SATURDAY FEST

FMCG INDUSTRY
1. 2. 3. 4. Mayuri Rane Satish Mourya Surpiya Sawant Umang Shah

About FMCG
The Fast Moving Consumer Goods (FMCG) sector in India has been growing at a healthy CAGR of 11% over the last decade The industry is volume driven and is characterized by low margins. Modern retail formats too have contributed in a major way in pushing the growth in the FMCG sector. The Indian FMCG sector is the fourth largest sector the economy with a total market size of Rs. 167,100cr The market is estimated to grow to US$ 100 billion by 2025, according to market research firm Nielsen In the last decade the FMCG sector has grown at an average of 11% a year; in the last five years, annual growth accelerated to 17% Rural India Contributes one third (1/3) of FMCG sales in India

Industry Overview
Rural India accounts for more than 700 Million consumers or 70% of the Indian population and accounts for 40% of the total FMCG market Also with changing lifestyle and increasing consumer demand, the Indian FMCG market is expected to cross $80 billion by 2026 in towns with population of up to 10 lakh

Strong income growth is set to continue in future as well; IMF forecasts point to a CAGR of 8.8 per cent over 2012-17 to USD 2,428.50
The sector has been witnessing healthy FDI inflows over the years; in fact, during FY01-13*, FMCG accounted for 1.9 per cent of total inflows Fmcg products have a quick turnover and relatively low cost .

Segments

Household Care

Fabric wash , Household cleaners

Personal Care

Oral care, hair care, skin care, cosmetics/deodorants, perfumes, feminine hygiene and paper products

Food and Beverages

Health beverages staples/cereals, bakery products, snacks, chocolates, ice cream, tea/coffee/soft drinks, processed fruits and vegetables, dairy products, and branded flour

OTC products and ethicals

Health Care

Food and Beverages

Within FMCG, food processing was the largest recipient; its share was 53 per cent India is one of the fastest growing branded restaurants markets in the world, where the organized eating-out market is currently estimated at US$ 2 billion and growing at a CAGR of 25% The Food and Beverages segment comprises of the food processing industry, health beverage industry, bread and biscuits, chocolates & confectionery, Mineral Water and ice creams The three largest consumed categories of packaged foods are packed tea, biscuits and soft drinks

Personal Care
Personal care segment includes personal wash products, hair care products, oral care products, cosmetics etc. The Indian skin care and cosmetics market is valued at $274 million and is dominated by HUL, Colgate Palmolive, Gillette India and Godrej. The coconut oil market accounts for 72 per cent share in the hair oil market. The hair care market can be segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels.

Household Care
The detergents segment is growing at an annual growth rate of 10 to 11 per cent during the past five years. The preference is given to detergents in urban area compared to bars. Household care segment is featured by intense competition and high level of penetration. With rapid urbanization, emergence of small pack size and sachets, the demand for the household care products is booming. In washing powder segment, HUL is the leader with 38 per cent of market share.

Market Opportunity
Vast Rural Market:-

Rural India accounts for more than 700 Million consumers, or ~70 per cent of the Indian population and accounts for ~50 per cent of the total FMCG market.
The working rural population is approximately 400 Millions. There is an untapped market and most of the FMCG Companies are taking different steps to capture rural market share. The market for FMCG products in rural India is esti-mated ~ 52 per cent and is projected to touch ~ 60 per cent within a year.

Common Stock Comparison

Sales
Company Name ITC HUL Nestle Dabur Godrej Colgate Marico GSK Consumer* Britannia 2012 2013E

EBITDA
2012 2013E

Net Income
2012 2013E

24,798.00 29,183.40 8,474.00 10,621.80 6,162.37 7,277.70 22,987.73 25,826.40 3,034.96 3,500.40 2,790.66 3,025.20 9,125.40 11,124.70 1,871.60 5,305.42 5,960.30 4,850.94 5,646.10 2,623.85 3,051.30 3,996.81 4,850.99 3,118.30 3,643.30 5,460.75 6,355.70 2,311.20 1,187.10 1,429.10 644.11 726.72 446.47 317.11 413.2 199.55 759.4 662 514.5 432.01 498.5 264.6

