Ac Neilson Report On FMCG

Changing Gear – The emerging
States for FMCG in India
November 4, 2009
Confidential & Proprietary • Copyright © 2009 The Nielsen Company
Agenda
ØState Clusters
ØMarket Strategies
ØEmerging Scenario
Page 2
2009 2015 2020
Changing Gear November 6, 2009 Page 2
Confidential & Proprietary. Copyright © 2009 The Nielsen Company
Agenda
ØState Clusters
ØMarket Strategies
ØEmerging Scenario
Page 3
2009 2015 2020
Over half of the population still very low on
FMCG consumption
FMCG Value Growth ( CAGR 2009 over 2004)
Maharashtra
GRID II
UP
WB
AP
GRID I
Bihar
Rajasthan Assam
TN
Karnataka Punjab
Haryana
Gujarat
Orissa
MP
GRID III
Page 4
Per Capita FMCG Consumption (Monthly in Rs )
Size of Bubble : Per Capita Monthly Income
Number on the bubble indicates per Cap FMCG spend
Demographic Differences
AP, Mah UP, Bihar MP, Orissa
Grid I
GRID I Grid II
GRID II Grid III
GRID III
Income and High Low Low
Affluence
= Spending Patterns
Per Capita Rs. 29,582 Rs.11,718 Rs.13,549

Annual Income
SEC A1+ 4.4% 3.5% 2.7%
SEC D/E 42.8% 46.7% 49.9%
Categories Luxury and Nutrition, Basic Mass

Convenience Commodity Categories
Page 5
to Branding
and Mass
NCAER; RMS;NRS
Grid I
GRID I Grid II
GRID II Grid III
GRID III
Affluence
= Spending Patterns
Population Average High High
Growth
= Assured Growth
CAGR 1.2% 1.6% 1.5%

(09 over 04)
Page 6
Census GoI 2009
Projections
Grid I
GRID I Grid II
GRID II Grid III
GRID III
Affluence
= Spending Patterns
Growth
= Assured Growth
% Rural Medium High High
Population
= Vast untapped potential
% Rural 64% 80% 77%

Population Page 7
Census GoI 2009
Projections
Grid I
GRID I Grid II
GRID II Grid III
GRID III
Affluence
= Spending Patterns
Growth
= Assured Growth
Population
Population Average High Low
Density
Page 8
Density 277 593 183
Census GoI 2009
Projections
Grid I
GRID I Grid II
GRID II Grid III
GRID III
Affluence
= Spending Patterns
Growth
= Assured Growth
Population
Population Average High Low
Density
= Return on Investment (Distribution)
Accessibility Average Average
Page 9
Low
Census GoI 2009
Projections
FMCG Market Structure
Grid I
GRID I Grid II
GRID II Grid III
GRID III
Regional Players Average High Low
= Competition intensity, Level of Enterprise
No. of Local 600+ 1300+ 400+

Companies
Page 10
Nielsen RMS Information
Grid I
GRID I Grid II
GRID II Grid III
GRID III
% Modern Trade High High Low
and Specialised = Trade Evolution
Channels
% Modern Trade 4% 1% 1%
% Specialised 6% 5% 3%

Trade Page 11
Grid I
GRID I Grid II
GRID II Grid III
GRID III
% Modern Trade High High Low
and Specialised = Trade Evolution
Channels
Product High Average Average
Stocking Pattern
= Shelf Clutter
No. of 25 18 Page 12 18

