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INTRODUCTION
The Fast Moving Consumer Goods (FMCG) industry in India is one of the largest
sectors in the country and over the years has been growing at a very steady pace.
The sector consists of consumer non-durable products which broadly consists,
personal care, household care and food & beverages. The Indian FMCG industry is
largely classified as organized and unorganized. This sector is also buoyed by
intense competition. Besides competition, this industry is also marked by a robust
distribution network coupled with increasing influx of MNCs across the entire
value chain. This sector continues to remain highly fragmented.
Industry Classification
The FMCG industry is volume driven and is characterized by low margins. The
products are branded and backed by marketing, heavy advertising, slick packaging
and strong distribution networks. The FMCG segment can be classified under the
premium segment and popular segment. The premium segment caters mostly to the
higher/upper middle class which is not as price sensitive apart from being brand
conscious. The price sensitive popular or mass segment consists of consumers
belonging mainly to the semi-urban or rural areas who are not particularly brand
conscious. Products sold in the popular segment have considerably lower prices
than their premium counterparts.
What are Fast Moving Consumer Goods (FMCG)?
Products which have a quick turnover, and relatively low cost are known as Fast
Moving Consumer Goods (FMCG). FMCG products are those that get replaced
within a year. Examples of FMCG generally include a wide range of frequently
purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning
products, shaving products and detergents, as well as other non-durables such as
glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also
include pharmaceuticals, consumer electronics, packaged food products, soft
drinks, tissue paper, and chocolate bars.
A subset of FMCGs is Fast Moving Consumer Electronics which include
innovative electronic products such as mobile phones, MP3 players, digital
cameras, GPS Systems and Laptops. These are replaced more frequently than other
electronic products.
White goods in FMCG refer to household electronic items such as Refrigerators,
T.Vs, Music Systems, etc.
In 2005, the Rs. 48,000-crore FMCG segment was one of the fast growing
industries in India. According to one study, the industry grew 5.3% in value
between 2004 and 2005.
The Indian FMCG sector is the fourth largest in the economy and has a market size
of US$13.1 billion. Well-established distribution networks, as well as intense
competition between the organized and unorganized segments are the
characteristics of this sector. FMCG in India has a strong and competitive MNC
presence across the entire value chain.
It has been predicted that the FMCG market will reach to US$ 33.4 billion in 2015
from US $ billion 11.6 in 2003. The middle class and the rural segments of the
Indian population are the most promising market for FMCG, and give brand
makers the opportunity to convert them to branded products. Most of the product
categories have potential for growth is huge.
The Indian Economy is surging ahead by leaps and bounds, keeping pace with
rapid urbanization, increased literacy levels, and rising per capita income.
The big firms are growing bigger and small-time companies are catching up as
well.
List of FMCG Companies in India
ALPHABATES COMPANIES
B Britannia
C Colgate Palmolive(India) ltd.
D Dabur India Limited
E Emami Limited
G GlaxoSmithKline Consumer Healthcare Limited
Godfrey Phillips India Limited
Godrej Consumer Products Limited
H Hindustan Unilever Limited
I ITC Limited
M Marico Limited
N Nestle India Limited
Nirma Limited
P Procter & Gamble Hygiene and Health Care Limited
R Radico Khaitan Limited
T Tata Tea Limited
U United Breweries LimitedUnited Spirits Limited
W Weikfield Products Company India Private Limited
THE TOP 20 COMPANIES IN FMCG SECTOR
S.
NO.
Companies
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
11. Colgate-Palmolive (India)ltd.
12. Gillette India ltd.
13. Godfrey Phillips
14. Henkel spic
15. Johnson & Johnson
16. Modi Revlon
17. Nestle
18. Nirma ltd
19. Amul India
20. Godrej consumer products ltd.
The companies mentioned in Exhibit I, are the leaders in their respective sectors.
The personal care category has the largest number of brands, i.e., 21, inclusive of
Lux, Lifebuoy, Fair and Lovely, Vicks, and Ponds. There are 11 HLL brands in
the 21, aggregating Rs. 3,799 crore or 54% of the personal care category.
Cigarettes account for 17% of the top 100 FMCG sales, and just below the
personal care category. ITC alone accounts for 60% volume market share and 70%
by value of all filter cigarettes in India.
The foods category in FMCG is gaining popularity with a swing of launches by
HLL, ITC, Godrej, and others. This category has 18 major brands, aggregating Rs.
4,637 crore. Nestle and Amul slug it out in the powders segment. The food
category has also seen innovations like softies in ice creams, chapattis by HLL,
ready to eat rice by HLL and pizzas by both GCMMF and Godrej Pillsbury. This
category seems to have faster development than the stagnating personal care
category. Amul, India's largest foods company, has a good presence in the food
category with its ice-creams, curd, milk, butter, cheese, and so on. Britannia also
ranks in the top 100 FMCG brands, dominates the biscuits category and has
launched a series of products at various prices.