890.17 1,044.90 840.18 1,010.70 509.14 474.09 477.9 286.25 691.3 642.76 580.4 412.6

ITC Indian Tobaco Company

Chairman:- Yogesh Chander Deveshwar ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports It is the leading cigarette manufacturer based out of Kolkata with a 67% share of the market by volume and 83% by value The company is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery ITC's Agri-Business is one of India's largest exporters of agricultural products ITC is one of the eight Indian companies to figure in Forbes A-List for 2004, featuring 400 of "the world's best big companies". Forbes has also named ITC among Asia's'Fab 50' and the World's Most Reputable Companies

PRODUCTS ITC
Cigarettes

Foods: Kitchens of India; Ashirvad, Minto, Sunfeast, Candyman, Bingo, Yippee, Sunfeast
Pasta brands in Ready to Eat, Staples, Biscuits, Confectionery, Noodles and Snack Foods

Apparel: Wills Lifestyle and John Players brands Personal care: Fiama di Wills, Vivel, Essenza di Wills, Superia, Vivel di Wills brands of products in perfumes, haircare and skincare Stationery: Classmate and Paper Kraft brands Safety Matches and Agarbattis Paperboard, Specialty Paper, Graphic and other Paper Infotech (through its fully owned subsidiary ITC Infotech India Limited)

ITC's hotels

HUL Hindustan Unilever Ltd.

Chairman:- Harish Manwani MD & CEO:- Nitin Paranjpe HUL, a 51% subsidiary of Unilever Plc, is the largest Indian FMCG company (excluding cigarettes) based out of Mumbai

It has a portfolio of over 50 brands across categories such as soaps, detergents, foods, ice cream and water purifiers
The key strengths of the company are an extensive distribution network (its products are available in over 6mn outlets), powerful brands (most of its brands are market leaders and straddle price segments), strong balance sheet, and high-quality management

Products HUL
Personal wash:- Lux, Lifebuoy, Liril, Hamam, Breeze, Moti, Dove, Pears and Rexona Laundry:- Surf Excel, sun light, Rin, Wheel & Ala bleech Dishwasher :- Vim Disinfectants:- Domex, cif Foods:- Kissan(Jam,Ketchup,Squashes), Annapurna(Aata and salt), Knorr Soups, Modern Bread Ice-cream:- Kwality Walls Tea:- Brooke bond, Lipton, Taj mahal tea Coffee:- Brooke bond bru Beauty Products:- Fair & Lovely, Lakme, Ponds, Vaseline and Aviance Hair-Care:- Sunsilk naturals, Clinic , Dove and Lifebouy Oral-Care:- Pepsodent and Close-up Deo spray:- Axe and Rexona Water Purifier:- Pureit

Marico
Chairman & MD:- Harsh Charandas Mariwala

Marico has evolved into one of the leading Indian FMCG companies from a coconut oil manufacturer over the past few years It has positioned itself on the beauty and wellness platform and caters to the hair care, health care, and skin care segments The company operates in India, the Middle East, SAARC countries, Egypt, Malaysia, South Africa, Singapore, and Vietnam and is headquartered in Mumbai, India

Its manufacturing facilities are located at Goa, Kanjikode (Kerala), Jalgaon (Maharashtra),Saswad(Maharashtra), Pondicherry, Dehradun (UP) and Daman
Marico is present in more than 25 countries across Asia and the African continent

Products Marico
Parachute Saffola Hair&Care Nihar Mediker Revive Manjal Kaya Skin Clinic Livon Set Wet Zatak Fiancee HairCode Eclipse Xmen Hercules Caivil Code 78 Black Chic.

