FMCG or fast-moving consumer goods are characterized by high demand and strict handling protocols or guidelines.
In this modernized era, FMCG stands out the most among the many categories of consumer goods; but what are they and why does it matter to know about them?
What are FMCG or Fast Moving Consumer Goods?
To completely understand the importance of FMCG, it is important to understand its basic definition. FMCG sells quickly and at a relatively low cost. Examples include packaged goods or perishable products.
As the name suggests they are fast-moving. FMCG disappear quickly once they are on the shelves because of their high demand and perishable nature.
What Constitutes FMCG or Fast Moving Consumer Goods?
There is a wide selection of products that are classified under this category. Almost everything in the grocery or convenience store is a fast-moving consumer good. This includes toiletries, beverages, over-the-counter drugs, and everything consumable.
Fast-moving consumer goods are being utilized at a high pace and in demand because they are necessities. Therefore, if something is used on a daily or frequent basis, it is a fast-moving consumer good.
Examples of Fast Moving Consumer Goods (FMCG):
Still not sure which products are fast-moving consumer goods? Here is a list.
Beverages classified as FMCG include flavored drinks or just water, bottled, canned, and boxed drinks. They have an expiry date and everybody needs to drink, resulting in fast turnaround time on grocery store shelves.
Packaged food (ready-to-cook meals/snacks)
All types of food with expiration dates so they need to be disposed of as soon as possible. And just like beverages, everybody needs to eat, whether it may be snacks or a quick ready-to-eat meal.
Yes, toiletries don’t expire and can be kept on the shelves for a period of time. But they are a necessity so that means that they are on-demand and don’t stay too long on the shelves. This includes soap, shampoo, facial wash, toothbrush, toothpaste, toilet paper, and so much more.
With its low cost and the satisfaction it provides, candies have a fast turnaround time and a short shelf life.
Cosmetics such as makeup and beauty products have become a necessity for a majority of the population. Products with strong demand and sold at a fast pace include:
- Hair dye
- Bleaching products
- Nail polish
Vitamins and non-prescription drugs are a necessity. Everybody gets sick and everybody needs supplements to aid their bodies in everyday life.
The most important, who could forget about the most basic essentials in every kitchen. Some dry goods that every household cannot live without are:
FMCG Industry in India
Being the second most populated country in the world, there is no doubt that India should be one of the countries with a pioneering and growing FMCG market. Apparently, that is indeed what is happening right now and what is more interesting are the products that have a greater market share.
In 2019, the major contributor in India's fast-moving consumer goods is household and personal care products at 50% of the overall market. This is then followed by 31% in healthcare and 19% in the food and beverage segment.
What Drove These Results?
Supposedly, food and beverage along with healthcare products should come out as the most sought-out fast-moving consumer goods. However, in India, even when the market share of the two are combined, they only come equal to household and personal care.
Unusual as it may seem, it can be explained by the change in culture and priority of the majority of its population. There has been an attitudinal shift. The new Indian consumer is characterized as having high awareness and consideration for health and nutrition.
The new generation of consumers has created a growing market in the country with more products to cater to the growing demands of making personal life even better. One of which is the growing infamy of humidifiers and air purifiers.
Along with the change in mindset is the decrease in taxation for products such as soap, toothpaste, and hair oil which have made them more affordable for the general population. As access to resources becomes easier, it fuels the consumerism nature among its constituents.
US FMCG or Fast Moving Consumer Goods
The United States of America does not have the same population as India, nor is it anywhere near it, but it is the third most populated country. It is also one of the most industrialized with a number of companies and corporations that contribute to the fast-moving consumer goods market.
Dominating FMCG Companies in the US
These companies are not your average food and beverage providers, instead, they generate billions in sales every year and millions in profits. They don’t just market one type of product but produce and distribute a number of them. Here are some of the companies that are dominating the FMCG market in the United States.
1. Procter & Gamble (P&G)
There is a good chance that one of the products you use is produced by P&G, enough to give you an idea of how big of a company they are. They have a wide range of products from personal care to household utilities.