In the household care category (like mosquito repellents), Godrej and Reckitt are
two players. Goodknight from Godrej is worth above Rs 217 crore, followed by
Reckitt's Mortein at Rs 149 crore. In the shampoo category, HLL's Clinic and
Sunsilk make it to the top 100, although P&G's Head and Shoulders and Pantene
are also trying hard to be positioned on top. Clinic is nearly double the size of
Sunsilk.
Dabur is among the top five FMCG companies in India and is a herbal specialist.
With a turnover of Rs. 19 billion (approx. US$ 420 million) in 2005-2006, Dabur
has brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real.
Asian Paints is enjoying a formidable presence in the Indian sub-continent,
Southeast Asia, Far East, Middle East, South Pacific, Caribbean, Africa and
Europe. Asian Paints is India's largest paint company, with a turnover of Rs.22.6
billion (around USD 513 million). Forbes Global magazine, USA, ranked Asian
Paints among the 200 Best Small Companies in the World
Cadbury India is the market leader in the chocolate confectionery market with a
70% market share and is ranked number two in the total food drinks market. Its
popular brands include Cadbury's Dairy Milk, 5 Star, Eclairs, and Gems. The
Rs.15.6 billion (USD 380 Million) Marico is a leading Indian group in consumer
products and services in the Global Beauty and Wellness space.
Outlook
There is a huge growth potential for all the FMCG companies as the per capita
consumption of almost all products in the country is amongst the lowest in the
world. Again the demand or prospect could be increased further if these companies
can change the consumer's mindset and offer new generation products. Earlier,
Indian consumers were using non-branded apparel, but today, clothes of different
brands are available and the same consumers are willing to pay more for branded
quality clothes. It's the quality, promotion and innovation of products, which can
drive many sectors.
Most of the consumer durable goods will see a reduction in price as the
government of India decided to reduce tax levied on them. 4 percentage point
reduction in the Cenvat to 10 per cent from 14 per cent is the key driver.
SCOPE
The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest
sector in the economy. A well-established distribution network, intense
competition between the organized and unorganized segments characterize the
sector. FMCG Sector is expected to grow by over 60% by 2010. That will translate
into an annual growth of 10% over a 5-year period. It has been estimated that
FMCG sector will rise from around Rs 56,500 crores in 2005 to Rs 92,100 crores
in 2010. Hair care, household care, male grooming, female hygiene, and the
chocolates and
confectionery categories are estimated to be the fastest growing segments, says an
HSBC report. Though the sector witnessed a slower growth in 2002-2004, it has
been able to make a fine recovery since then.
For example, Hindustan Levers Limited (HLL) has shown a healthy growth in the
last quarter. An estimated double-digit growth over the next few years shows that
the good times are likely to continue.
Growth Prospects
With the presence of 12.2% of the world population in the villages of India, the
Indian rural FMCG market is something no one can overlook. Increased focus on
farm sector will boost rural incomes, hence providing better growth prospects to
the FMCG companies. Better infrastructure facilities will improve their supply
chain. FMCG sector is also likely to benefit from growing demand in the market.
Because of the low per capita consumption for almost all the products in the
country, FMCG companies have immense possibilities for growth. And if the
companies are able to change the mindset of the consumers, i.e. if they are able to
take the consumers to branded products and offer new generation products, they
would be able to generate higher growth in the near future. It is expected that the
rural income will rise in 2007, boosting purchasing power in the countryside.
However, the demand in urban areas would be the key growth driver over the long
term. Also, increase in the urban population, along with increase in income levels
and the availability of new categories, would help the urban areas maintain their
position in terms of consumption. At present, urban India accounts for 66% of total
FMCG consumption, with rural India accounting for the remaining 34%. However,
rural India accounts for more than 40% consumption in major FMCG categories
such as personal care, fabric care, and hot beverages. In urban areas, home and
personal care category, including skin care, household care and feminine hygiene,
will keep growing at relatively attractive rates. Within the foods segment, it is
estimated that processed foods, bakery, and dairy are long-term growth categories
in both rural and urban areas.
Availability of raw materials
Because of the diverse agro-climatic conditions in India, there is a large raw
material base suitable for food processing industries. India is the largest producer
of livestock, milk, sugarcane, coconut, spices and cashew and is the second largest
producer of rice, wheat and fruits &vegetables. India also produces caustic soda
and soda ash, which are required for the production of soaps and detergents. The
availability of these raw materials gives India the location advantage.
