ac neilson report on fmcg

Confidential & Proprietary • Copyright © 2009 The Nielsen Company

Changing Gear – The emerging States for FMCG in India

November 4, 2009

Changing Gear Page 2 November 6, 2009

Confidential & Proprietary. Copyright © 2009 The Nielsen Company

Agenda

ØState Clusters

ØMarket Strategies

ØEmerging Scenario

2009 2015 2020



Agenda

ØState Clusters

ØMarket Strategies

ØEmerging Scenario

2009 2015 2020



Over half of the population still very low on FMCG consumption

Punjab

TN

Maharashtra

AP

Karnataka

Haryana Gujarat

Assam

MP

Orissa

Bihar Rajasthan

UP WB

Per Capita FMCG Consumption (Monthly in Rs )

FMCG Value

Growth ( CAGR 2009 ov

er 2004)

Size of Bubble : Per Capita Monthly Income Number on the bubble indicates per Cap FMCG spend

GRID I GRID II

GRID III



Demographic Differences

49.9% 46.7% 42.8% SEC D/E

2.7% 3.5% 4.4% SEC A1+

Rs.13,549 Rs.11,718 Rs. 29,582 Per Capita Annual Income

MP, Orissa UP, Bihar AP, Mah

Low Low High Income and Affluence

Grid III Grid II Grid I

= Spending Patterns

NCAER; RMS;NRS

Basic Mass Categories

Nutrition, Commodity to Branding and Mass

Luxury and Convenience

Categories

GRID I GRID II GRID III




High High Average Population Growth




= Spending Patterns

1.5% 1.6% 1.2% CAGR (09 over 04)

= Assured Growth

Census GoI 2009 Projections









= Spending Patterns

High High Medium % Rural Population

= Assured Growth


77% 80% 64% % Rural Population

= Vast untapped potential









= Spending Patterns


= Assured Growth


Low High Average Population Density


183 593 277 Density









= Spending Patterns


= Assured Growth


Low High Average Population Density


Low Average Average Accessibility = Return on Investment (Distribution)




FMCG Market Structure

400+ 1300+ 600+ No. of Local Companies


Low High Average Regional Players


= Competition intensity, Level of Enterprise

Nielsen RMS Information





Low High High % Modern Trade and Specialised Channels






3% 5% 6% % Specialised Trade

1% 1% 4% % Modern Trade

= Trade Evolution





Low High High % Modern Trade and Specialised Channels






Average Average High Product Stocking Pattern

= Trade Evolution

18 18 25 No. of Categories (Grocers/Gen)

= Shelf Clutter




In a Nutshell

Grid I Grid II Grid III

• Ability to Spend

• Accessibility

• Competition

• Channel Evolution

http://www.clker.com/clipart-3576.html



















Agenda

ØState Clusters

ØMarket Strategies

ØEmerging Scenario

2009 2015 2020



Opportunities, Challenges and Strategies

Driving Consumption

Examples:

Wheel for the lower pop strata consumers and Surf Excelmatic for the Metros.

Sachets in Rural, Low priced and conveniently packaged products of CP

•Two pronged approach for Urban and Rural markets

•Continuous value additions

“ Focus on Urban markets for Value and Rural for volumes”

Sales Head of an Large HPC company




The Rural Mass

“ Success in Rural areas firstly depends upon offering the right product mix for stores, adapting promotions and ensuring that a tight focus on gotomarket management or innovative ways of reaching rural consumers”

Marketing head of a National company grown big (earlier a regional player)

Examples:

Shakti and Echoupal

•Cost of distribution and

•Conversion of consumers from unbranded to branded




Expansion across States

Examples:

Tea and Salted snacks to cater to regional tastes

Punjab Haryana large pack markets vis a vis UP / Bihar

•Being a Local brand

“ Additionally companies should introduce product variants that account for distinctive regional tastes as well as a wide range of package size and prices to account for purchasing preferences of India’s many consumer segments”

Sales Head of an MNC operating in OTC and Nutrition segments



Above all

Brand Focus

“ We realise that the most powerful counter to price (Regional players) and Private labels will be our brands. Hence strong Brands supported by strong consumer preferences would help us convert consumers and bargain with Large retailers ”

Marketing Head of a Personal care company



Agenda

ØState Clusters

ØMarket Strategies

ØEmerging Scenario

2009 2015 2020



Parameters used to arrive at growth states

Income and Affluence

Rural Opportunity

Cost of Distribution

Trade Development

Human Development

Industry Interviews

2015 2020

Spends on Infrastructure Development

MT Growth in states

Accelerating Rural Development

% Youth population














MP, Orissa

AP, TN, Karnataka, Delhi Maharashtra, Punjab, Haryana, Gujarat, Assam

UP, Rajasthan, WB, Bihar

Growth%

Consumption

2009

Punjab, Haryana, TN Orissa, MP, Rajasthan

AP, UP, Maharashtra,Delhi, Karnataka, Kerala,

WB, Bihar, Gujarat, Assam

Growth%

Consumption

2015



Punjab, Haryana, TN Orissa, MP, Rajasthan

AP, UP, Maharashtra,Delhi, Karnataka, Kerala,

WB, Bihar, Gujarat, Assam

Growth%

Consumption

2015

Growth%

Consumption

2020 Punjab, Haryana, TN, Kerala

Rajasthan

AP, UP, Maharashtra, Delhi, Karnataka

WB, Bihar, Gujarat, MP, Orissa, Assam



Opportunities

Investmen

t

Moderate High

Moderate

High

1. Consumption 2. Upgrade

Rajasthan AP

Maharashtra

UP

MP

Orissa Assam

TN Punjab

Haryana Delhi Karnataka

Kerala

Bihar

1. Consumption 2. Niche products

1.Urban 2.Conversion

1.U & R 2.Conversion















Every yesterday is but a Dream..

Every tomorrow a Vision of Hope..

The Glory of Action is the Bliss of Growth !

Excerpts from Kalidasa

ac neilson report on fmcg

Documents