2. Pepsi Co
Who hasn't heard about Pepsi? And this should give you an idea of the reach of their brand and products. There is no question that they are one of the pioneers and giants in the sweetened beverage industry. What’s more interesting is the fact that their product is not just Pepsi but a number of other packaged and processed snacks including Doritos, Lays, and Cheetos.
3. Coca Cola
Trailing behind Pepsico is their number one competitor which is Coca Cola. Along with its number one product, Coca Cola, they also have a number of other beverages in production.
4. Kimberly Clark
A lesser-known company giant but you have at least used one of their products once. They produce personal care paper-based products such as Kleenex facial tissues and Huggies diapers.
5. Kraft Foods
Kraft markets a multitude of products, from Heinz tomato sauce to an assortment of daily consumables. Most likely, you have at least one Kraft product inside your kitchen.
FMCG or Fast Moving Consumer Goods Companies in South Africa
Every nation is consistently gearing towards a more modern society with people being more aware of their health and quality of life. In that regard, even South Africa is experiencing constant growth with its fast-moving consumer goods market.
There are a lot of driving forces in this development, from growth in population to people having more disposable income. However, since the majority of the households are yet to be in level with modern houses, there are still setbacks to the progress of the FMCG market, especially in the personal care products department.
Despite what may seem to be delay factors, the region’s revenue growth in the FMCG market has exponentially grown throughout the years. To put this into perspective, in 2017, the GDP grew by 4.8%. Increased personal consumption is one of the main reasons.
Dominating FMCG Companies in South Africa
Along with the rise of the consumerist nature of the population comes the growth of companies involved in the manufacture and marketing of fast-moving consumer goods. Here are some of them that are dominating the market share.
1. Tiger Brands Ltd.
The biggest manufacturer of packaged goods in South Africa. They produce a wide range of grocery products that every African household cannot exist without.
2. RCL Foods Ltd.
Coming in second is a company that also competes in the packaged goods department. Just like their competition, they have a wide assortment of products allowing them to leave a massive market share footprint.
3. Flour Mills of Nigeria
The company manufactures and markets kitchen essentials such as flour and oil among other things.
4. Distell Group Ltd.
Stirring away from the majority of food and dry goods producers, Distell is a brewing and beverage company producing a wide range of alcoholic drinks.
5. Pioneer Foods Group Ltd.
Coming in fifth place, Pioneer competes with the majority of the massive companies in the packaged goods segment. The same with its competition, they produce a wide array of products allowing them to create a huge impact on the lives of the region’s citizens.
FMCG or Fast Moving Consumer Goods Companies List in India
There are countries that are top destinations for big industrial and manufacturing players and India is one of those. With its massive population, growing disposable income, and the shifting attitude of the general public into a more consumeristic nature, it paves the way for the influx of revenue for fast-moving consumer goods companies. Here are some of them.
1. Hindustan Unilever Ltd.
Raking the top spot, and for good reasons, the company has a total of 40 brands and they spread throughout 12 different categories. Home care, personal care, food, and beverages, name it and this company has it. According to a survey, 9 out of 10 households in India have at least one of their products.
2. ITC Ltd.
Coming in second in the rankings is a company that is also a conglomerate that has products spanning over different categories, from personal care to beverages.
3. Nestle India Ltd.
With over 2000 brands in both local and global markets, there is no doubt that Nestle is a huge fast-moving consumer goods company. In India, they have a total of 8 manufacturing facilities and 4 branch offices.
4. Britannia Industries Ltd.
A contender in the consumables department, Britannia is a company that has a 100-year legacy in the country. With that time, it has cultivated a number of brands and spread throughout different categories such as biscuits, dairy products, and beverages to name a few.
5. Godrej Consumer Products Ltd.
From home care to personal care, Godrej is a company that is leading the market in India. They ranked as the largest home insecticide and hair care player, second in soaps, and first in air fresheners.
