ac neilson report on fmcg
TRANSCRIPT
Confidential & Proprietary • Copyright © 2009 The Nielsen Company
Changing Gear – The emerging States for FMCG in India
November 4, 2009
Page 2
Changing Gear Page 2 November 6, 2009
Confidential & Proprietary. Copyright © 2009 The Nielsen Company
Agenda
ØState Clusters
ØMarket Strategies
ØEmerging Scenario
2009 2015 2020
Page 3
Changing Gear Page 3 November 6, 2009
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Agenda
ØState Clusters
ØMarket Strategies
ØEmerging Scenario
2009 2015 2020
Page 4
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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
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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
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Demographic Differences
High High Average Population Growth
MP, Orissa UP, Bihar AP, Mah
Low Low High Income and Affluence
Grid III Grid II Grid I
= Spending Patterns
1.5% 1.6% 1.2% CAGR (09 over 04)
= Assured Growth
Census GoI 2009 Projections
GRID I GRID II GRID III
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Demographic Differences
High High Average Population Growth
MP, Orissa UP, Bihar AP, Mah
Low Low High Income and Affluence
Grid III Grid II Grid I
= Spending Patterns
High High Medium % Rural Population
= Assured Growth
Census GoI 2009 Projections
77% 80% 64% % Rural Population
= Vast untapped potential
GRID I GRID II GRID III
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Changing Gear Page 8 November 6, 2009
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Demographic Differences
High High Average Population Growth
MP, Orissa UP, Bihar AP, Mah
Low Low High Income and Affluence
Grid III Grid II Grid I
= Spending Patterns
High High Medium % Rural Population
= Assured Growth
Census GoI 2009 Projections
Low High Average Population Density
= Vast untapped potential
183 593 277 Density
GRID I GRID II GRID III
Page 9
Changing Gear Page 9 November 6, 2009
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Demographic Differences
High High Average Population Growth
MP, Orissa UP, Bihar AP, Mah
Low Low High Income and Affluence
Grid III Grid II Grid I
= Spending Patterns
High High Medium % Rural Population
= Assured Growth
Census GoI 2009 Projections
Low High Average Population Density
= Vast untapped potential
Low Average Average Accessibility = Return on Investment (Distribution)
GRID I GRID II GRID III
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FMCG Market Structure
400+ 1300+ 600+ No. of Local Companies
MP, Orissa UP, Bihar AP, Mah
Low High Average Regional Players
Grid III Grid II Grid I
= Competition intensity, Level of Enterprise
Nielsen RMS Information
GRID I GRID II GRID III
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FMCG Market Structure
Low High High % Modern Trade and Specialised Channels
MP, Orissa UP, Bihar AP, Mah
Low High Average Regional Players
Grid III Grid II Grid I
= Competition intensity, Level of Enterprise
Nielsen RMS Information
3% 5% 6% % Specialised Trade
1% 1% 4% % Modern Trade
= Trade Evolution
GRID I GRID II GRID III
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FMCG Market Structure
Low High High % Modern Trade and Specialised Channels
MP, Orissa UP, Bihar AP, Mah
Low High Average Regional Players
Grid III Grid II Grid I
= Competition intensity, Level of Enterprise
Nielsen RMS Information
Average Average High Product Stocking Pattern
= Trade Evolution
18 18 25 No. of Categories (Grocers/Gen)
= Shelf Clutter
GRID I GRID II GRID III
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In a Nutshell
Grid I Grid II Grid III
• Ability to Spend
• Accessibility
• Competition
• Channel Evolution
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Agenda
ØState Clusters
ØMarket Strategies
ØEmerging Scenario
2009 2015 2020
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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
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Opportunities, Challenges and Strategies
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
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Opportunities, Challenges and Strategies
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
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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
Page 19
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Agenda
ØState Clusters
ØMarket Strategies
ØEmerging Scenario
2009 2015 2020
Page 20
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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
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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
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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
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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
Page 24
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Every yesterday is but a Dream..
Every tomorrow a Vision of Hope..
The Glory of Action is the Bliss of Growth !
Excerpts from Kalidasa
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