Top 10 FMCG companies in the world

The FMCG sector, also known as CPG, has some of the most gigantic companies, products of which people world over use daily. The list has leading brands like P&G, Unilever, Nestle above top global beverage brands like Coca Cola, Pepsi, AB Inbev. The list is completed with companies like Philip Morris, Lóreal, Mondelez & JBS.

Here is the list of the top 10 FMCG companies in World in 2015.

10. Philip Morris International

Known for its best-selling cigarette brand Marlboro, Philip Morris International is an American global cigarette and Tobacco Company which sells tobacco products in over 200 countries. Marlboro is the international best-selling cigarette brand. It has 6 brands among the top 15 cigarette brands. In 2014 it held 15.6% of international market for cigarette outside U.S. Considering that only 6 tobacco companies control over 81% of the cigarette market and the increasing number of people are getting addicted to cigarette this company has great prospects for growth and increasing revenues. The only hurdle which like most of the tobacco companies it has faced is regulatory for ex: in April 2014 it closed down its factory in Australia due to highly demanding fire-safety measures

Philip Morris International became an individual company as a spin-off from Altria group in 2008. Revenues from U.S operation are not part of Philip Morris International as its brands there are owned by Altria group of which it previously was a part of. The reason for spin off is stated as Altria wanted Philip Morris International to focus on emerging markets like India and China where it has huge potential for growth. Altria group was known as Philip Morris companies till 2003. Interestingly since 1988 it owned Kraft foods which were previously associated with Mondelez International ranked 8 in our list, whose stake it sold in 2007. History of Philip Morris can be traced back to a small cigarette and tobacco shop owned by Philip Morris. Since then it expanded in European and American Markets through series of mergers and acquisition and establishing manufacturing facilities across the world. Currently it is headquartered in New York City. The company has around In 2014 it recorded revenue of around $23 billion and profit of around $3.3 billion.

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9. JBS S.A

JBS S.A is the only non-European and non-American company in the list of top 10. Headquartered in Annapolis, Brazil the company is named after its founder Jose Batista Sobrinho who was a rancher in Annapolis and founded the company in 1953. This company is the largest producer of factory processed meat which includes beef, pork etc. Till 1980s it was a local company with manufacturing plants in Brazil only. Since then it has followed a global export growth model wherein major beef producing countries

have its plants from where it exports beef to the whole world. It has expanded its size following a series of mergers and acquisitions which helped them to enter allied market like Pork and consolidate existing markets. In 2007 its acquisition of U.S based Swift & Company made it a major player in American market and in 2009 its acquisition of Gurpo Bertin which was one of the market leader in Brazil made it the biggest player in the world.

Currently it has beef and pork processing plants in major meat consuming market Brazil, Argentina, U.S.A and Australia and through this plants in exports to 110 meat markets 2014 it recorded revenues of $45 billion and profit of about 0.895 billion. Among the top 10 FMCG companies list JBS group has the least per dollar profit which indicates that currently it is in expanding mode with recent acquisition of Tyson Foods' subsidies in 2014. Also it holds significant stake in Pilgrim Pride in U.S, making its presence felt in poultry business in U.S and it also had made bid for acquiring hillshire brands in U.S Once it starts consolidating its operations and synergies from various acquisition starts reflecting its profits are bound to rise.

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8. Mondelez international

Famous for its Cadbury brand named after one of its founder John Cadbury ; Mondelez international is an American Multinational conglomerate which operates mainly in food and confectionary business. The color of Cadbury has been patented by the company. Mondelez. It is headquartered in Deerfield, Illionois in Chicago. In 2012 it changed its name from Kraft foods to Mondelez International. The name was proposed by Kraft Foods employees which is combination of two words world and delicious in latin language. Just like its name the company aims to serve the taste buds of humanity world-wide through its delicious milk products. In 2012 a spin-off happened in which the grocery business was named as Kraft foods and the other food and confectionary business was renamed as Mondelez International. It recorded net profit $ 3.8 billion in 2014. In 2014 it announced its acquisition with Douwe Egberts a dutch tea manufacturing company increasing its portfolios of brands