FMCG or Fast Moving Consumer Goods Companies in China
Raking the top spot as the most populated country in the world, China has the biggest customer market compared to any nation. That paired with the fact that there is an ongoing trade war between it and the United States, there is limited competition in the fast-moving consumer goods market.
The results are reflective of the current situation with companies seeing growth year after year. These are not just your typical food and beverage providers, but massive conglomerates with a multitude of subsidiaries.
Here are some of them.
1. WH Group
On top of the list of the biggest fast-moving consumer goods companies in China is WH Group and concentrates on the segment of meat and food processing.
2. China Agri-Industries
Trailing behind is a company that produces and markets a wide range of products in different categories including oilseed, wheat, and rice among others. Generally, they are the leading agricultural products supplier in the whole of China.
3. Yili Group
In terms of dairy products, Yili is a big player in the fast-moving consumer goods market. As expected, they provide a wide range of products and even ranked 1 in the Asian dairy industry.
4. Mengniu Dairy
A competitor against the Yili Group, Mengniu Dairy is another top fast-moving consumer goods company in the dairy segment. However, they have a more comprehensive range of products as they also include ice cream.
China, along with other Asian nations, extensively consume noodles. Tingyi is taking a majority of that market as they are the largest instant noodle producer in the whole of China. They also have different products such as beverages, cakes, and other supporting industries.
How to Market Fast Moving Consumer Goods or FMCG
Regardless of which country the company is based or what segment in the fast-moving consumer goods market they are competing, there is one thing all of them are doing and that is constant and continuous marketing campaigns to beat their competitions.
Most of the products each of the major companies provide are only slightly different from their competition. In other cases, the smaller companies are actually producing better products but are not dominating the market share.
Everything boils down to marketing. As companies find ways for their products to appeal to the general population, the more they become the top choice.
It is also about awareness. No matter how good a product is, if nobody is aware of the existence of it, it definitely will never be recognized on the shelves of grocery and convenience stores.
So, the question now is, what are the big players doing right?
The Push and Pull and Strategy
Different companies perform different marketing strategies depending on their market and the conditions they face in each demographic. However, in the most basic concept, they employ either the push or the pull strategy.
From the name itself, the push marketing approach means that companies push their products towards their customers. They do this by having as many wholesalers, distributors, and retailers to have their products on their shelves. When products are on the top shelves, it is likely to gain the attention of the customers and be the first choice.
Simple as it may sound, this is a strategy applicable to the fast-moving consumer goods market. Remember, the shelf life of these products is short. There is a fast turnaround time because they are necessities and therefore will be bought, it's just a matter of who gets to be sold first.
As a matter of fact, most consumers don’t think through the items they take from the grocery or convenience store. Looking for a toothbrush? The first that they reach is the one they are going to purchase.
The pull strategy is the complete opposite. Instead of pushing their products down to the consumers, they advertise the benefits to pull in the interest of probable customers. When a majority of the population has gone out in search of these products, retailers start to want them on their shelves.
As compared to the push strategy, pull allows companies to know which locations are more likely susceptible to advertisements and have their decisions influenced. This makes it possible to efficiently and effectively deliver products to areas of high revenue.
A Balance Between the Two
No one strategy is better than the other. A company doesn’t necessarily only adopt one over the other but instead, a balance of both push and pull strategy are being implemented. The two should always go together.
The push is a fast way to overwhelm the competition. As new products are being introduced, the old ones are buried down and forgotten.
On the other hand, the pull allows companies to test the waters and only expend time and resources on proven markets. A strategy for experimental and completely new and unique products.
Finding the balance between the two entails a comprehensive knowledge of the location. Which areas are more susceptible to advertisements? Where are communities of high density and of massive expendable income?
Packaging Plays A Huge Role
Each strategy can be further supplemented with different approaches. As the pull can be made more effective with attractive and comprehensive advertisement campaigns, the push can be further forwarded through its packaging.
