Industry Analysis

FMCG SECTOR

Presented by,
Sachin R
Preetham Surendra
Suhashini S G
Amulya V
Yaswanth Sai Ram
Aravind
 History and Growth
Potential of FMCG
 One of the fastest growing sector in early 1980’s till
now.

 FMCG sector is the key contributor of Indian

economy.

 Its principal constituents are Household care,

Personal care, Food & Beverages.

 Characterized by a well-established network, low

penetration level, low operating cost, lower Per
capita consumption and intense competition.
 100

Revenue in $US Billion 80 83.3

68.4
60 57.4
43.1 49
40

20

0
2015
2016
2017
2018
2019

 We can see the gradual increase in revenue

generation in India over last 5 year contributing
$83.3 Billion USD in 2019
Driving factors of FMCG
High
potential
and large
market

Healthy
Spending
FDI
pattern
inflows

Growth
Drivers Increasing
per capita
Rise of rural
income of
consumers
urban
population

Growing
Changing
popularity
Profile and
of
Mind Set of
organized
Consumer
retail
FMCG Segments
Contribution in %
Food and Personal
Beverages Care 16

13
51

20

Home care Health Care

Food and Beverages Personal care

Home Care Health Care
ITC is the key driver of growth in the
FMCG

60,000
52,035
50,000

40,000 34,487
30,000

20,000
11,216
8,684 8,533
10,000

0
ITC HUL Nestle Britannia Parle Agro
Revenue in Crore
Good Food, Good Life
 Nestle Profile

 Nestlé was formed in 1905 by the merger of the

Anglo-Swiss Milk Company
 Nestle is a Swiss multinational food and drink
processing conglomerate corporation
 It is the largest food company in the world,
measured by revenues and other metrics, since
2014
 Nestlé's products include baby food, medical food,
bottled water, breakfast cereals, coffee and tea,
confectionery, dairy products, ice cream, frozen
food, pet foods, and snacks
 Milk products
and nutrition

Prepared
Beverages Segments dishes and
of Nestle cooking aids

Chocolate,
confectionary
and biscuits
 Nestle India is best play on
fast growing packaged food
space
9%
• Milk products and 17% 28%

nutrition, prepared dishes

are improving industry
growth
46%
• Nestle has lost meaningful
market share in
chocolates in 5-7 years but
gaining back due to new
chocolate launches
Milk products & nutrition
• Beverage segment will Packaged dishes and cooking aids
lead growth in medium Chocolates and confectionaries
term.
Beverages
 Maggi net sales increased to 12,008 Cr in 2019
owning 70% of market share in noodle
segment
Market share
14,000
12,008 12%
12,000 10,500 10,150
10,000
8,200 7,850 18%
8,000
6,000
70%
4,000
2,000
0 Yippee Others
2012 2014 2015 2017 2019
Net Sales in Crore India’s Instant noodle
market share in worth
4,100 Cr
 SWOT Analysis
Strength
• World Renowned brand
• Strong customer connect
Weakness
• Negative word of mouth
• Robust distribution channel
• Brand Structure
• Broad Product Portfolio

Opportunities
• Strategic Alliance
• Can focus more on R&D
• Penetration to rural markets
Threats
• Tough competition
• Price of Commodities
Porter’s Five Forces Analysis

Competitive Rivalry is high

Against Maggi due to competitors like Yippie,
Sun-feast etc

Cont...
Porter’s Five Forces Analysis

 Threats of New Entrants- High

Easier entry for competitors to industry which
gives higher threat for Maggi

Cont...
Porter’s Five Forces Analysis

 Bargaining Power of Buyers- High

Maggi has no bargaining power against
buyers of its product due to diminished brand
loyalty

Cont...
Porter’s Five Forces Analysis

 Bargaining Power of Suppliers- Low

Suppliers buy Maggi in bulk providing them a
large business so bargaining power of
suppliers is low

Cont...
Porter’s Five Forces Analysis

 Threats of Substitutes-High
Substitutes are easily available and there is no
switching cost
So what’s next?

 Maggi to witness a growth at the rate of 3% from

12,008 Cr to 12,346 Cr in 2020

 Nestle planning to launch 36 products in India

creating value to customer to compete among
top FMCG companies like ITC, HUL

 Investment
Nestle India share for long term investment to
increase to 28517 INR from 15000 INR in 5years
 How does FMCG future
look like?
Market cap to reach $1.1 trillion. By 2020

Revenue to increase to $103.7 Billion USD

Innovation in packaging of FMCG

Rural FMCG industry to grow exponential

in the upcoming years.
THANK YOU

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QUESTIONS?