Consumer Goods

Consumer goods (CG) industry provides wide range of daily usable products that are manufactured according to individual usage and as per end user requirements. Consumer goods industry is a flourishing and intensifying industry due to its fast processing and quick customer services. Consumer goods mainly consists of food products and beverages, healthcare products, cosmetics products, household cleaning products, variety of home appliances, electrical & electronics goods and so on. On the basis of product durability, consumer goods are divided into two categories i.e. durable consumer goods and non-durable consumer goods. Durable consumer goods consists of long lasting products whereas non-durable consumer goods mainly includes single usable products. Non-durable consumer goods are referred as fast moving consumer goods (FMCG) or consumer packaged goods (CPG). Demand for non-durable consumer goods is more than durable consumer goods due to their less shelf life. Durable consumer goods have high life span of one to three years and more which leads to comparatively lesser investment by end users. Durable consumer goods are further sub divided into white consumer goods (e.g. Air conditioners, refrigerators, washing machines), brown consumer goods (e.g. mixers, grinders, iron, fans) and electronics consumer goods (e.g. TVs, PCs, cameras, mobiles).

 

Opportunities to be a part of global consumer goods industry

Over the last twenty five years, consumer goods industrydemonstrated high growth rate in comparison with other goods industries. Continuous increasing demand of consumer goodsacross the world, is drawing attention of manufacturers, retailers, management authorities to invest into this industry. Rapid urbanization coupled with lifestyle shifts is raising requirements of consumer goods by end users. These industries holds high share in social as well as economic growth of country as they creates bulk employment opportunities. Consumer goods industry is widely depend on technology by other industries to sustain their products in market. Latest technology like Internet of Things (IOT) is helping CGs industry towards better use of data to benefit retailers and customers. Increasing health awareness is raising requirements for personal healthcare products. Demand of private labeled consumer good products is attracting global manufacturers and retailers to invest more. Social media allows consumer good industry to advertise their products in global consumer goods market which is helping manufacturers, retailers to improve their sales.Changing government regulations are also boosting manufacturers to be a part of consumer goods business. Government of India's policies and regulatory frameworks such as relaxation of license rules and approval of 51 per cent foreign direct investment (FDI) in multi-brand and 100 per cent in single-brand retail are some of the major growth drivers for the consumer market in India.Significant trade activities in global market for consumer goods industry led to rampant increase in import and export of consumer good products across the globe. 

Owing to improved lifestyles, consumer goods market is expected to show significant growth in upcoming years. North America region dominated consumer goods global market in 2016. Trend is expected to be continued due to increasing health awareness in the region. FMCGindustry has been growing industry in the U.S. as 6% of GDP is contributed by consumer goods and service industry. Increasing population along with specific brand demand made Asia Pacific a second largest region in consumer goods and customer service industry. According to India Brand Equity Foundation, FMCGindustryin India increased by 11% over the last decade.Urban markets account for the major share (65 per cent) of total revenues in the consumer durables industry in India. In 2015, revenue from consumer durables industry in India stood at US$ 9.7 billion, which further increased to US$ 12.5 billion in 2016. There is a lot of scope for growth from rural markets with consumption expected to grow as penetration of brands increases. Latin America region is expected to indicate significant growth in next 10 years due to adaptation of foreign culture and rising demands of CGin the region.  

Key challenges in front ofglobal consumer goods Industry

To compete in global market, consumer goods industries should be aware of all operational, marketing challengessuch as,

  • Product differentiationwhich means to withstand different from other competitors for same product is a major challenge for all consumer goods industry.
  • As customer is more conscious about product usage, FMCGindustries need to be very careful about all regional government regulations about their products before manufacturing and final customer services.
  • As demand for consumer goods is changing rapidly, industries need to be flexible according to forecast market trends.
  • Falling prices due to rise in competition is a major worrying factor for FMCG industries. Companies are struggling to maintain their product quality in accordance with rising manufacturing cost.
  • Relaxation on import regulations is creating tough competition between local industries and leading brand industries.

 

Key global summits for consumer goods industry 

Global summits are helpful for new industries to gain knowledge because issues like product analysis techniques, opportunities for profitable growth in global market, retail regulations, recent trend and challenges in industries and many more are discussed by CGindustry experts. For instance,

  • Retail and Consumer Goods Analytics summit 2017, Chicago.
  • 14th Annual Consumer Goods sales and marketing summit 2017, New York.
  • 61st Global summit for CGF 2017, Berlin, Germany.
  • The CGF sustainable Retail summit 2017, Montreal.
  • The Future Leader Congress – 2017, Stockholm.

Key players in global consumer goods industry

Some of the leading consumer goods industriesacross the global are Nestle SA, The Procter & Gamble Company, Unilever PLC, PepsiCo Inc., The Coca Cola Company,Imperial Tobacco Group, Anheuser Bush InBev SA, JBS SA, Mondelez International Inc., Tyson Food Inc., L’Oréal SA, Phillip Morris International, 3M Company, Danone, Heineken N.V., Nike Inc., British American Tobacco PLC, SABMiller PLC, Henkel AG & Co. Kirin Holding Company ltd, Kimberley-Clark Corporation, Adidas AG, Whirlpool Corporation, Archer Daniels Midland Company. 

The two mega mergers in the consumer goods global industry:

  • ABInbev-SABMiller and Kraft Heinz - accounted for $175billion dollars
  • Brazil’s JBS expanding into Europe with its acquisition of Moypark and Heineken purchasing four mid-sized businesses in emerging markets. 
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