.2% 0.9%
Overall Bath 13% 3.8%
and Shower
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HUL, GCPL, Reckitts and Wipro holds more than 75% share
2007 2012
Lux HUL 15.3% 13.1%
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Health and hygiene concerns driving the demand on liquid soap
• Increasing Realizations
•
• New launches
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Health and hygiene concerns driving the demand on liquid soap
which
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offers protection against bacteria and viruses.
Realizations are increasing due to increase in commodity inflation
and movement towards expensive liquid soap and shower gel.
•Increasing Realizations
• Average unit prices continued to increase, mainly due to
commodity inflation, which led to increases in the prices of the
main ingredients of such products, including oils and glycerine.
•In addition, strong growth in liquid soap and body
wash/shower gel, which are comparatively more expensive than
other products, pushed unit prices even higher.
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Focus of new launches has been on male targeted products,
combination products and products with new attributes.
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Hair-Care
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Hair Oils/ Conditioners and Shampoos constitute more than
77% of the Hair-Care category.
HAIR-CARE : GROWTH
CAGR
Category 2007-12 2012-17
Hair 12.8% 10.5%
Oils/Conditioners
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Hair care category is quite fragmented. Top 7 companies put
together account for only 65% of the share.
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Clinic Plus, Dabur and Parachute are the 3 biggest brands.
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Colourants, Saloon Hair care, Styling products will drive the
growth in the Hair-Care category.
• INCREASING REALIZATIONS
•ANTI-DANDRUFF PRODUCTS
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Colourants, Saloon Hair care, Styling products will drive the
growth in the Hair-Care category.
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Colourants, Saloon Hair care, Styling products will drive the
growth in the Hair-Care category.
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Skin Care
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Facial creams constitute 90% of the skin care category
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HUL is the market leader by a huge margin over other competitors
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Fair & Lovely is the biggest brand in skin care with about 43%
share.
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Skin care is expected to grow by healthy 10% between 2012-17.
SKIN-CARE : GROWTH
CAGR
Category 2007-12 2012-17
16.9% 9%
Facial Care
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SKIN-CARE : KEY TRENDS
GROWTH BEYOND FAIRNESS PRODUCTS
• The growing desire to lose weight and look slim continued to fuel
growth in firming/anti-cellulite body care. Oriflame and Amway
continued to be the leading brands which pushed growth.
• Other growing categories are:
• Anti ageing
• Cleansers
• Acne treatments
DOMINANCE OF HUL
•Hindustan Unilever continued to dominate skin care with a share of
56% .
•The company enjoys a leading position with established brands such
as Fair & Lovely and Pond’s, which have enjoyed an established
presence
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in the country for years.
SKIN-CARE : KEY TRENDS
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Biscuits
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Biscuit category is about Rs. 15,600 crores and Plain biscuits are
the biggest selling product category
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Parle and Britannia are the two strong players with ITC increasing
their share over the last few years.
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BISCUITS : BRAND SHARES
BISCUITS : GROWTH
CAGR
Products 2007-12 2012-17
32% 12%
Cookies
15.6% 6%
Plain Biscuits
Filled and Sandwich Biscuits 23% 9%
Savoury Biscuits and Crackers 14.3% 8.2%
Overall Biscuits 18.6% 8%
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BISCUITS : KEY TRENDS
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BISCUITS : KEY TRENDS
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BISCUITS : KEY TRENDS
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Soft Drinks
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Bottled water, Carbonates, Fruits and Vegetable juices constitute
about 95% of the soft drinks market.
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Almost half of Soft drinks sales by value are to on-trade channel.
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Carbonated Drinks
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Cola and Lime carbonates corms more than 70% of the category.
CARBONATES : GROWTH
CAGR
Products
2007-12 2012-17
Regular Cola Carbonates 10.5% 7.5%
Low Calorie Cola
Carbonates 10.7% 10.2%
Lemonade / Lime
Carbonates 14.5% 16%
Orange Carbonates 4.3% 4%
Other Non-Cola
Carbonates 15.5% 15.5%
Overall 10.5% 10.1%
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Non cola carbonates especially lime based are the major drivers of
growth.
CARBONATES : GROWTH
CAGR
Products
2007-12 2012-17
Regular Cola Carbonates 10.5% 7.5%
Low Calorie Cola
Carbonates 10.7% 10.2%
Lemonade / Lime
Carbonates 14.5% 16%
Orange Carbonates 4.3% 4%
Other Non-Cola
Carbonates 15.5% 15.5%
Overall 10.5% 10.1%
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Carbonates is effectively a 2 player category. Coca cola gained 3 %
share between 2007-12.
CARBONATES : COMPANY MARKET SHARES
Company Market Shares
2007 2012
Coca-Cola 56.2% 60%
Pepsi Co 39.6% 37.2%
Others 2.6% 1.6%
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Coca-Cola’s brands dominate 4 of the top 6 carbonates brands.
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Top 3 players have gained about 8% market shares mainly at the
cost of regional players.
BOTTLED WATER : COMPANY MARKET SHARES
Company Market Shares
2007 2012
Parle Bisleri 37.5% 42.8%
Pepsico 13.5% 14.9%
Coca – Cola 9.2% 11.3%
Dhariwal Co 9% 8%
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Bisleri is the biggest brand by huge margin follwed by Acquafina
and Kinley
BOTTLED WATER : BRAND SHARES
Oxyrich Dhariwal Co 9% 8%
Bottled water has been and will be one of the fastest growing
category.
