FAST MOVING CONSUMER GOODS
Fast Moving Consumer Goods (FMCG) Also known as the Consumer Packaged Goods or CPG Industry, this multi-million dollar sector is made up of a huge range of famous brand names – the kind that we use every single day. These fast moving consumer goods are the essential items we purchase when we go shopping and use in our everyday lives. They're the household items you pick up when you're buying groceries or visit your local chemist or pharmacy. FMCG goods are referred to as 'fast moving', quite simply, because they're the quickest items to leave the supermarket shelves. They also tend to be the high volume, low cost items. FMCG products are those that get replaced within a year. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and chocolate bars. A subset of FMCGs is Fast Moving Consumer Electronics which include innovative electronic products such as mobile phones, MP3 players, digital cameras, GPS Systems and Laptops. These are replaced more frequently than other electronic products. White goods in FMCG refer to household electronic items such as Refrigerators, T.Vs, Music Systems, etc. The top FMCG companies are characterised by their ability to produce the items that are in highest demand by consumers and, at the same time, develop loyalty and trust towards their brands. Though the profit margin made on FMCG products is relatively small, more so for retailers than the producers/suppliers, they are generally sold in large quantities. FMCG is probably the most classic case of low margin/high volume business. In 2005, the Rs. 48,000-crore FMCG segment was one of the fast growing industries in India. According to the AC Nielsen India study, the industry grew 5.3% in value between 2004 and 2005.
FMCG companies are behind the biggest brands in the world. FMCG is all about names, the products which everyone recognises from trips to the supermarket or from ads on television. The brands that make up this sector are the high profile ones, the ones everybody knows and loves. Think Coca-Cola, Dettol and Dove. This is an industry that puts you in living rooms, kitchens and bathrooms across the globe.
The FMCG industry changes fast and is constantly evolving. It's fair to say there is never a dull moment in FMCG. From the pace at which goods leave the shelves to the rate of product innovation and career progression, things move quickly. And it doesn't end there. The brands themselves are changing just as quickly. 40% of brands on the top 100 list twenty years ago have already been replaced by new names today.
FMCG firms thrive on employee and customer retention. Employee investment is a big part of the ethos of the FMCG world. Perhaps it's because we understand the importance of loyalty. Customer loyalty can make or break a brand. Take Twinings, for example – a century after they entered the top 100 brand list, they are still there and going strong. So it makes sense for FMCG companies to encourage the loyalty of their employees too.
FMCG companies can beat the recession.This is an industry that has proved itself very resilient to recession – with the majority of companies in the sector weathering the financial storm in a way that very few others have managed. Why? Well, consumers will always need to buy the products created by FMCG companies. They may not buy big items like refrigerators or cars in a recession, but floors still need to be cleaned, clothes need to be laundered and aches and pains still need to be soothed.
The FMCG industry thinks bigger – and better. This is an industry that offers things on a whole new scale. Where else could you find yourself handling $150 million accounts? Working in FMCG gives you the chance to be a part of some global success stories and influence the way consumers shop for products. FMCG firms are always thinking of the next great discovery or innovation – always developing and ever-changing to meet consumer's needs.
FMCG has a history of delivering what consumers want. Some FMCG companies' roots are over two centuries old – driving the industry to a value of $570.1 billion. In short, to quote Sam Walton, founder of Wal-Mart:"High expectations are the key to everything"
Some of the leading FMCG companies in the world include:
4) H. J. Heinz
11) Procter & Gamble
13) Sara Lee
14) SC Johnson