Mondelez International's history can be traced back to two companies National Dairy Products and Kraft foods. National Dairy Products Corporation was formed in 1923 by Thomas H. McInnerney which competed in dairy market of America. Its current headquarter is the location of an ice-cream company named Hydrox Corporation operated by Thomas McInnerney. Kraft foods was formed in 1909 by James Kraft and his brothers and they specialized in making pasteurized processed cheese. The U.S dairy market saw consolidation and National Dairy merged with Kraft and this followed a series of acquisition of various companies like Dart, Philip Morris etc. Its most famous brand Cadbury was added to its portfolio in 2010 when Kraft acquired Cadbury group for 19.5 billion. The takeover was initially rejected

in 2009 by Cadbury due to lower-valuation and resistance from government but finally succeeded making kraft and big player in food and confectionery market.

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7. L’Oreal Group

L’Oreal is a world leader in beauty and cosmetic segment, Headquartered in Paris. It is present in over 130 countries and owns over 32 international brands. It aims to provide unisex beauty solutions and is active in research and innovations in the same field. Unique thing about this group in the list is the number of patents it has in the fields like nano-technology, dermatology, tissue re-engineering etc. To make innovation possible it has 6 research centers world-wide including a research center in India. Its origins are traced in 1909 where a French chemist Eugene Schuller developed a hair dyeing formula and based his company on research and innovation which L'Oreal still follows. Nestle S.A ranked 2nd in the list has 24% stake in the group which it continues to hold. L'Oreal group has also diversified into other sectors like Pharmaceuticals by purchasing Synthelabo in 1973 but later was acquired by Sanofi. In coming years it plans to compete based on innovation as well as environment friendly solutions for sustainable growth.

L’oreal biggest strength has been to connect the new brands acquired or develop with the group’s identity creating Omni channel retail strategy which has been the strategies of other players too in the sector. In 2014 it recorded annual sales of $26 billion and $3.3 billion of profit. It pioneered in creating travel retail as a separate distribution channel wherein L'Oreal owned products were customized after identifying travel profiles at airports across the globe. L'Oreal currently owns over 500 brands and has significant presence in all the sub-segments of beauty sector like hair colour, skin care, cleansers, makeup, fragrances, permanents, hair styling etc. It has done significant acquisitions in its 100 years of history the recent being acquisition of The body Shop which increased its presence in the store ownership segment in 2006 and Chinese beauty brand Magic Holdings in 2014.

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6. Anheuser-Busch InBev

Owner of the king of beers BudWiser this company is the world’s largest brewer owning 25% of market share. AB InBev is a company formed through series of mergers. 3 companies InterBrew, Ambev and Anheuser Busch currently merged together form AB InBev. InterBrew is a result of merger of two biggest Belgian brewers and Ambev is a result of merger of two biggest Brazilian brewers. Interbrew and AmBev

merged in 2004 to form InBev which in 2008 merged with American brewer Anheuser Busch to form AB-InBev. In our list this company is with the oldest history starting from 1336 where Den Hoorn an belgian brewer company was established which later became Interbrew.

The company has also grown through acquisition, the latest being that of Grupo Mondelo owner of Corona brand. It is the least diversified company in the list with beer being source of more than 95% of its revenues. This limits its scope but Its lack of presence in markets like Africa also indicates potential opportunity to growth.Currently it has over 200 beer brands in its portfolio and 16 brands are making more than 1 billion in revenues. It has brewing operations present in 25 countries and sells its product in over 100 countries. It recorded revenues of $46 billion in 2014 with net profit of $14 billion which is highest among the top 6 companies The Company follows a focused brand strategy with major investment on select brands. It classifies its brands as global, international and local and has different strategies for each segement. In 2013 it also opened a Bud Analytics Lab and plans to use analytics extensively in its further business strategies. It is the only company in the list to claim to be using analytics for operations, social media and large scale data science.