FMCG during Recession
At a time when the economy and industry sectors such as automobiles, aviation and
financial services are reeling from the global slowdown, the consumer goods sector in
India has managed to buck the trend with most companies posting double-digit growth in
net profits in the first half of fiscal 2009 backed by healthy sales
According to the recent reports, India's fast moving consumer goods industry has so far
been resilient to the slowdown in the economy and a dip in consumer sentiment. If we go
by the numbers for the past few months, the growth only seems to have got better when
compared to the earlier months.
As very categorically said by the Amway India Enterprises managing director and chief
executive, Mr. William Pinckney.
" I am not saying that our company (sector) is recession-proof but it is recession-resilient.”
This statement on the whole stands strong for most the leading players in the FMCG
sector.
ASIAN PAINTS
Asian Paints was formed in 1942 in India. Asian Paints is dealing in marine and
industrial coatings, automobile OEMs and refinishes, wood finishes, finish coats
and an ancillary product in decorative paints. It manufactures and markets paints.
The plants of the Group are located in:
Maharashtra
Gujarat
Andhra Pradesh
Uttar Pradesh
Tamil Nadu
Asian Paints is the largest paint company in India and the third-largest company
in Asia. It has a turnover of US$ 680 million. The company is spread across 21
countries and has 29 paint manufacturing facilities.
Asian Paints serves through its subsidiaries by the name of:
Berger International Limited
Apco Coatings
SCIB Paints
Taubmans
Some Facts about Asian Paints:
- Asian Paints was ranked among 200 Best small companies in the world for 2002
and 2003 and was presented as the 'Best under a Billion Award' by Forbes Global
Magazine;
- In Feb 2001, Asian Paints was also awarded as the Ninth Best Player in India by
the leading magazine called India Today;
- Asian Paints was ranked as the Fourth most admired company across industries
in India in a survey conducted by 'Economic Times' in January 2000;
NESTLE
Nestlé's relationship with India started in 1912. It started its trading with India as The Nestlé Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in the Indian market. Nestlé India is amongst India's 'Most Respected Companies' and amongst the 'Top Wealth Creators of India'.
Nestlé India is a subsidiary of Nestlé S.A. of Switzerland. Nestlé India is a company that provides Indian Consumers products with global standards and is committed to constant growth and shareholder satisfaction. Nestlé India has also provided opportunities of growth and employment to about 1 million people including farmers, suppliers of packaging materials, services and other goods.
Nestlé made its first investment in Moga in 1961. In 1967 Nestlé established its
next factory at Choladi (Tamil Nadu). At present, it has a number of factories in
different parts of India such as:
1.Punjab
2.Uttaranchal
3.Delhi
4.Gurgaon
5.Kolkata
6.Mumbai
7.Goa
8.Karnataka
9.Chennai
10.TamilNadu
Nestlé's Brands in India
Milk Products & Nutrition
.Nestléeverydaydairywhitener
.Nestléeverydayslim
.NestléeverydaYghee
.Nestlé milkmaid
.Nestléfresh'n'naturaldahi
.Nestléfresh'n'naturaLslimdahi
.NesTlEjeeraraita
.Nestle curds
.Nestle milk
.Nestléslimmilk
.NestlEmilkmaidfruityoghurt
Beverages
.Nescafe classic
.Nescafe sunrise
.Nestlémilo
.Nescafe3in1
.Nescafekoolerz
Prepared Dishes and Cooking aids
.Maggi2-MINUTENoodles
.MaggiVegetableAttaNoodles
.MaggiDalAttaNoodles
.MaggiRiceNoodlesMania
.MaggiSauces
.MaggIPizzAMazza
.MaggiHealthySoups
Chocolates and Confectionary
.NestléKitKat
.NestléKitKatLite
.NestléMilkyBar
.Nestle Munch
.NestléMilkChocolate
.NestlEFunBar
.Polo
.PoloPowermint
.NestléMunchPopChoc
. Nestlé Éclairs
DABUR
Dabur India Ltd. is the fourth largest FMCG Company in India. Dabur deals in
Health care and Personal care products. Today, Dabur has a turnover of
Rs.1899.57 crores. The market penetration of Dabur is of about 1.5 million retail
outlets all over India with 47 C& F agents and more than 5000 distributors. Dabur
India is divided into 2 major strategic business units:
Consumer Care Division
Consumer Health Division
Dabur has 3 subsidiary group companies:
1. Dabur Foods
2. Dabur Nepal
3. Dabur International- Further divided into Asian Consumer Care in Bangladesh,
African Consumer Care in Nigeria and Dabur Egypt.
Dabur's Brands
Vatika
Anmol
Hajmola
Dabur Amla
Dabur Chyawanprash
Dabur Lal Dant Manjan
CADBURY
Cadbury entered India in 1948 by importing chocolates. And now, it has
manufacturing facilities in Mumbai, Pune, Gwalior, Bangalore, and Himachal
Pradesh and 4 sales offices at Mumbai, Kolkata, New Delhi, and Chennai in India.
