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Is the sector regulated? If Yes! Name the regulator and its functions.
Yes FMCG sector is regulated by the Food Safety and Standards Authority of India
(FSSAI) which is an autonomous body established under the Ministry of Health & Family
Welfare, Government of India.
Food related Acts, rules, controlling orders, licensing, registration, circular instructions,
enforcements, exports and imports were dealt with by many sections and several departments
previously. Now all of them have been brought under one umbrella, under one authority called
– FSSAI
FUNCTIONS OF FSSAI
Framing of Regulations to lay down the Standards and guidelines in relation to articles
of food and specifying appropriate system of enforcing various standards thus notified.
Laying down mechanisms and guidelines for accreditation of certification bodies
engaged in certification of food safety management system for food businesses.
Laying down procedure and guidelines for accreditation of laboratories and notification
of the accredited laboratories.
Promote general awareness about food safety and food standards.
To provide scientific advice and technical support to Central Government and State
Governments in the matters of framing the policy and rules in areas which have a direct
or indirect bearing of food safety and nutrition.
Collect and collate data regarding food consumption, incidence and prevalence of
biological risk, contaminants in food, residues of various, contaminants in foods
products, identification of emerging risks and introduction of rapid alert system.
Creating an information network across the country so that the public, consumers,
Panchayats etc receive rapid, reliable and objective information about food safety and
issues of concern.
Provide training programmes for persons who are involved or intend to get involved in
food businesses.
Contribute to the development of international technical standards for food, sanitary and
phyto-sanitary standards.
1. HINDUSTAN UNILEVER:
The company has a wide range of products in the categories like food and beverages, personal
care, home care and water purifying segments. The company has more than 35 prestigious brands
like Dove, Knor, Lifebuoy, Ponds, Lakme, Surf Excel, Elle18, Broke Bond, Quality, Sunlight and
much more. 16% comparable* domestic consumer growth, 12% underlying volume growth.
Hindustan Unilever Limited announced its results for the quarter ending 30th June 2018. During
the quarter, our Comparable* Domestic Consumer Growth was 16%^ with Underlying Volume
growth at 12%. Comparable* EBITDA margin was up 100 bps^ and Net Profit at Rs.1529 crores
grew by 19%.
Net Profit: Rs.5216 crore
Turnover: 4.0 Billion Dollar
Employees: 16000+
Market Share: Rs.127,144 crores
2. COLGATE-PULMOLIVE:
This is an American company that operates worldwide in the consumer product segment.
Company’s most popular and successful product is Colgate toothpaste. Basically, the company
operates in the soap, detergent, and oral hygiene products. The company has a long prestigious
history in the FMCG industry globally. The company has done everything that it takes to be a
great and successful company in the industry.
3. ITC limited:
ITC stands for India Tobacco Company. Apart from the fast-moving consumer items the
company operates in the hospitality, paper, packaging, agri-business, and IT sectors. In the
FMCG segment, the company has a wide range of products. The list includes Foods, Personal
Care, Cigarettes and Cigars, Branded Apparel, Education and Stationery Products, Incense
Sticks and Safety Matches. Some of the most popular product brands are Ashirwad Atta, Bingo
chips, Savlon, Mangaldeep agarbatti, Wills, Fiama, Vivel etc.
Net Profit: Rs. 11891 crores.
Turnover: 7.0 Billion Dollar
Employees: 29000+
Market Share: Rs. 256,759 crores
4. NESTLE
Basically, Nestle is a Swiss company having the headquarter in the Switzerland. Nowadays,
Nestle is one of the largest food company globally. The company has more than 140 years of
experience in the food manufacturing and distribution industry. The company deals with a wide
range of products in different segments. Basically, the milk products and nutrition, beverages,
prepared dishes and cooking aids, chocolates and confectionery, vending and food services are
the major operational segments of the company. EveryDay, Nescafe, KitKat, Maggi, Milkmade,
Nestea, Munch are the most popular brands of the company.
5. Parle argo:
Parle Agro is an Indian company. Basically, the company operates in the food and beverages
industry. the company has several popular brands in the beverages and confectionery segment.
Some of the most popular products are Frooti, Appy Fizz, Hippo, Parle G, Bailley etc. The
company has made the position in the consumer interest through the biscuit and canned fruit
juice items majorly.
