Professional Documents
Culture Documents
1
KEY POINTERS FOR FMCG INDUSTRY
3
Overall Industry Trends
4
FMCG industry size is expected to double between 2020 and 2025.
Source: https://www.statista.com/statistics/742463/india-fmcg-market-size/
5
Food and Beverages constitute 44% of FMCG industry.
Source:
https://www.techsciresearch.com/admin/gall_content/2016/11/2016_11$thumbimg10
2_Nov_2016_004628313.pdf
6
Rural markets contribute to 40% of the industry revenues and has
been growing faster than the urban market in the last few years.
Source:
https://www.techsciresearch.com/admin/gall_content/2016/11/2016_11$thumbimg102_Nov_2
7 016_004628313.pdf
Modern trade constitute 9% of the overall FMCG sales which is
much lower than that of other developing or developed countries.
Source:
https://www.techsciresearch.com/admin/gall_content/2016/11/2016_11$thumbimg1
02_Nov_2016_004628313.pdf
8
Low penetration and per-capita consumption indicates
high future potential growth.
• India’s per capita consumption is much less than that of even other
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SOME COMMON STRATEGIES ADOPTED BY FMCG
COMPANIES
• Frequent NPI
• High spend on advertising, promotions and offers
• WMI
Presence in multiple categories
Go National and Local
Premiumization
Smaller Package sizes
Personalization
Multiple brands in a category
• Shelf space
• Green initiatives (Ex: Smart Fill machines)
• Analytics
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Category Analysis
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Bath and Shower
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BATH AND SHOWER
1% 7%
5%
87%
Bar Soap Talcum Powder
Body Wash Liquid Soap/Hand Sanitizer
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://ipsnews.net/business/2020/12/22/india-bathing-soap-market-is-expected-to-continue-with-a-cagr-of-
above-7-in-the-coming-years-bonafide-research/
13
Body wash and Liquid Soap will drive the growth of the
category.
Bar Soap 3 to 5%
Body Wash 10 to 12%
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://ipsnews.net/business/2020/12/22/india-bathing-soap-market-is-expected-to-continue-with-a-
cagr-of-above-7-in-the-coming-years-bonafide-research/
14
HUL, Reckits, Wipro and Godrej and Reckitts holds more than
70% share
Source:
Estimates from Company Documents , Media Reports and Industry sources
15
Top 6 brands constitute 50% of the bath and shower category.
2015 2020
Lifebuoy HUL 14% 11%
Dettol Reckitts 8% 11%
Santoor Wipro 7% 10.2%
Lux HUL 12% 9%
Godrej No.1 GCPL 6% 6.5%
Source:
Estimates from Company Documents , Media Reports and Industry sources
16
NEW LAUNCHES AND KEY TRENDS
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NEW LAUNCHES AND KEY TRENDS
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Hair Care
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Hair Care
5% 2%
Saloon Haircare
29%
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://www.mordorintelligence.com/industry-reports/india-hair-care-and-styling-products-market-industry
20
Colourants, Saloon Hair care, Styling products will
drive the growth in the Hair-Care category.
HAIR-CARE : GROWTH
Expected CAGR
Category (2021-25)
7 to 10%
Hair Oils
4 to 6%
Shampoos and Conditioners
Colourants 8 to 12% %
Saloon Hair Care 10 to 13%%
Styling Agents 12 to 15%
Total 8 to 10%
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://www.mordorintelligence.com/industry-reports/india-hair-care-and-styling-products-market-industry
21
Hair care category is quite fragmented. Top 7 companies put
together account for only 60% of the share.
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://www.statista.com/statistics/1232108/india-market-share-of-hair-care-brands/
https://www.livemint.com/mint-lounge/features/how-marico-fought-an-aggressive-giant-
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Parachute, Clinic Plus and Dove are the 3 biggest Hair-care
brands.
Source:
Estimates from Company Documents , Media Reports and Industry sources
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KEY TRENDS
Hair care category had negative growth of -4% in 2020 due to lock
down.
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Deodorants
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Deodorant
Sprays
77%
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://timesofindia.indiatimes.com/business/india-business/itc-eyes-top-position-in-deo-market/articleshow/68623268.cms
27
Deodrant Pumps grew very fast between 2014-19
and it’s growth is expected to stabilize in the
coming years
DEODRANTS : GROWTH
Category 2020 - 25
Pumps 18% to 20%
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://timesofindia.indiatimes.com/business/india-business/itc-eyes-top-position-in-deo-market/articleshow/68623268.cms
28
Vini Cosmetics and ITC which did not even exist 10
years ago are the top 2 players.
31
Soft Drinks
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Almost 46% of Soft drinks sales by value are to on-trade
channel.