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5. Coco-Cola

In 1985 whole of the world rejoiced when Coco-Cola decided to bring back its old flavored Coke and recall New Coke. Such is the effect this company has on the world. Famous for its innovative marketing campaign this brand was ranked 3rd by Forbes in its global brand list.It is headquartered in Atlanta, Georgia. Coca COla company was formed by Asa Griggs Candler in 1892 and since then it follows the franchise model in which it sells the concentrated syrup of coca cola to various bottlers who manage the distribution across the world. Its formula originated from a medical syrup developed to give instant energy and refreshment and is kept in a secret vault at its headquartered and is believed to be known to only few employees of the company

It has increased its portfolio through series of acquisitions like minute maid and Indian brand Thums-up.It has 17 billion dollar plus brands and has 2014 revenues of around $49 billion with net profit of around $7 billion. It had also tried to diversify into unrelated business like purchase of columbia pictures in 80s but later it sold it to Sony to focus on its core products. It has built the brand over the years through emotional connect of Coke and claims to sell happiness rather than just a soft drink. Unlike its most famous rival Pepsi Coco-cola is less diversified in other food and snacks businesses. Its focused strategy has resulted into it being the largest soft-drink seller in the world. Coco cola has received a lot of criticism for health related effects of its flagship brand. Following the recent trend in software

industry regarding the health concerns, Coco cola is strongly promoting calorie free products like Coke Zero, Diet coke etc.

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4. PepsiCo

The name might mislead you in believing that PepsiCo is a company that sells Pepsi and some other aerated drinks. But PepsiCo in its present form has a global portfolio of brands.PepsiCo has origins somewhat similar to Coca-Cola where the Pepsi formula changed hands and Charles Guth in 1931 finally formed Pepsi Cola company. It expanded through acquisitions of beverage like Mountain Dew pre- 60s and finally 1966 by merger of Pepsi and Fritolay PepsiCo in its present form was created. PepsiCo aims to be largest food and Beverages Company. Also the aerated drinks business which has made its name famous accounts for less than 50 % of its total revenues. It is largest food and Beverages Company in United States and ranked 2nd after Nestle in the world. Its major growth is attributed to series of acquisition of brands like Geotorade, Tropicana and Quarter Oats.

Its CEO is Indira Nooyi is of Indian origins and has been successfully leading the company since 2006. Its acquisition spree in food business has given itself access to markets like Russia through companies like William-Bann Foods. Also to compete with Coco-cola it has acquired the two largest bottling companies in North America and established themselves as subsidaries of PepsiCo. This diversification has helped PepsiCo survived downturns and given PepSiCo resources to expand more rapidly. In 2014 it recorded $66.415 billion revenue and close to $6.8 billion of profits closing in with diversified company like Unilever even though its portfolio is limited to food and beverages segment. It is present in over 200 countries. PepsiCo also had a significant stake in famous brands like Taco Bell, Pizza Hut, KFC etc but in 1997 it divested its stake with the main purpose of focusing on snacks and beverages businesses.

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3. Unilever

Co-headquartered in Rosterdam and London this British Dutch company is one of the largest FMCG companies. It is famous for its products like Lipton, Lux, Knorr, Dove, Ponds etc. Founded in 1929 with merger of Lever brothers and Margarine Unie this company mainly deals in food, beverages, cleaning agents and personal care products. Unilever has over 400 brands operational and claims to touch lives of over 2 billion people every day through its products. Unilever has its business divided into 4 major

segment of which personal care segment is the highest revenue generating business. Till 1997 Unilever had a huge present in chemical manufacturing but then it divested its chemical business as ICI and focus mainly on consumer segment.