7. Marico limited:
Basically, Marico operates in the beauty and wellness industry. Currently, the company has the
glorious presence in 25 countries throughout the world. Marico deals with numerous multiple
brands in the categories of hair care, skin care, edible oils, health foods, male grooming, and
fabric care. Parachute is the flagship brand of Marico. Companys’ other popular and successful
brands are Saffola, Hair & Care, Nihar, Nihar Naturals, Livon, Set Wet and Mediker.
9. Godrej group:
The Godrej Group is an Indian conglomerate. Broadly, the company operates in the chemicals,
consumer goods, agro-based and service based sectors. Also, the company has reputed footprint
in the construction and real estate industry. Company’s’ some of the most successful consumer
brands are Good Night, Ezee, Godrej Nupur, Cinthol, Hit, Godrej Expert, Godrej Aer etc. Apart
from India, the company is the second largest player in Indonesia and now expanding the
footprint in Africa.
10. Amul:
Amul is one of the most reputed and prestigious Indian brands in the food and beverages
consumer goods sector. Additionally, the company has been a pioneer in the fields of the
departments of milk and milk products. Almost every Indian knows the company as The Taste
of India – the most popular tagline of Amul. Under the brand name Amul, the company has a
wide range of consumer food items. This list includes packaged milk, butter, cheese, ice cream,
dahi, ghee, milk powder, chocolates etc.
Net Profit:
Turnover: 2.15 Billion Dollar
Employees: 700+
Market Share: 27000
100000
150000
200000
250000
300000
0
50000
1
Hindustan unilever limited
2
Colgate-Palmolive
4
Nestle
5 6 Parle agro
Marico Ltd.
8
Godrej Group
market share(in Crores)
10
Amul
Strategic Perspective
Having talked about the opportunity here, let us point out the single biggest challenge for any FMCG
brand. Sales and Distribution. The sales and distribution require huge team to grow. Let me put it
this way, to make a 500 Cr. a brand needs to spend north of 100 Cr. in sales and distribution. This is
the massive growth capital required. The time it takes to increase the territory is another thing to be
pointed out. It has to go from region to region making-breaking distributors, looking at sales team
attrition and then working on the sales figure month on month. This is the pulling up the sleeves
exercise and cumbersome. Many brands fail at this after developing a product market fit product.
Another issue is key differentiator yet it can be somehow avoided by branding the products in a
particular way.
Products
List out the range of products offered by companies in this sector.
1. Household products
2. Oral Care
3. Skin Care
4. Hair Care
5. Cosmetics
6. Health related
7. Dairy Products
8. Bakery Products
9. Paper Products
10. Confectionery
11. Stationery Products
12. Foods
13. Tobacco Products
14. Industrial Products
15. Beverages
16. Natural Products
17. Others
Customers
Classify customers of this segment of various categories.
Consumers these days do a ton of research before making purchase decisions. They read product
descriptions, compare prices, and check reviews so you can bet that when they walk into your store,
they already know a whole lot about what you have to offer. The customers of the FMCG sector
includes all the sections of the people as the products has a wide range of variety and the usage of
the products is diversified from the basic need products to the niche products. It spreads to the
interiors of the rural areas to the elite areas of the city.
Future
Identify future trend and major strategic changes in this sector.
Future prospects of the sector include:
Rising income levels and higher disposable income, resulting in increase in purchasing power of
consumers.
Large domestic market with more population of age group between 20 and 30.
India is the largest milk producer in the world, yet the percentage of processed milk is very low
around 15 per cent. The organized liquid milk business is in its early stage and also possesses the
potential of long-term growth. Even there is huge investment opportunities in value-added products
like desserts, puddings etc.
1. Promotions and offers: FMCG companies are trying to influence consumers with intelligent
deals firms like ITC offers combo deals to the consumers. For example, in the case of soaps and
cosmetics; 4 soap cases are offered at the price of 3, selling the range of deodorants for men and
women at a discounted price
2. Research Online Purchase Online: The internet enables consumers to make their own research
on the kind of products or commodities they want to purchase. 1 in 3 FMCG shoppers goes
online 1st and then to the stores. Almost half of the automobile consumers follow Research
Online Purchase Offline (ROPO) method
3. Production Innovation: Indian consumers have become choosy and are less likely to stay loyal
to a brand. Dabur has launched its sugar free variant for Chyawanprash in India. As of March
2017, ITC, which ventured in coffee and chocolates segment under the Fabelle and Sunbean
brands is planning to launch another premium range of items. By doing so, the company is
planning to compete with brands like Nestle and Cadburys