Consumer Packaged Goods

Consumer Packaged Goods (CPG) are often referred to as Fast Moving Consumer Goods in Asia. The industry was valued at $37 billion in 2013. The sector is expected to grow 14.7% annually to reach $110.4 billion by 2020. This sector employs 3 million workers. Retail sales are delivered through a network of 8.8 million stores; most of these are single-location family-owned stores.

India’s CPG sector is divided into the following categories:

• Food & beverage – 41%
• Personal care – 22%
• Household care – 9%
• Other – 28%

The industry is driven by the growth of the Indian population, particularly among the middle class and in rural areas. This presents an opportunity for foreign CPG companies to convert new consumers to their branded products. Another reason for this industry’s growth is consumers’ upgrading to premium or better differentiated products in the matured product categories. Due to widespread presence of American media, the population is increasingly curious about the outside world while still being rooted in Indian culture and traditions. This results in increased demand for western-style convenience goods.

In 2014, Nielsen, the global research company, ranked Indian consumers at the top of the Consumer Confidence Index. When buying products, households prefer well-known brands while considering aspects such as price and value for their money. Entrants to the Indian CPG industry are often more successful if they can offer a range of tiered brands with appropriate price and value considerations.

Top domestic CPG companies and their popular products include:

• Hindustan Unilever Ltd. – Sunsilk shampoo, Brooke Bond teas, and Fair & Lovely skin cream; largest number of CPG sales in India. This company is a subsidiary of Anglo-Dutch giant Unilever
• Godrej Consumer Products – Good Knight and Hit insecticide and AER air freshener
• Dabur – Vatika hair care, avurvedic personal care, and organic food products
• Nirma – soaps and detergents

Top foreign CPG companies in India and their popular products include:

• Nestle – milk products and instant noodles
• Procter & Gamble – Gillette shaving cream and Tide detergent
• Colgate-Palmolive – toothpaste and Charmis moisturizer