Consumer Goods

Consumer goods (CG) industry provides a 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 consist of food products and beverages, healthcare products, cosmetics products, household cleaning products, variety of home appliances, electrical & electronic goods and so on. On the basis of product durability, consumer goods are divided into two categories; durable consumer goods and non-durable consumer goods. Durable consumer goods consist of long lasting products whereas non-durable consumer goods mainly include 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 which leads to comparatively lesser investment by end users. Durable consumer goods are further sub divided into white consumer goods (air conditioners, refrigerators, and washing machines), brown consumer goods (mixers, grinders, iron, and fans) and electronics consumer goods (TVs, PCs, cameras, and mobile phones).

Opportunities to be a part of global consumer goods industry

Over the last 25 years, the consumer goods industry has demonstrated high growth in comparison with other goods industries. Continuously increasing demand of consumer goods across the world is drawing attention of manufacturers, retailers, management authorities to invest in this industry. Rapid urbanization, coupled with changing lifestyle is driving demand for consumer goods from end user industries. These industries hold a high share in social as well as economic growth of the country as they create bulk employment opportunities. The consumer goods industry depends on technology by other industries to sustain its products in the market. Latest technology such as Internet of Things (IOT) is helping the consumer goods industry towards better use of data to benefit retailers and customers. Increasing health awareness is driving demand for personal healthcare products. Demand for private labeled consumer goods is attracting global manufacturers and retailers to invest more. Proliferation of social networking services is allowing manufacturers of consumer goods to advertise their products and expand their consumer base. Changing government regulations such as the government of India's relaxation of license rules and approval of 51% foreign direct investment (FDI) in multi-brand and 100% in single-brand retail are driving the growth of the consumer goods industry. Significant trade of consumer goods across the globe is also favoring the growth of this industry.

Changing lifestyle of consumers is also contributing to the growth of the consumer goods market. In 2016, North America dominated the global consumer goods market and the trend is expected to continue due to increasing health awareness in the region. The FMCG industry contributes 6% of the U.S GDP. The increasing population along with specific brand demand has made Asia Pacific the second largest market in the global consumer goods market. According to India Brand Equity Foundation, the revenue share of the FMCG industry in India has increased by 11% over the last decade. Urban markets account for the major share (65%) of the total revenue generated by the consumer durables industry in India. In 2015, revenue generated by the consumer durables industry in India was 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 over the forecast period. Latin America is expected to exhibit significant growth in the next 10 years due to influence of the western culture and rising demands for consumer goods in 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 challenges such as,

  • Product differentiation refers to the ability of a seller to show how their product or service id different from other competitors. This is one of the major challenges faced by players operating in the consumer goods industry.
  • Adherence to various government regulations across different regions.
  • Changing consumer habits
  • Falling prices due to rise in competition is a major worrying factor for manufacturers. Companies are struggling to maintain product quality in accordance with the rising manufacturing cost.
  • Relaxation of 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 such as product analysis techniques, opportunities for profitable growth in the global market, retail regulations, recent trend and challenges in industries and many more are discussed by CG industry 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 players operating in the global consumer goods market 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., LL’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 global consumer goods industry:

  • ABInbev-SABMiller and Kraft Heinz - accounted for US$ 175 billion
  • Brazil’s JBS expanded its operations to Europe with the acquisition of Moypark and Heineken, and purchasing four mid-sized businesses in emerging markets.

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