SOFT DRINKS : OFF-TRADE VS ON-TRADE BY VALUE
Products Off-trade On-trade
Bottled Water 49% 51%
Carbonates 41% 59%
Fruits and vegetable
Juices 77% 23%
Concentrates 100%
Sports and Energy
Drinks 71% 29%
34
PARAMETERS FOR COMPANY ANALYSIS
Business Mix
Growth and Margins
Distribution
Analysis of Brands
New Launches in the last 2-3 years and their performance
Focus categories for the future
M&As – Why and their impact?
HUL, among peers, by far the largest contributor to overall group
turnover
• India is the second biggest market for Unilever after US (which contributes
16.3% of Unilever’s revenue).
• India is expected to become the largest market for Unilever in FY 27
• HUL’S market capitalization is 66% of Unilever’s market capitalization (US$
74bn vs US $ 111.84 bn in May 2021)
Personal Care products contribute 39% of HUL ‘s Sales
but 50% of it’s profits.
EBITDA Margin in %
30%
25%
25% 22%
21% 20%20%21%
20% 18%19%
17%17%
15% 14%15%15%16% 15%
15% 13% 13%
10%
5%
0%
FY FY FY FY FY FY FY FY FY
2003 2005 2007 2009 2011 2013 2015 2017 2019
EBITDA in % FY 17 FY 18 FY 19 FY 20 FY 21
41
PERFORMANCE OF TOP BRANDS
2011 2020
No. of Brands with Annual 0 1 (Suf Exel)
Revenue of more than Rs. 5000
crores
No. of Brands with Annual 0 4 (Wheel, Brooke Bond,
Revenue of Rs. 2000 crores to Rs. Glow & Lovely,
5000 crores Lifebuoy)
No. of Brands with Annual 7 (Surf Exel, 7 (Rin, Vim, Lux, Lakme,
Revenue of Rs. 1000 crores to Rs. Wheel, Brooke Dove, Ponds, Clinic
2000 crores Bond, Fair & Plus)
Lovely,
Lifebuoy, Lux,
Rin)
43
PERFORMANCE OF NEW LAUNCHES
FUTURE CATEGORIES
Facewash, Instant
Explode
Coffee, Handwash
Soups, Hair
conditioner, Liquid Accelerate
Detergents, Fabric
Conditioners
Source: Company
46
INDULEKHA
• Acquired in April 2016 for Rs330
Indulekha is the most expensive even
crs, the brand had an annual
among Ayurvedic oils
turnover of Rs100 crs
• In 2019, the brand clocked a
turnover of Rs400 crs (4x) and the
Valuation increased to Rs. 2000 crs
(6.8x)
• HUL converted a regional brand
into Pan India brand through it’s
distribution and marketing.
Source: https://www.business-standard.com/article/companies/hul-s-indulekha-enters-rs-2-000-cr-club-three-
years-after-acquisition-119082301346_1.html
47
GSK MERGER
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49
Patanjali became third largest FMCG company in India in 2017.
52
How Patanjali grew very fast between 2011 and 2017?
53
FACTORS CONTRIBUTING TO PATANJALI’S SUCCESS
BETWEEN 2011 TO 2017
FLANKER STRATEGY
Alternative Distribution System
Ayurvedic products
Low Price
Less Advertisements and promotion costs
Branded House Strategy
Combination of Yoga, Baba Ramdev’s popularity, Spirituality, Nationalism
and Religion
Initially entered less competitive categories
Launched products across many categories in short time
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PRESENCE ACROSS CATEGORIES
• Patanjali’s top 3 categories -
Cow(Ghee) (Rs. 1467
Crores), followed by
Toothpaste (Rs. 940
Crores) and them
Shampoo (Rs. 850 Crores).
• These three products
contributes ~35% of the total
sales.
Source: https://unlistedzone.com/analysis-of-patanjali-an-indian-fmcg-giant-of-baba-ramdev/
55
Why their growth stagnating after 2017?
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•Lack of readiness of the Channel for GST compliance in 2017
•Other strong FMCG companies increased their focus on Ayurvedic and Nature
based products.
•Quality issues on certain products and risk of branded house strategy
•Process Issues
• Weak Distribution – Many retailers report frequent stockouts
• Receivables of 86 days1 much higher than the industry average of 14 to 21
days.
• Excessive Diversification intentions(Logistics, SIM cards, Solar panels, Phones,
Jeans etc)
•Fail to become market leader or achieve critical market share in many of the
categories
Source:
1. https://unlistedzone.com/analysis-of-patanjali-an-indian-fmcg-giant-of-baba-
ramdev/
57
Impact of Modern
Retail on FMCG
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Impact of Modern Retail on FMCG
Pros Cons