Remember that the push doesn’t involve any prior notice or demand from the side of the consumers. Instead, companies provide based on what they know is essential and needed. This means that acquiring the attention of the customer is entirely based on the appeal of the product right there and then.
The packaging is what immediately catches the interest of a customer. Even if they are not in the market for noodles, if the packaging is enticing, they end up grabbing one and taking a look. This is the reason why products constantly have design revisions, to keep them interesting and stand out from the competition.
However, the concept of packaging is not just on the design, but on the functionality of it as well. Cardboard boxes come in different shapes, how to open them varies from one product to another, and the convenience of understanding nutritional facts is not the same for every product.
Increasing the appeal of a product through convenient packaging has become standard practice, and it is understandable why. Most people would rather go for the resealable packaging than the traditional rippable plastic packing.
People that have an affinity towards a healthier lifestyle, and easier to understand the nutritional facts section on the packaging is an immediate go-to choice. This applies true for milk, cereal, and fruit juices.
How to Sell FMCG or Fast Moving Consumer Goods: Be Creative Using QR Codes
As QR codes are becoming more practical, almost every major player in the fast-moving consumer goods market is integrating them in their approach towards improving their packaging. It gives a digital aspect to the printed media, opening a lot of possibilities.
Depending on the brand, they have their own unique way of implementing and making good use of the cheap yet useful technology that is QR codes.
QR Codes For More Information
The most common way QR codes are being used on the packaging of fast-moving consumer goods is through providing more information about the product. When scanned, a customer is brought to a page where they can read more about health benefits or promotional content.
Simple as it may seem, but it is effective. There are people who are interested in the packaging of products along with the desire to learn more about it. Through QR codes, more information can be delivered without limits, making the product more appealing to this audience.
Take for example Heinz, for their “green” packaging, they included a QR code where customers can learn what their new packaging meant for the environment.
Engaging QR Codes
When companies have more resources to invest, they don’t just settle with directing customers to a webpage, but instead to some type of interactive content. This includes small games which in most cases, would allow customers to win something at the end.
Games are not the only way to engage the customers. QR codes are also being programmed so that depending on what time of the day or how many times the QR code has been scanned, the customer is brought to a different type of content, and this is something that Coca Cola has done in the past.
Promos and Discounts For QR Codes
A common approach for fast-moving consumer goods companies is to use QR codes to deliver discounts and promotions. When customers scan the image, they are immediately issued with a voucher or in exchange for their basic contact information. This is not just beneficial for the customer but to the company as well as it gives them more avenues for direct marketing.
QR Codes For App Downloads
When talking about big players in the fast-moving consumer goods market, most of them are likely going to have an app. Unilever for example has a wide array of available apps in the Google play store, ranging from productivity to personal development.
These companies would then put their QR codes on their packaging to direct their customers to their apps. This functions as a fast way to market their apps and leads to a circular cycle. Products lead to app downloads, and those apps make the products more appealing which in turn urges the customers to buy more.
Brands that manufacture fruit juices, for example, have fitness apps that urge customers to follow a healthy lifestyle. Along with it is the constant reminder that their juices are an essential ingredient in that pursuit.
Related: How to Use App Store QR Codes
Leaving Reviews with QR Codes
QR codes can also be made to make customers leave a review. It may seem like it only serves the company, but in reality, it is actually appealing to the audience to know that what they have to say matters. Reviews create a connection between the customer and the brand and when that happens, they are likely going to prefer their products even more.
As a matter of fact, people are likely going to choose a brand that allows for reviews against a competition that does not. This is because people want to get heard, so when they see that reviews are a priority for the brand and that they made it easy for their customers to leave one, it becomes a selling point.
FMCG Market Outlook: The Future of Fast Moving Consumer Goods Market
The fast-moving consumer goods market is progressing in an unprecedented manner as the lifestyle and priorities of people change. Along with it comes the more competitive market that urges players to become more versatile to stand out from the competition. As a result, marketing strategies are changing, implementing modern cost-efficient technologies such as QR codes to have an edge.