Growing awareness, easier access and changing lifestyles are the key growth drivers for the consumer market, fast moving consumer goods (FMCG) experts said.
Speaking at the CII FMCG Summit, Bharat Puri Chairman, CII National Committee on FMCG and Managing Director, Pidilite Industries highlighted that the India consumption story is a big one and India is already one of the largest markets.
"At the heart of all of this is the consumer. The real winners are those who will benefit from increased consumption with changing lifesytle," Puri said.
On the other hand, Nitin Paranjpe, President, Foods and Refreshment Division, Unilever stated in his keynote address that the world today is defined by extreme polarization, anti-globalization with protectionism raising its head, changing notions of value and increasing impatience among the new generation.
The environment is under stress with 16 of the 17 hottest years occurring since 2001.
In this context, only brands that matter will be those that stand up for an issue — societal or environmental — and are defined by authenticity and consistency.
“Business came into existence because of society’s need. The purpose of business is not wealth maximization, it is fulfilling consumers’ needs and that is the principal driver of growth,” Paranjpe said.
Concurring with Paranjpe, Sudhir Sitapati, Executive Director-foods, and refreshment at Hindustan Unilever Ltd said FMCG companies will have to work with the government to get a framework in place that allows plastic credits across the country.
The conversation around plastic recycling picked up steam after India banned the use of some forms of plastic in 20 states.The move has caused challenges to the fast-moving consumer goods sector.
There are three main segments in the sector – food and beverages which accounts for 19 percent of the sector, healthcare, which accounts for 31 percent, and household and personal care, which accounts for the remaining 50 percent.
The FMCG sector has grown from $31.6 billion in 2011 to $52.75 billion in 2017-18.
The sector is further expected to grow at a Compound Annual Growth Rate (CAGR) of 27.86 percent to reach $103.7 billion by 2020.
The sector witnessed the growth of 16.5 percent in value terms between June–September 2018; supported by moderate inflation, increase in private consumption and rural income.
It is forecasted to grow at 12-13 percent between September– December 2018.
Experts believe that FMCG’s urban segment is expected to have a steady revenue growth at 8 percent in FY19 and the rural segment is forecasted to contribute 15-16 percent of total income in FY19.
Demand for quality goods and services have been going up on rural areas of India, on the back of improved distribution channels of manufacturing and FMCG companies.
The urban segment accounts for a revenue share of 55 percent in the overall revenues recorded by FMCG sector in India.
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