BOTTLED WATER : GROWTH
2007-12 28%
2012-17 24%
BOTTLED WATER : KEY TRENDS
•Still bottled water is the only product. Flavored or functional water are
sold in negligible quantities.
•Fastest growing product category in soft drinks
• High awareness of safety and hygiene, poor quality of tap water driving
sales.
• Few years back only high income groups were the target segment but
today middle classes, tourists and travelers also consume bottled water.
•Prices have remained constant or increased very little. Because there is
very little customer loyalty and the customer could easily shift to other
brands.
•Distribution is the key to be competitive. All the top 3 players have strong
distribution network. In 2011, Parle Bisleri launched Bisleri hubs to drive
consumption, with local stationery shops and dairies exclusively selling the
Bisleri brand.
ANALYSIS OF HUL
54
In 2011, Soaps and Detergents constitute about 43% of sales while personal
products constitute 50% of profitability
08 10 13 08-10 11-13 08 10 13 08 10 13
There has been a significant change in HUL’s business mix over the last 10 years.
Mar - 13
SOAPS AND DETERGENTS OVERVIEW
•Soaps and Detergent is the largest contributor of HUL sales and accounts for
~45% of total sales.
•HUL holds extensive soaps and detergent portfolio with a mix of premium,
economy and popular segments.
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Dove and Liril are the fastest growing brands for HUL whereas
Lifebuoy and Lux are the biggest brands in terms of revenues and
share.
HUL’S KEY SOAP BRANDS: SALES (Rs. Mn), GROWTH (%) AND MARKET
SHARE (%)
Brand
Market
Share
Annual Growth
58
Impact of Private Labels
SIZE COMPARISON – RETAILERS VS MANUFACTURERS
Sr.No Retail Company Total Manufacturer Brand Company Total Sales (in
Sales (in $billion)
$billion)
1 Wal-mart 316 Nestle 75
2 Carrefour 94 Altria 69
3 Metro Group 73 P&G 57
4 Tesco 71 Johnson & Johnson 51
5 Kroger 61 Unilever 50
Sr.No Retail Company Total Manufacturer Brand Company Total Sales (in
Sales (in $billion)
$billion)
1 Wal-mart 316 Nestle 75
2 Carrefour 94 Altria 69
3 Metro Group 73 P&G 57
4 Tesco 71 Johnson & Johnson 51
5 Kroger 61 Unilever 50
6 Royal Ahold 56 48 27
7 Costco 53 10 5
8 Target 53 32 17
9 Rewe 51 25 13
10 Aldi 43 95 41
PRIVATE LABELS GROWING FASTER THAN MANUFACTURER BRANDS
2000 2010
World wide 14 22
Western Europe 20 30
North America 20 27
Latin America 3 9
Australasia 15 22
Japan 2 10
China 0.1 3
South Africa 6 14
Overall Industry Trends
64
Size of the FMCG industry is about Rs. 200,000 crores in FY 2013.
About 40% of the FMCG sales are in Rural areas.
2000 2000
1831
16% 1671
1800
1600
1400 6% 1300
1160
1200 1020
1000 860
710
800 585
500 540
600 490
400
200
0
FY02 FY04 FY FY FY FY12
06 08 10
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FMCG INDUSTRY : CHARACTERISTICS
•One of the extremely competitive industry. Very difficult for new players
to enter and make a big impact. (ITC is yet to become profitable in their
FMCG business even after 10 years)
•Very diverse industry. Analysis should happen on category by category
basis because trends, brands and players differ significantly across the
categories.
•There are strong MNCs and also strong Indian players.
•In the last 5 years the growth rates has been 16%. It has picked up
•compared to the previous 10 years.
•This sector is relatively immune to recession.
•The growth in FMCG depends on several factors - Penetration levels,
Per capita consumption, Per capita income increase, Urban and Rural
proportion
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Opportunities in Low Penetration and Low-per Capita Consumption Categories
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Penetration levels of many FMCG products like Ketchups, juices etc are much
less than even 10%
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PER CAPITA CONSUMPTION OF KEY FMCG PRODUCTS:
COMPARISON WITH GLOBAL TRENDS
Toothpaste ( kg) Tea ( kg)
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PER CAPITA CONSUMPTION OF KEY FMCG PRODUCTS:
COMPARISON WITH GLOBAL TRENDS
Skincare ( Rs) Shampoo ( kg)
70
PER CAPITA CONSUMPTION OF KEY FMCG PRODUCTS:
COMPARISON WITH GLOBAL TRENDS
Fabric Wash ( kg) Ice-creams ( litre)
71
CRITICAL SUCCESS FACTORS (APART FROM BRANDING)
RIVER
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Some companies are over dependent on their power brands which could
impact their growth and profitability
•The over dependence on a brand or few brands (for sales and margins) can
create trouble for the company in the long term.
•It is important to have multiple power brands like HUL
•High Dependence : Nestle, Marico and Jyothy Labs
•Medium Dependence : Emami and Colgate
•Low Dependence : HUL and Dabur
•HUL has managed the power brands better. They have done brand
extensions so that the power brands do not depend on one category. Ex:
Dove, Lux, Lifebuoy
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