Brand Management

WHAT IS FMCG?

Fast-Moving Consumer Goods (FMCG)

1.       Definition

2.       Types

3.       Profitability 

Definition

Fast-Moving Consumer Goods (FMCG), or Consumer Packaged Goods (CPG), are the products that are sold quickly and at a relatively low cost. High-volume sales, quick inventory turnover, and various products catering to consumer needs characterize the FMCG industry. These goods include essential everyday items such as food and beverages, toiletries, cleaning supplies, and other low-cost household items.

FMCGs have a short shelf life because of high consumer demand (e.g., soft drinks and confections) or because they are perishable (e.g., meat, dairy products, and baked goods).

These goods are purchased frequently, consumed rapidly, priced low, and sold in large quantities. They also have a high turnover when they are on the shelf at the store.

 

Types of Fast-Moving Consumer Goods

FMCGs is divided into several different categories

·         Processed foods: Cheese products, cereals, and boxed pasta

·         Prepared meals: Ready-to-eat meals

·         Beverages: Bottled water, energy drinks, and juices

·         Baked goods: Cookies, croissants, and bagels

·         Fresh foods, frozen foods, and dry goods: Fruits, vegetables, and nuts

·         Medicines: Aspirin, pain relievers, and other medication that can be purchased without a prescription

·         Cleaning products: Baking soda, oven cleaner, and window and glass cleaner

·         Cosmetics and toiletries: Hair care products, concealers, toothpaste, and soap

·         Office supplies: Pens, pencils, and markers

 

Three Types of Consumer Goods?

The three main consumer goods categories are durable goods, nondurable goods, and services. Durable goods, such as furniture or cars, last at least three years. Often, economists will watch durable goods spending to track the economy's health. Nondurable goods are items with a shelf life of under three years and are consumed rapidly. Fast-moving consumer goods fall within this category. Finally, services include intangible services or products, such as haircuts or car washes.

 What Are Some of the Largest Fast-Moving Consumer Goods Companies?

Procter & Gamble, and Coca-Cola, Nestlé are among the world’s largest fast-moving consumer goods companies. Swiss-based Nestlé, for instance, operates over 2,000 brands that cover everything from grocery to frozen foods.

The competition for market share is high within the fast-moving consumer goods industry. In response, companies focus heavily on packaging to attract customers and preserve the product's shelf life and integrity.

The Bottom Line

Fast-moving consumer goods are products that sell quickly and are generally sold at lower prices than slower-moving goods. These goods include food, drinks, toothpaste, and other items that expire or are consumed in less than three years.

 Economic Growth and Employment

The FMCG sector is a primary source of employment, providing job opportunities for millions across the supply chain, including manufacturing, distribution, retail, and marketing. As a labor-intensive sector, FMCG contributes to economic growth by creating direct and indirect employment opportunities, helping to reduce unemployment rates and boost overall productivity.

 Driving Retail and Distribution Growth

The FMCG industry plays a crucial role in the growth of the retail and distribution sectors, generating a steady demand for various products. The high volume and quick turnover of FMCG products encourage retailers and distributors to invest in infrastructure, technology, and workforce development, further supporting economic growth.

 Tax Revenues for Governments

The FMCG sector generates significant government tax revenues through sales, value-added, and corporate taxes. These revenues are essential for funding public services, infrastructure projects, and social programs, contributing to economic development and stability.

 

Distribution Channels

Efficient distribution channels are critical to the success of FMCG companies. The most common distribution channels include: 

·         Supermarkets and hypermarkets

·         Convenience stores

·         Online retailers (Ecommerce)

·         Discount stores

·         Specialty stores

·         Marketing and Advertising Strategies

 

FMCG companies invest heavily in marketing and advertising to create brand awareness and drive sales. Key marketing strategies include:

·         Product packaging and design

·         In-store promotions and displays

·         Digital and social media marketing

·         Influencer partnerships and endorsements

·         Sponsorships and event marketing

 

TOP FMCG COMPANIES AND BRANDS

 Procter & Gamble

Nestlé

Unilever

PepsiCo

The Coca-Cola Company

 

SIZE OF FMCG MARKET

The FMCG market share is expected to increase to USD 310.5 billion from 2021 to 2026, at a CAGR of 2.27%.

