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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 B C D E G COMPANIES Britannia Colgate Palmolive(India) ltd. Dabur India Limited Emami Limited GlaxoSmithKline Consumer Healthcare Limited Godfrey Phillips India Limited H I M N P R T Godrej Consumer Products Limited Hindustan Unilever Limited ITC Limited Marico Limited Nestle India Limited Nirma Limited Procter & Gamble Hygiene and Health Care Limited Radico Khaitan Limited Tata Tea Limited

U W

United Breweries LimitedUnited Spirits Limited Weikfield Products Company India Private Limited

THE TOP 20 COMPANIES IN FMCG SECTOR S. Companies

NO. 1. Hindustan Unilever Ltd. 2. ITC (Indian Tobacco 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Company) Nestl India GCMMF (AMUL) Dabur India Asian Paints (India) Cadbury India Britannia Industries Procter & Gamble Hygiene and Health Care Marico Industries Colgate-Palmolive (India)ltd. Gillette India ltd. Godfrey Phillips Henkel spic Johnson & Johnson Modi Revlon Nestle Nirma ltd Amul India 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
Nestl's relationship with India started in 1912. It started its trading with India as The Nestl Anglo-Swiss Condensed Milk Company (Export) Limited, importing

and selling finished products in the Indian market. Nestl India is amongst India's 'Most Respected Companies' and amongst the 'Top Wealth Creators of India'. Nestl India is a subsidiary of Nestl S.A. of Switzerland. Nestl India is a company that provides Indian Consumers products with global standards and is committed to constant growth and shareholder satisfaction. Nestl India has also provided opportunities of growth and employment to about 1 million people including farmers, suppliers of packaging materials, services and other goods.

Nestl made its first investment in Moga in 1961. In 1967 Nestl 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 Nestl's Brands in India

Milk Products & Nutrition .Nestleverydaydairywhitener .Nestleverydayslim .NestleverydaYghee .Nestl milkmaid .Nestlfresh'n'naturaldahi .Nestlfresh'n'naturaLslimdahi .NesTlEjeeraraita .Nestle curds .Nestle milk .Nestlslimmilk .NestlEmilkmaidfruityoghurt Beverages .Nescafe classic .Nescafe sunrise .Nestlmilo .Nescafe3in1 .Nescafekoolerz Prepared Dishes and Cooking aids .Maggi2-MINUTENoodles

.MaggiVegetableAttaNoodles .MaggiDalAttaNoodles .MaggiRiceNoodlesMania .MaggiSauces .MaggIPizzAMazza .MaggiHealthySoups Chocolates and Confectionary .NestlKitKat .NestlKitKatLite .NestlMilkyBar .Nestle Munch .NestlMilkChocolate .NestlEFunBar .Polo .PoloPowermint .NestlMunchPopChoc . Nestl clairs 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, Some Chocolates

Milk

Food

Drinks, key

and brands

Candies. are:

of

Cadbury's

Cadbury Dairy Milk 5 Star

Perk clairs 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 o o o o o o o o o o

Parachute Saffola Sweekar Hair & Care Nihar Shanti Mediker Revive Kaya Sundari Aromatic Fiancee

HairCode.

GCMMF(AMUL) Gujarat Cooperative Milk Marketing Federation

Gujarat 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 Infant Milk Range

Products

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 Lakm Clinic Plus Clinic All Clear Sunsilk and Lux Shampoos Vim Ala Bleach Domex Pureit Water Purifier