AN OVERVIEW ON FMCG ROADMAP TO 2020

Abstract

The Indian FMCG industry at Rs. 1300 billion accounts for 2.2% of the GDP of the country. Given the inherently essential nature of the products, the sector is more or less immune to recessionary pressures. The last decade has seen the sector grow by 11%-15% annually. Robust GDP growth, opening up of rural markets, increased income in rural areas, growing urbanization along with evolving consumer lifestyles and buying behaviors have all been drivers of this growth. Over the next decade, all the above drivers are expected to continue to impact the industry favorably. Based on discussions with industry experts as , it is believed  that the FMCG industry will grow at a base rate of at least 15 % annually to become an Rs.4000 billion industry by 2020. Additionally, if some of the factors play out favorably within an environment of enabling policy and easing of supply constraints, 1% growth may be expected over the next decade, leading to an overall industry size of Rs.6200 billion by 2020. FMCG consumption is becoming more and more broad-based, and has reached an inflexion point where the growth can be expected to take off, following the traditional ‘S-shaped’ curve witnessed across many markets. While on an average, the growth of the industry will be strong, it will not be uniform. Variations are likely across product categories, companies and locations. Based on the research and extensive interviews, it has been identified nine mega trends across consumers, markets, and environment,1. Accelerating Premiumization: 2. Evolving Categories: 3. Goldmine at BOP (bottom-of-the-pyramid): 4. Rapid Globalization: 5. Many India’s:  6. Growing Modern Trade:. 7. Eco-consciousness:  8. Game-changing Technologies: 9. Enabling Policies: