Fast-Moving Consumer Goods (FMCG) sector is the fourth largest industry of the Indian economy. Characterized by high turnover, these products are produced, distributed, marketed, and consumed within a short span of time. Detergents, toiletries, tooth cleaning products, cosmetics are the top FMCG products that dominate the market. The FMCG sector in India also includes pharmaceuticals, consumer electronics, soft drinks packaged food products and chocolates. Since the sector encompasses a diverse range of products, different companies dominate the market in various sub-sectors. Here is a quick overview of key players in the industry.
Bajaj Consumer Care Ltd
Bajaj Consumer Care Ltd (BCCL), part of the Bajaj Group of Companies, is a manufacturer and marketer of hygiene, hair and skin care products. The company’s product portfolio comprises almond hair oil, sanitizer, amla hair oil, jasmine hair oil, anti-marks skin cream and face wash. BCCL markets products under Almond Drops, Brahmi Amla, Natyv Soul, Bajaj 100% Pure and Nomarks brand names. The company sells its products through retail outlets and operates manufacturing facilities in Himachal Pradesh, Gujarat, Assam and Uttarakhand states of India. The headquarter is in Mumbai, Maharashtra, India.
Britannia Industries
Britannia Industries Ltd (BIL) is a manufacturer and marketer of bakery and dairy products. The company’s product portfolio includes bakery products such as biscuits, bread, croissants, cakes, wafers, and rusk, and dairy products comprising milk, butter, cheese, milk-related readymade beverages, and yoghurt. BIL offers its products under various brands, such as Good Day, Treat, 50-50, Tiger, Crackers, Bourbon, Milk Bikis, MarieGold, and NutriChoice. It sells and markets products through distributors, direct sales channels, vendors, and contract packers. The company supplies its products across Asia-Pacific, the Middle East, Europe, Africa and the Americas. It owns and operates manufacturing plants across India. BIL is headquartered in Bengaluru, Karnataka, India.
Emami Ltd
Emami Ltd (Emami) is a manufacturer, marketer, and seller of beauty and personal care products. The company’s product portfolio comprises skin creams, hair care, talcum powder, soaps and lotions, and Ayurvedic health-care products. It markets products under Navratna, Mentho Plus, Zandu Healthcare, Zandu Balm, Zandu Sonachandi, BoroPlus, Diamond Shine, Kesh King, Fair and Handsome, 7 Oils in One, Vasocare, Fast Relief, HE and Kesari Jivan brand names. The company operates manufacturing facilities in India. Emami sells products in India and international markets, including Gulf and Middle East, SEA, SAARC, CIS, and Africa. Emami is headquartered in Kolkata, West Bengal, India.
ITC
ITC Ltd (ITC) operates a diversified conglomerate business. The company is involved in the business of fast-moving consumer goods, hotels, paperboards and specialty papers, packaging, agri-business, and information technology. The company’s product portfolio includes cigarettes and leaf tobacco, foods, personal care, stationery goods, safety matches, incense sticks (agarbattis), paperboards and packaging materials, specialty papers, and agri commodities. Its major brands include Aashirvaad, Sunfeast, Yippee! Bingo, Wills Lifestyle, John Players, Gold Flake, Classmate, Essenza Di Wills, Fiama, Vivel, Mangaldeep, Aim, and i Kno. The company operates across North America, Europe, and South-East Asian countries. ITC is headquartered in Kolkata, West Bengal, India.
Godrej Consumer Products Ltd
Godrej Consumer Products Ltd (GCPL) is a manufacturer, distributor, and marketer of fast-moving consumer goods. Its product portfolio includes household and personal care products, including soaps, toiletries, cosmetics, hair care, air care, health and hygiene, household insecticides, and fabric care products. The company offers household insecticides products in the aerosol, electric and burning categories. GCPL markets these products under several brands, including Cinthol, Saniter, Godrej No. 1, Ezee, Stella, Good Knight, TCB Naturals, Darling, Bblunt, HIT, Inecto and Nupur. The company operates manufacturing facilities in India, Indonesia, Latin America, the US and Africa. GCPL is headquartered in Mumbai, Maharashtra, India.
Industry Performance
FMCG sector has been expanding at a healthy rate over the years as a result of rising disposable income, a rising youth population, and rising brand awareness among consumers. With household and personal care accounting for 50% of FMCG sales in India, the industry is an important contributor to India’s GDP. FY2022 witnessed volume growth drop sharply due to the inflation impact on rural consumption, and profitability bearing the brunt of spiralling commodity prices, most FMCG majors weathered the storm and managed to report growth in sales and profits.