It its 100 years of history Unilever made series of acquisition like Lipton, Brooke Bond, Ben and Jerry's etc. In 2014 Unilever recorded over $68.5 billion in revenue and $7.8 billion in profits .Although it lacks behind in terms of revenue compared to the top 2, it aims for a sustainable business models which is visible by its activities around the globe. By 2020 it has promised to reduce the carbon footprints produced by its manufacturing units to half and improve sustainability in terms of agriculture sourcing benefiting lives of thousands of its suppliers. Having vast operations across the world owning over 400 brands and subsidiaries in almost 100 countries this company is clearly poised to give a tough fight to top 2 in terms of revenues, profits as well as brand equity. Unilever has followed a subsidiary model partnering with local intelligence to market their products. Hindustan UniLever is their notable subsidy in which it holds 67.25% of stake..

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2. Nestle S.A

Headquartered in Switzerland and present in over 194 countries, this company is famous for its brands like Nescafe, Maggie, KitKat etc. Even though it operates mainly in its food and confectionary business leaving the personal care segment empty it is the biggest FMCG Company in terms of revenues. Its tag line “Good food good life” indicates how it has approached its business. Nestle was considered to be the most profitable company by Fortune Magazine in the year 2011. Nestle in its present form has its origins in 1866 where two separate entities for baby food and milk chocolates were founded. Later series of mergers added more products to its portfolio. The two world wars had a huge role to play in Nestlé’s innovations in milk segment like milk powder, Nescafe etc. and it cashed heavily in terms of war contracts.

Nestle is owner of flagship brand Maggie which it acquired in 1947 which has helped to increase its revenues significantly in recent years. Nestlé has 8,000 brands with a wide range of products across a number of markets, including coffee, bottled water, milkshakes and other beverages, breakfast cereals, infant foods, performance and healthcare nutrition, seasonings, soups and sauces, frozen and refrigerated foods, and pet food.In 2014 it recorded revenues of $91 billion and profit of around $10 billion. Nestle’s lack of diversification has been reflected in its results which see changes as per the growth of food segment. Interestingly Nestle has a significant stake in L’Oréal group which itself a mammoth in beauty segment. Being away from the segment an acquisition of L’Oréal can make Nestle much larger in compare to its competitors in FMCG segment and can also help Nestle diversify in Cosmetics segment.

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1. Proctor and Gamble

Topping the list with Gillette being its most powerful global brand this company has over 150 years of History. Founded in 1837 by William Procter and James Gamble this company is older than many countries. It has survived the industrial age, 2 world wars and has successfully entered the digital age constantly reinventing itself. Based out of Ohio, USA P&G is present in many sectors like skin-care, health care, food etc. It owned more than 300 brands before the start of 2014 but now has decided to focus on its major brands and is dropping many brands.

In 2014 it had total revenue of $83 billion and an increased net profit of $11.6 billion for the fiscal year of 2014. It has presence over 180 countries which fairly explains how big mammoth this company is. Its top 50 brands represents 90% of its business and this fairly explains its renewed plans to focus on them shifting from a more complex company to a simpler one. The company is a mix of old consistent brands like Tide and newly acquired brands like Gillette. Its diversification protects itself from a sub-sector slowdown and it has been one of the main reason for its sustainability in long-term.

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To arrive at this list following methodology was used

Step 1: Top 15 companies were shortlisted based on their revenues

Step 2: 3 parameters Revenues, Profits and Number of markets present in were scaled using Min-Max Normalization

Step 3: Clusters were formed based on these 3 parameters such that companies similar on these three parameters were clustered together. This resulted into 4 clusters of top 3,1,5,1 companies. To cluster these companies they were visualized using graphs

Step 4: Based on the rank of their most powerful brand inter-cluster ranking was done.

Data Sources:

1. Companies annual reports to know their revenues and profits and websites to know number of markets present in

2. Forbes top brand list for inter-cluster ranking