Dabur
Chairman Anand Burman (Dr.) Director Mohit Burman Dabur is one of Indias most trusted names and the worlds largest Ayurvedic and Natural Health Care Company and is the second largest FMCG company in India, in terms of Product portfolio

Dabur has three divisions in India apart from its international operations : First, The Consumer care division (CCD) offers a wide range of products in hair care, oral care, health supplements, digestives and candies, and baby and skin care products, based on ayurveda Second, The consumer health division (CHD) includes overthecounter(OTC) products, Asavs, and branded ethical, and classic products. The CHD division has been merged with CCD to leverage the companies distribution networks The third, Dabur Foods Ltd produces fruit juices, cooking pastes, sauces, and items for institutional food purchases

Products Dabur
Health Care:- Chawanprash, Dabur Honey, Pudinhara, Hajmola, Honitus, Dabur Lal Tail Personal Care- Dabur amla, Vatika hair oil, Dabur Babool, Dabur red, Gulabari, FEM, Uveda Foods- Real, Activ, Burrst, HomMade, Lemonez, Capsico, Glucose-D, Hajmola Home Care- Sanifresh, Odonil, Odomus, Odopic Consumer Health- Ethical:- Bronocrid, Rheumatil, Lipstat, Mensta Professional Range:- OxyLife, FEM Facial, FEM body Bleech

Godrej Consumer Products

Chairman A B Godrej Director Jamshyd N Godrej Director Nadir B Godrej
Godrej Consumer is among the leading FMCG companies in India - second largest player in soaps and largest in hair color Godrej Consumer brands, which include Good knight, Cinthol, Godrej No. 1, Expert, Hit, Jet, Fairglow, Ezee, Protekt and Snuggy, among others, are household names across the country Major brands include Godrej Hair Dye (liquid and powder), Godrej Kesh Kala oil and Nupur hair dyes in the lower end and Renew and Coloursoft in the higher segment and give stiff competition to foreign brands in the hair colour segment In June 2009, GCPL completed the acquisition of 49% stake in Godrej Sara Lee Limited which had several leading brands such as Good Knight, JET, HIT, Brylcreem and KIWI The company employs 950 people and has three state-of-the-art manufacturing facilities at Malanpur (M.P.), Guwahati (Assam) and Baddi (H.P.)

Products Godrej Consumer Products

Home Care:- Good Knight, HIT, Jet, Ezee, Godrej Dish Wash, Genteel
Personal Wash:- Cinthol, Godrej Protekt, Godrej No.1, Godrej Fairglow, Godrej Vigil, Crowning Glory, Shikakai, Swastik, Godrej Shaving grow.

Hair Care:- Godrej Expert, Renew, Colour soft, Nupur, Kesh Kala, Kali mehndi, Anoop Hair oil.
Air Care:- Godrej Aer twist, Godrej Aer Click, Godrej Aer Spray.

SWOT Analysis
StrengthsLow operational costs. Presence of established distribution networks in both urban and rural areas. Presence of well-known brands in FMCG sector. Favorable governmental Policy: Indian Government has pass the policies aimed at attaining international competitiveness through lifting of the quantitative restrictions, reducing excise duties, 100 per cent export oriented units can be set up by government approval and use of foreign brand names etc. Foreign Direct Investment (FDI): Automatic investment approval up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies investment is allowed for most of the food processing sector except malted food, alcoholic beverages and those reserved for small scale industries (SSI).

OpportunitiesUntapped rural market, changing life style. Rising income levels i.e. increase in purchasing power of consumers. Large domestic market with more population of median age 25. High consumer goods spending. India is the largest milk producer in the world, yet only around 15 per cent of the milk is processed. The organized liquid milk business is in its infancy and also has large long-term growth potential. Even investment opportunities exist in value-added products like desserts, puddings etc. Only about 10-12 per cent of output is processed and consumed in packaged form, thus highlighting the huge potential. India is under penetrated in many FMCG categories as shown in below diagram. With rise in per capita incomes and awareness, the growth potential is huge. Lower price and smaller packs are also likely to drive potential up trading for major FMCG products

WeaknessLower scope of investing in technology and achieving economies of scale, especially in small sectors Low exports levels "Me-too products, which illegally mimic the labels of the established brands. These products narrow the scope of FMCG products in rural and semi-urban market.

ThreatsRemoval of import restrictions resulting in replacing of domestic brands Tax and regulatory structure Rural demand is cyclical in nature and also depends upon monsoon

Conclusion
More and more people these days have started involving themselves in this field as; it creates tremendous job opportunities for them. It is a steady, diverse and a highly profitable industry where a person can do a lot of work.

The jobs in this field range from sales and supply chain, investment, promotion, H.R development, and general management. It also allows you to trade directly with the various traders online.