The performances of key companies in the industry give indications that the industry has recovered from the pandemic and are making profits. The reported margin of the industry by analyzing the key players was around 20.9% by taking into consideration the last 3 years’ data. Details are as follows.
| Companies | Net Margin | EBITDA/Sales |
| Bajaj Consumer Care Ltd | 19.00% | 23.60% |
| Britannia Industries | 11.70% | 16.90% |
| Emami Ltd | 28.50% | 34.00% |
| ITC | 24.20% | 34.50% |
| Godrej Consumer Products Ltd | 21.10% | 25.50% |
| Industry Margins | 20.90% | 26.90% |
Industry Trends
FMCG industry in India was able to traverse the last two years unscathed due to the demand for staples, daily use items and health and hygiene categories shot up during COVID, even though the discretionary goods and beauty and personal care products took a back seat. Fast forward to 2023, the FMCG industry faces another problem – persistent inflation and shrinking demand in the short to medium term. While FMCG companies must deal with the immediate challenges, they must also be mindful of the long-term trends shaping the industry in a post-pandemic world.
On one side, consumers have formed new habits and preferences; on the other, the competition is only getting fiercer in the consumer products industry, with new players emerging and adopting aggressive strategies to destabilize the incumbents. With these factors in mind, the industry is still showing huge growth potential, some of the growth divers that is propelling the industry are:
- Value and convenience have emerged as the key drivers.
- Increase in rural consumption, increased demand for branded products.
- The rise in D2C brands – Products/ services backed with innovation and direct customer relationships are gaining share Digital commerce and advertising are mainstream now, even in the business to business (B2B) space.
- Industry structure gets shaped by new and existing players – The industry is going through a structural change with the entry of the new type of players and consolidation by the incumbent players.
- Sustainability in the new trend and for a sustainable future – Multiple FMCG Companies have started serious sustainability plans such as: net zero emissions for operations, plastic-neutral, etc.
The industry is attracting major investments as follows.
- 100% FDI is allowed in food processing and single-brand retail and 51% in multi-brand retail.
- The sector recorded an FDI of US$20.11 billion between April 2000- March 2022.
- In June 2022, PepsiCo India announced its expansion plans for its largest greenfield foods manufacturing plant that produces the popular Lay’s potato chips in Kosi Kalan, Mathura in Uttar Pradesh with an investment of Rs. 186 crore (US$ 23.84 million)
Some of the major initiatives taken by the government to promote the industry in India are as follows:
As per the Union Budget 2022-23:
- 1,725 crore (US$222.19 million) has been allocated to the Department of Consumer Affairs.
- 215,960 crore (US$27.82 billion) has been allocated to the Department of Food and Public Distribution.
- In FY 2021-22, the government approved Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) with an outlay of Rs.10,900 crore (US$1.4 billion) to help Indian brands of food products in the international markets.
- In FY 2021-22, the government approved Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) with an outlay of Rs.10,900 crore (US$1.4 billion) to help Indian brands of food products in the international markets.
- The government has initiated Self Employment and Talent Utilization (SETU) scheme to boost young entrepreneurs. The government has invested US$163.73 million in this scheme.
Through analyzing the market analysis of the contributing companies for the last three years, we can ascertain that the sector witnessed a compounded annual growth rate (CAGR) of 4.8% at the end of 2022. Details are as below.
| Companies | CAGR |
| Bajaj Consumer Care Ltd | 1.97% |
| Britannia Industries | 9.20% |
| Emami Ltd | 4.60% |
| ITC | 1.70% |
| Godrej Consumer Products Ltd | 6.40% |
| Industry CAGR | 4.80% |
The FMCG industry fared well in India in the recent years with consumer food services, household and personal care segments experiencing a tremendous growth with the increasing disposable income and the growing economy. Most of the consumer goods products are moving to online platforms and most of the major supermarkets have their own online ordering portals and mobile apps making it convenient for the consumers to order online with just a click of a button during their busy schedules. An increasing demand from the rural and tire-2 population can be witnessed given the increasing annual income and the awareness for the products and the increasing digitization making them one of the major influencers of the FMCG sector.
Given these facts, the industry is likely to double the reported growth rate and is expected to exhibit CAGR of 9.6% in the next five years from 2023 to 2027.
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