This presentation was prepared by our Team Member Mr. Suhag Mistry. It is based on the FMCG Sector in India.

1. F M C G
R E P O R T : I B E F
( I N D I A N B R A N D
E Q U I T Y
F O U N D AT I O N )
M A R C H 2 0 1 7

3. OBJECTIVE
• To share FMCG industry details with
team so that
– I can increase my knowledge by
preparing and presenting
– Our team can share the details
with customers as and when
required

4. FMCG
• During 2016–2020, FMCG market in India is expected
to reach USD103.7 billion by 2020 from USD 49
billion
– Expected to grow at a CAGR of 20.6 %
• Total consumption expenditure to reach nearly
USD3600 billion by 2020 from USD1411 billion in
2014
– Expected to grow at a CAGR of 16.89 %
• The Rural FMCG market in is expected to reach
USD100 billion by 2025.
– As of 2016, rural FMCG consumption stands at an estimated
USD29.4 billion
– Expected to grow at a CAGR of 14.6 %

5. FMCG
• Modern retail market is expected to grow from
USD60 billion to USD180 billion during 2015-2020F
– Expected to grow at a CAGR of 24.57 %
• India’s middle income population estimated to reach
267 million by 2016 from 160 million in 2011
– Expected to grow at a CAGR of 10.8 %
• Rural India’s per capita disposable income is
estimated to rise to USD631 in 2020 from USD516 in
2015E
– Expected to grow at a CAGR of 4.11 %

6. ADVANTAGES
• Growing Demand:
– Rising incomes and growing youth population have been
key growth drivers of the sector. Brand consciousness has
also aided demand
– 1st Time Modern Trade Shoppers spend is estimated to
triple to USD1 billion by 2015
– Tier II/III cities are witnessing faster growth in modern trade

7. ADVANTAGES
• Attractive opportunities:
– Low penetration levels in rural market offers room for
growth
– Disposable income in rural India has increased due to the
direct cash transfer scheme
– Growing demand for premium products
– Exports is another growth segment
– E-commerce companies like Amazon are strengthening
their business in FMCG sector, by positioning their platform
pantry as front line offering to drive daily products sales.

8. ADVANTAGES
• Higher investments:
– Many players are expanding into new geographies &
categories
– Modern retail share is expected to triple its growth from
USD60 billion in 2015 to USD180 billion in 2020
– With an investment of USD 254.50 million, Patanjali is
planning to setup a food & herbal park in UP
– Wipro is diversifying & expanding its product range in
energy drinks, detergents & fabric conditioners.
– Nestle is looking to expand its portfolio in premium
durables cereals, pet care, coffee, & skin health accessing
the potential in India.

9. ADVANTAGES
• Policy support:
– Investment approval of up to 100 per cent foreign equity in
single brand retail and 51 per cent in multi-brand retail
– Initiatives like Food Security Bill and direct cash transfer
subsidies reach about 40 per cent of households in India
– The minimum capitalisation for foreign FMCG companies to
invest in India is USD100 million

10. MARKET OVERVIEW AND
TRENDS
FMCG
Food &
Beverages
19%
Health Care
31%
Household and
Personal care
50%
Source: Dabur, TechSci Research

11. GROWTH DRIVERS OF INDIA’S FMCG SECTOR
FMCG
growth
drivers
Rising
incomes
driving
purchase
Desire to
experiment
with brands
Evolving
consumer
lifestyle
New
product
launches
Growing
rural
market
Growth of
modern
trade
Strong
distribution
channel
Availability
of
online
grocery
stores
Increasing
consumer
demand
Greater
awareness
of
products,
brands
Government
reforms to
encourage
FDI
inflow and
market
sentiments

12. EVOLUTION OF THE INDIAN
FMCG SECTOR
• FMCG is the fourth largest sector in the Indian economy
• Household and Personal Care is the leading segment,
accounting for 50 per cent of the overall market.
– Hair care (23 per cent) and Food & Beverages (19 per cent)
comes next in terms of market share
• Growing awareness, easier access, and changing lifestyles
have been the key growth drivers for the sector
• Retail market in India is estimated to reach USD1 trillion
by 2020 from USD600 billion in 2015,
– Expected to grow at 20 per cent per annum
• People are gracefully embracing Ayurveda products

13. EVOLUTION OF THE INDIAN
FMCG SECTOR

14. TRENDS IN FMCG REVENUES
OVER THE YEARS (USD BILLION)

15. MARKET BREAK-UP BY
REVENUE (FY16)

16. RURAL SEGMENT QUICKLY
CATCHING UP
• In 2015, rural India
accounted for more than
40 per cent of the total
FMCG market
• Total rural income, which
is currently at around
USD572 billion, is
projected to reach USD1.8
trillion by FY21
India’s rural per capita disposable income is estimated to increase at a CAGR
of 4.4 per cent to USD631 by 2020

17. TOP 10 FMCG COMPANIES
OF INDIA 2017 (13 FEB 2017)
• Hindustan Unilever
Limited (HUL)
• ITC Limited
• Dabur India Ltd
• Britannia Industries
• Godrej Consumer
Products Limited
(GCPL)
• Parle Agro
• Amul
• Pidilite Industries
• Patanjali Ayurved
• Haldiram’s

18. STRATEGIES ADOPTED
• Promotions & offers
• Research online, Purchase offline
• Era of product innovation (No Loyalty of customers)
• Customization
– Parent company with different procing brands (Parachute
and coco-raj)

19. GROWTH DRIVERS FOR
INDIA’S FMCG SECTOR
• Shift to organised market
• Increase in penetration
• Easy access
• Rural consumption

20. KEY M&A DEALS IN THE
INDUSTRY

21. KEY M&A DEALS IN THE
INDUSTRY