The corporate office is in Mumbai. Cadbury is into the business of Chocolate
Confectionary, Milk Food Drinks, and Candies.
Some of Cadbury's key brands are:
Chocolates
Cadbury Dairy Milk
5 Star
Perk
Éclairs
Celebrations
Milk food drinks
Bournvita
Candy
Halls.
MARICO
Marico is a leading Indian group operating in
Consumer Products
Aesthetic Services
Global Ayurvedics Business Marico has generated a turnover of Rs. 11.5
billion (US$ 250 Million) during 2005-06. It is a leading Indian group in
Consumer Products and Services. Marico's well-known brands are:
o Parachute
o Saffola
o Sweekar
o Hair & Care
o Nihar
o Shanti
o Mediker
o Revive
o Kaya
o Sundari
o Aromatic Fiancee
o HairCode.
GCMMF(AMUL)
Gujarat Cooperative Milk Marketing FederationGujarat Cooperative Milk Marketing Federation (GCMMF) is the largest food product marketing organization of India. It aims to provide good returns to the farmers and also to fulfill the requirements of consumers by giving them quality products.
Amul was formed in 1946 by an apex co-operative organization, Gujarat Cooperative Milk Marketing Federation. AMUL means "priceless" in Sanskrit. Amul products are used by millions of people. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk, and Amulya has made Amul one of the leading
food brands in India. Amul products are sold at reasonable prices. Amul has a
turnover of Rs. 37.74 billion in 2005-06
Amul's Products
Infant Milk Range
Amul Infant Milk Formula 1
Amul Infant Milk Formula 2
Amulspray Infant Milk Food
Milk Powders
Amulya Dairy Whitener
Sagar Skimmed Milk Powder
Sagar Tea and Coffee Whitener
Amul Full Cream Milk Powder
Bread Spreads
Amul Butter
Amul Lite Low Fat Bread Spread
Amul Cooking Butter
Pure Ghee
Sagar Pure Ghee
Amul Pure Ghee
Amul Cow Ghee
Cheese Range
Amul Emmental Cheese
Amul Gouda Cheese
Amul Malai Paneer (cottage cheese)
Utterly Delicious Pizza
Amul Pasteurized Processed Cheddar Cheese
Amul Pizza (Mozarella) Cheese
Amul Shredded Pizza Cheese
Amul Processed Cheese Spread
Mithaee Range (Ethnic Sweets)
Amul Mithaee Kulfi Mix
Avsar Ladoos
Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)
Amul Amrakhand
Amul Mithaee Gulabjamuns
UHT Milk Range
Amul Shakti
Amul Taaza
Amul Gold
Amul Lite Slim-n-Trim Milk
Amul Fresh Cream
Amul Snowcap Softy Mix
Fresh Milk
Amul Slim & Trim Double Toned Milk
Amul Saathi Skimmed Milk
Amul Taaza Toned Milk
Amul Gold Full Cream Milk
Amul Cow Milk
Amul Shakti Standardized Milk
Curd Products
Yogi Sweetened Flavored Dahi
Amul Masti Dahi
Amul Masti Spiced Butter Milk
Amul Lassee
Amul Ice creams
Royal Treat Range
Nut-o-Mania Range Nature's Treat
Sundae Range
Assorted Treat
Utterly Delicious
Chocolate & Confectionery
Amul Milk Chocolate
Amul Fruit & Nut Chocolate
Brown Beverage
Nutramul Malted Milk Food
Milk Drink
Amul Kool Flavored Milk
Amul Kool Cafe
Health Beverage
Amul Shakti White Milk Food
HUL
Hindustan Unilever Limited also called Hindustan Lever Limited (HLL) was
established in 1933 as Lever Brothers India Limited. Hindustan Lever
Limited (HLL) is India's largest Fast Moving Consumer Goods Company,
with a customer base of 2 out of every 3 Indian in the category of Home &
Personal Care Products and Foods & Beverages. The company has
combined volumes of about 4 million tonnes and sales of Rs.10, 000 crores.
HLL is also one of the country's largest exporters; the Government of India
has recognized HLL as a Golden Super Star Trading House
Some of HLL brands are:
Kwality Walls Ice Cream
Hamam
Lifebuoy
Rexona
Lux
Liril
Moti Soaps
Breeze
Lipton Tea
Brooke Bond Tea
Bru Coffee
Pepsodent
Close Up
Surf
Rin
Wheel Laundry Detergent
Kissan
Annapurna
Pond's
Vaseline
Fair & Lovely
Lakmé
Clinic Plus
Clinic All Clear
Sunsilk and Lux Shampoos
Vim
Ala Bleach
Domex
Pureit Water Purifier