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FMCG INDIA FMCG industry in India is worth over Rs 1300
billion having tripled its size over the last 10years.
Even in the recession years of 2008 and 2009,
the industry witnessed growth rates of 14% and11% respectively,
which showed that this sectorwas relatively recession proof.
The category of food products accounts for
nearly 45% of the industry size. Total rural FMCG sales in 2008
were Rs 650
billion which is equivalent to Iceland's total GDP.
Nielsen research for the 12-month period ending
November 2009, estimated that the FMCG
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FOOD INDUSTRY IN INDIA
The size of the Industry is estimated at US$ 200billion.
The food processing industry is expected tocontribute upto 50%
of the entire food market by2015.
Food processing is highly fragmented and isdominated by the
unorganized sector whichcontributes 75% of the industry.
Going forward an increasing contribution willstrategically come
from the organized sector.
Within the seven major segments of the food
industry, the expected growth rate of packagedfood is the
highest and could triple in size in the
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Shift towards evolved products
Category evolution is primarily observed among upper
middle and lower middle income classes.
They account for 150 mn people currently and theirsize is
expected to increase to about 500 mn in 2020.
They increasingly want and desire sophisticated
products which suit individual needs. For exampleproducts which
improve their appearance and aregood for health.
Consumers are demanding customized products.Micro-segmentation
for product development and
mass-customization for identifying different productvariants is
already underway.
Better paying jobs and exposure to fashion andbeauty trends
through television and other mediahave resulted in changing tastes
and choices.
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Increasing value at the bottom of thepyramid
Companies can increase value at the bottom of thepyramid by
serving products customized tospecifically meet the requirements of
the large market
BOP consumers are those who earn less than Rs 2
lakh per annum per household. This group currentlyconstitutes
about 900-950 million people in India.
Unlike the middle class segment which is urban, wellserved and
competitive, the BOP markets are largelyrural, poorly served and
uncompetitive.
As a result of rising incomes, the Rural FMCG marketgrowth is
18% and exceeds that of the Urban marketsat 12%
Products such as packaged foods which had no
demand in the rural markets earlier have suddenlystarted
establishing a presence.
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KEY FACTORS OF GROWTH
