FMCG Sector

Presented by:
Vimi bhanushali 05
Jome mathew 21
Sagar hansraaj
Vineet suchak 55
Kinjal upadhyay 59
Analysis Of Indian
FMCG Sector
INTRODUCTION
The Fast Moving Consumer Goods Sector is
the fourth largest sector of Indian economy
with total market size of more than 60000
crore.

The FMCG sector in India is expected to

grow at a compounded annual growth rate
(CAGR) of 9% to a size of Rs 1,43,000 crore
by 2013 from Rs 93,000 crore at present.
Contd………..
A well-established distribution
network, intense competition between
the organized and unorganized
segments, low operating cost, strong
branding characterizes the sector.
FMCG – Evolution
 1950’s-80’s – Low Investment in the sector
 Low purchasing power
 Govt. emphasis on small scale sector
 HLL and other company’s urbane focus
 Post liberalization
 Entry of MNCs
 Focus shifted to getting to rural consumer first
 Others, like Nestle, remained with the urban population
 Latest fad to hit the market is the ‘sachet’ bug.
 Mushrooming of regional brands
 Nirma enters and changes the focus to ‘Value for Money’ in the 70’s
 Post liberalization, Jyothy Laboratories, ‘Ghari’ Detergent and ‘Anchor’
toothpaste giving the nation-wide brands a run for their money.
INDUSTRY SEGMENTS
Personal Care.

Household Care.

Branded and Packaged Food and

Beverages.
 Market Players In Indian FMCG Sector

Domestic Players:-
ITC Limited
Marico
Nirma Limited
Jyothy Laboratories Ltd.
Amul ltd .
Foreign Players:-
Cadbury India Limited
Cargill
Coca Cola
Colgate Palmolive India
Hindustan Unilever Limited
Nestle India Limited
P&G
PepsiCo
Trends In FMCG Sector
The FMCG sector has been registering double-digit
growth in sales since the last couple of years.
Currently, with annual revenues of US$ 14. 74 billion, it
is the one of the most promising sectors.
 The FMCG sector is witnessing rapid growth in rural
areas and is estimated to grow by 40 per cent
compared to the growth of 25 per cent in urban areas.
FMCG companies have acquired about 15 companies
and have spread their presence in more than a dozen
countries.
Indian FMCG Market Size
(In US $ Billion)

(Source: IBEF FMCG Analysis)

 Rise in Disposable Income
With increasing disposable income and
subsequent rise in quality of living and hygiene
concerns, the average Indian’s spending on
grocery and personal care products will likely
increase.

 Currently, the average Indian spends about

48%, also the majority, of his total income on
groceries (40%) and personal care products
(8%).
Rise In Disposable Income
(In $Thousand)

(Source: Euro Monitor Goldman Sachs BRIC Report)

Competition….
Significant Presence of Unorganized Sector –

 Basic technology for most products is fairly simple

and easily available.
 The small-scale sector in India enjoys exemption/
lower rates of excise duty, sales tax etc. This makes
them more price competitive.
 A highly scattered market and poor transport
infrastructure limits the ability of MNCs and national
players to reach rural areas and small towns.
 Low brand awareness enables local players to market
their fake look-alike brands.
 SWOT Analysis: Whole Industry!

Strengths
 Well established distribution networks extending to the
rural areas
 Backed by strong brands
 Low cost operations
Weakness
 Low export levels
 Small scale sector reservations limit ability to invest in
technology and achieve economies of scale
SWOT Analysis: Whole Industry!

Opportunities
 Large domestic market
 Export potential
 Increasing income levels will result in faster revenue
growth
Threats
 Imports
 Tax & Regulatory Structures
 Slowdown in Rural Demands
FMCG Sector: Policy
• Reduce Excise Duties

 Automated Foreign direct Investments

 License Abolishment From Food Processing Industry

 Easing Prices Of Raw Materials

 100% FDI For NRIs & PIOs For Setting Up Units In India

 Subsidies In Taxes Specially VAT & Excises

COMPANY PROFILE….
 Products of itc ltd

AGRI-
PACKAGI
BUSINES
HOTELS
FMCG
I.T
NG
S
 FMCG products of ITC

Cigarettes & Cigars Personal Care

Foods Education and Stationery

Safety Matches
Lifestyle Retailing

Agarbattis
Pricing of itc ltd

Low and middle income group

Going rate pricing strategy

Place strategy of itc ltd

 Factory outlets all over India helping in acquiring maximum market

Promotion strategy of itc ltd
 s.w.o.t. analysis of itc ltd.

●
Brand ●
Dependent on
●
Diversified
tobacco revenues
company

S W

O T

●
Competitors
●
Large market ●
Increasing tax on
share
cigarettes
 Amul–Business
Amul – BusinessModel
Model

 Every day Amul collects 7

Raw Material
million liters of milk from 2.6
million farmers (many
illiterate), converts the milk
Condensed Packaged Dried Milk
into branded, packaged Ghee Milk Skimmed
Pasteurization
products, and delivers Butter Ice-cream milk power
Cream Beverages
goods to over 500,000 retail
outlets across the country.
 Defense Strategy
• Moving consumers from loose milk to packaged milk
and gradually move them up the value chain (tetra
pack to beverages)
• Being exposed to a brand, it is natural for a customer
to try more products
Reasons for success
Robust Supply Chain
The vast and complex supply chain

Hierarchical network of co-operatives

Stretches from small suppliers to large fragmented

market
Low cost strategy
Amul adopted a low-cost price strategy to make its

products.
Affordable and attractive to consumers by

guaranteeing them value for money

Diverse product mix
Amul butter
Milk Powder
Ghee
Cheese
Chocolate
Shrikhand
Ice-cream
Nutramul
Milk
Strong Distribution Network
Amul products are available in over 5,00,000 retail

outlets across.
It has strong distributor network of over 3,500

throughout India
47 depots with dry and cold warehouses to buffer

inventory of the range of products.

SWOT Analysis
Strengths
Largest food brand in India
High Quality, low price
World’s largest pouched milk brand
Highly diverse product mix
Robust distribution network

Weaknesses
Risk of highly complex supply chain
Strong dependency on weak infrastructure
Alliance with third parties who do not belong to the
organized sector
Opportunities
International markets
Diversify product portfolio to enter new product
categories
Expand existing categories like processed food,
chocolates etc
Threats
Competitors
Growing prices of milk and milk products
Ban of exports of milk power
Conclusion
Middle Class Customer Population!
Domestic Consumption!
High Population!
The Finest Set Of Perfect Competition In World!
You May Not Purchase Software!
You May Not Purchase Cement!
You May Not Buy Clothes From A Retail Outlet!
You May Aside Automobiles!
But Soaps, Toothpastes, Tea, Coffee & So On Are Basic Need
For Us!
Thus FMCG Is On & On!!!!!!!!!!!!!!!