Categories
(Grocers/Gen)
In a Nutshell
Grid I Grid II Grid III
• Ability to Spend
• Accessibility
• Competition
• Channel Evolution Page 13
Agenda
ØState Clusters
ØMarket Strategies
ØEmerging Scenario
Page 14
2009 2015 2020
Opportunities, Challenges and Strategies
Driving Consumption
•Two pronged approach for Urban and Rural markets
•Continuous value additions
“ Focus on Urban markets for Value and Rural for volumes”
Sales Head of an Large HPC company
Examples:
Wheel for the lower pop strata consumers and Surf Excelmatic for the Metros.
Page 15
Sachets in Rural, Low priced and conveniently packaged products of CP
The Rural Mass
•Cost of distribution and
•Conversion of consumers from unbranded to branded
“ Success in Rural areas firstly depends upon offering the right
product mix for stores, adapting promotions and ensuring that a tight
focus on gotomarket management or innovative ways of reaching
rural consumers”
Marketing head of a National company grown big (earlier a regional player)
Page 16
Examples:
Shakti and Echoupal
Expansion across States
•Being a Local brand
“ Additionally companies should introduce product variants that
account for distinctive regional tastes as well as a wide range of
package size and prices to account for purchasing preferences of
India’s many consumer segments”
Sales Head of an MNC operating in OTC and Nutrition segments
Examples:
Tea and Salted snacks to cater to regional tastes
Page 17
Punjab Haryana large pack markets vis a vis UP / Bihar
Above all
Brand Focus
“ We realise that the most powerful counter to price (Regional
players) and Private labels will be our brands. Hence strong Brands
supported by strong consumer preferences would help us convert
consumers and bargain with Large retailers ”
Marketing Head of a Personal care company
Page 18
Agenda
ØState Clusters
ØMarket Strategies
ØEmerging Scenario
Page 19
2009 2015 2020
Parameters used to arrive at growth states
2015 2020
Income and Affluence Spends on
Infrastructure
Development
Industry Interviews % Youth
Rural Opportunity
population
MT Growth in
Human Development Cost of Distribution states
Accelerating Rural
Development
Trade Development
Page 20
UP, Rajasthan, WB, AP, TN, Karnataka,
Bihar Delhi
Maharashtra, Punjab,
Haryana, Gujarat,
Assam
Growth%
MP, Orissa
2009
Consumption WB, Bihar, Gujarat, AP, UP,

Assam Maharashtra,Delhi,
Karnataka, Kerala,
Growth%
2015 Orissa, MP, Punjab, Haryana, TN
Rajasthan
Page 21
Changing Gear November 6, 2009
Consumption
Page 21
WB, Bihar, Gujarat, AP, UP,
Assam Maharashtra,Delhi,
Karnataka, Kerala,
Growth%
Orissa, MP, Punjab, Haryana, TN
Rajasthan 2015
Consumption WB, Bihar, AP, UP,

Gujarat, MP, Maharashtra,
Orissa, Assam Delhi,
Karnataka
Growth%
2020 Rajasthan Punjab, Haryana,
TN,
Page 22 Kerala
Changing Gear November 6, 2009
Consumption
Page 22
1.Urban
2.Conversion
High MP
AP
Rajasthan
Orissa 1.U & R
Maharashtra
2.Conversion
Investment
Assam
UP
Bihar
1. Consumption
Punjab Karnataka TN Delhi 2. Upgrade
Haryana Kerala
Moderate 1. Consumption
2. Niche products Page 23
Moderate Opportunities High
Every yesterday is but a Dream..
Every tomorrow a Vision of Hope..
The Glory of Action is the Bliss of Growth !
Excerpts from Kalidasa
Page 24
Page 25

Confidential & Proprietary • Copyright © 2009 The Nielsen Company

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Changing Gear – The emerging

Changing Gear November 6, 2009 Page 2

Changing Gear November 6, 2009 Page 3

Per Capita Rs. 29,582 Rs.11,718 Rs.13,549

Categories Luxury and Nutrition, Basic Mass

CAGR 1.2% 1.6% 1.5%

Changing Gear November 6, 2009 Page 6

% Rural 64% 80% 77%

Changing Gear November 6, 2009 Page 7

No. of Local 600+ 1300+ 400+

Changing Gear November 6, 2009 Page 10

% Specialised 6% 5% 3%

Changing Gear November 6, 2009 Page 11

No. of 25 18 Page 12 18

Changing Gear November 6, 2009 Page 12

Grid I Grid II Grid III

Changing Gear November 6, 2009 Page 13

Changing Gear November 6, 2009 Page 14

Changing Gear November 6, 2009 Page 15

Changing Gear November 6, 2009 Page 16

Changing Gear November 6, 2009 Page 17

Changing Gear November 6, 2009 Page 18

Changing Gear November 6, 2009 Page 19

Changing Gear November 6, 2009 Page 20

Consumption WB, Bihar, Gujarat, AP, UP,

Consumption WB, Bihar, AP, UP,

Moderate Opportunities High

Changing Gear November 6, 2009 Page 23

The Glory of Action is the Bliss of Growth !

Changing Gear November 6, 2009 Page 24

Changing Gear November 6, 2009 Page 25

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