FMCG Products

The food-processing sector in India is a sunrise sector, and it has gained prominence recently. Major processed food products exported from India include processed fruits and juices, pulses, guar gum, groundnuts, milled products, cereals preparations, oil meals, and alcoholic beverages. Already with products worth US$ 25.6 billion in FY22, India has created history for agricultural and processed food exports.

Export of APEDA products fetched $7.4 billion as of April-June 2022, which grew by 31% from $5.7 billion posted last year same period, according to the data shared by the Directorate General of Commercial Intelligence and Statistics. Concerning exports, the real figures of some other categories were a 59.1% growth of processed fruits and vegetables, 37.66% growth of cereals and miscellaneous processed items, a growth of 9.5% of meat, dairy, and poultry products, 25.5% of basmati rice, 5% growth in non-basmati rice, and 50% in miscellaneous products. In India, the food sector is marked by transitions.

The Agricultural and Processed Food Products Export Development Authority (APEDA) has projected that the sector would grow at a compounded annual growth rate (CAGR) of 3% during the period 2022-2030.

• Food and Beverages: This is the biggest segment, which contributes almost 50% to the total FMCG market.
• Personal Care: The products belonging to this category include skincare, haircare, cosmetics, etc. The contribution would be around 20-25% to the market.
• Household Care: Under this fall cleaning products, detergents, home care products, and contribute around 10-12% to the market.
• Health Care: Over-the-counter medicines, and health supplements, are some of the products under this category and form around 5-6% of the market.

People-powered development and increased prices of products—necessities, for the most part—supported the expansion of the FMCG industry in India. FMCG employs more than three million people, accounting for nearly 5% of total factory employment in India. Revenues from FMCG sales in the country experienced a 7-9% hike over 2022-23.

Favourable government initiatives and policies, growing rural market, and youth population, new branded products, and growth of e-commerce platforms are other crucial growth drivers for the retail sector. This will make resilience the single-most key factor in manufacturing processes, daily operations, retail, and logistics channels, consumer insights, and communication that would enable the FMCG company to bear the test of time and continue creating yet more value for their consumers. India's fast-moving consumer goods sector gained 7.5% by volumes in the June quarter of 2023, the highest volume for the past eight quarters and driven by rural resurgence and a slight uptick in modern retail.

The Indian food processing industry is one of the largest contributors to growth, production, consumption, and exports in the nation. The manufacturing and production of the food industry range in several varieties such as meat products, poultry products, fisheries, fruits and vegetables, spices, milk and milk-based products, alcoholic beverages, plantations, cereals, and grains. Cocoa products, chocolates, confectionary, soya-based articles, mineral water, and foods that are high in protein also fall in this category. With the liberalization in August 1991, it proposed and invited diversified projects, foreign collaborations, joint ventures, 100% export-oriented units, industrial licenses, etc., to promote development and investment in the food processing sector. The total FDI inflow in India amounted to Rs. 2,934.1 crore in FY21, marking an increase from US$ 368.8 million.

India is one of the world's biggest food producers, representing a large and increasing market. In 2021, the food and grocery retail market in India topped US$ 11.3 trillion, thus forming part of the largest in the global economy.

• Market Size: The FMCG sector in India is pegged at USD 110 billion and is expected to reach USD 220 billion by 2025.
• Growth Rate: The industry has grown at a CAGR of 9-10 percent over the last ten years.

• Rise in Income Levels: Improving disposable incomes of India's vast middle class are driving demand for FMCG products.
• Urbanization: At a fast pace, urbanization is altering consumer lifestyles, creating an increase in demand for branded and packaged goods.
• Rural Market Expansion: More than 65% of the country's population still dwells in rural villages. As a result, the rural markets have gradually become a strong growth driver for the FMCG industry. Rural penetration is taken seriously by companies nowadays.
• E-commerce: The growth in online retail has opened new ways for FMCG companies to access a larger customer base.

With its favourable demographic trends, increase in urbanization, and improvement in income levels, the FMCG sector in India is undoubtedly set for strong growth. Further innovations in product offerings, newer channels of distribution, and a 'rural' focus will strengthen the growth prospects for this sector.

The FMCG Industry of India is dynamic and fast-evading, with huge growth potential. While challenges do exist, the opportunities offered by the growing market size, the rising incomes, and the expanding rural reach make this sector quite attractive for investment and business expansion.

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