Fmcg Sector

FMCG SECTOR

Industry Overview

* The Indian FMCG sector is estimated at US$ 25 billion (2008) by FICCI.

* The sector is estimated to grow at a CAGR of 12%.

* By 2018 the sector will be tripled in size i.e. US$ 74 billion.

FMCG Industry Category Breakup

* Food and Beverages – 53%

* Personal Care – 20%

* Tobacco – 15%

* Household Care – 10%

* Lighting – 2%

Contribution of FMCG Sector

* Economic Contribution

* Approximately 12-13 million retail stores in India, out of which 9 million are FMCG Kirana stores.

* The sector is responsible for the livelihood of almost 13 million people.

* FMCG’s contribution by way of employment salary, taxes and payouts to other sectors comes to an estimated US$ 17 billion.

* Fiscal Contribution

* Almost 30% of the revenue of the sector goes into both direct and indirect taxes. The contribution to the exchequer of approximately US$ 6.5 billion (30% 0f US$ 25 billion).

* Contribution to other Sectors

* Agriculture – FMCG Sector spends on the raw materials i.e. 9% of its total turnover (US$ 2.2 billion)

* Ancillary Industries

* Manufacturing – 9-10% of the total sector’s production is out-sourced to contract manufacturing units taking the total size to US$ 1.7-2 billion.

* Distribution

* ITC Services 1.1 million outlets

* Marico reaches 1.6 million outlets through 900 direct distributors, 100+ super distributors, catering 2500 small stockists and 4600 van markets.

* HUL reaches 50,000 villages through 6,000 stockists, apart from 3.5 lakh direct selling agents and distributes products to 6.5 million retail outlets.

* Packaging Industry

* The packaging industry for the FMCG sector alone is worth US$ 2.9 billion.

* Media Industry

* 40% of the media industry earnings from advertising i.e. US$ 2 billion.

Growth Drivers: Discretionary Spending on the Rise

* Demand – side Drivers

* Consistent GDP Growth

* Increasing Consumer...