This FMCG market research report provides valuable insights on the post COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers FMCG market segmentations by type (food and beverage, personal and beauty care, health and hygiene care, and home care) and geography (APAC, North America, Europe, Middle East and Africa, and South America). The FMCG market report also offers information on several market vendors, including Anheuser Busch InBev SA, Dabur India Ltd., Heineken NV, ITC Ltd., JBS SA, Johnson and Johnson, Kellogg Co., Keurig Dr Pepper Inc., Kimberly Clark Corp., LOreal SA, Mondelez International Inc., Nestle SA, Patanjali Ayurved Ltd., PepsiCo Inc., Tata Sons Pvt. Ltd., The coca cola co., The Kraft Heinz Co., The Procter and Gamble Co., The Wadia Group, and Unilever PLC among others.

FMCG Market: Key Drivers, Trends, and Challenges

The growing preference for e-commerce online distribution is notably driving the FMCG market growth, although factors such as lack of proper infrastructure in emerging economies may impede the market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the FMCG industry. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.

 

Key Driver in FMCG Market

The growing preference for e-commerce online distribution is one of the key drivers supporting the fast-moving consumer goods (FMCG) market growth. Fundamentally, e-commerce platforms allow consumers to collect information and compare various food and beverages, personal care, skincare, cosmetics, and hair care products available on the website. Similarly, FMCG vendors also provide reviews of prior consumers on their products on their official websites. This trend of sharing reviews and feedback on products through e-commerce platforms influences the purchasing behavior of new consumers. Therefore, with the growing trend of online retailing, the sales of FMCG products through online channels are expected to increase globally during the forecast period.

 

FMCG Market Trend

The rising consumption of ready-to-eat food products is one of the key fast-moving consumer goods market trends fueling the market growth. For instance, according to research issued in 2020 by Standard Process Inc., a US-based food supplements firm, processed foods accounted for nearly 70% of the American diet. Moreover, during the pandemic in 2020, there was a massive increase in demand for ready-to-eat food products as most individuals were working from home and countries were under lockdowns. In 2020, one of India's online grocery stores, Blinkit, reported a 17% increase in sales in the ready-to-eat category, a 31% increase in readymade meals and mixes, and a 41% increase in frozen food, indicating a sudden consumer shift from home-cooked food to ready-to-eat food products. Thus, it can be predicted that this shift in consumer behavior will significantly boost the global FMCG market during the forecast period.

 

FMCG Market Challenge

The lack of proper infrastructure in emerging economies is one of the factors hampering the fast-moving consumer goods (FMCG) market growth. Despite having high demand, APAC lacks the proper infrastructure for storing and manufacturing food processing ingredients like preservatives, emulsifiers, enzymes, and others. These ingredients need proper handling and care in terms of maintaining a specific temperature for their storage and preventing them from contamination as it may lead to changes in their chemical compositions. The storage and manufacturing facilities are not only needed at the final site where they are sold but also during the supply chain to retain their original properties. Moreover, the technologies used for producing the ingredients are not as advanced as compared with those used in developed nations such as the US and Canada. This may hinder the fast-moving consumer goods (FMCG) market growth during the forecast period.

This fast-moving consumer goods market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2022-2026.

Parent Market Analysis

Technavio categorizes the global fast-moving consumer goods (FMCG) market as a part of the global packaged foods and meats market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the fast-moving consumer goods market during the forecast period.

Who are the Major FMCG Market Vendors?

The report analyzes the market's competitive landscape and offers information on several market vendors, including:

·         Anheuser Busch InBev SA

·         Dabur India Ltd.

·         Heineken NV

·         ITC Ltd.

·         JBS SA

·         Johnson and Johnson

·         Kellogg Co.

·         Keurig Dr Pepper Inc.

·         Kimberly Clark Corp.

·         LOreal SA

·         Mondelez International Inc.

·         Nestle SA

·         Patanjali Ayurved Ltd.

·         PepsiCo Inc.

·         Tata Sons Pvt. Ltd.

·         The coca cola co.

·         The Kraft Heinz Co.

·         The Procter and Gamble Co.

·         The Wadia Group

·         Unilever PLC