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TOPIC IMPACT OF RECESSION ON FMCG SECTOR INTERACTIVE SESSION PRESENTED BY:- ROHIT SHARMA ROHIT PANDEY. PRESENTED TO:- MRS.DEEPALI KULKARNI

What is FMCG ?: 

What is FMCG ? Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged goods. Items in this category include all consumables (other than groceries/pulses) people buy at regular intervals. The most common in the list are toilet soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged foodstuff, household accessories and extends to certain electronic goods. These items are meant for daily of frequent consumption and have a high return. A major portion of the monthly budget of each household is reserved for FMCG products. The volume of money circulated in the economy against FMCG products is very high, as the  number of products the consumer use is very high. Competition in the FMCG sector is very high resulting in high pressure on margins. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015.

MEANING OF RECESSION: 

MEANING OF RECESSION What Does Recession Mean? A significant decline in activity across the economy, lasting longer than a few months.It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP).

IMPACT OF RECESSION ON FMCG SECTOR : 

IMPACT OF RECESSION ON FMCG SECTOR India's fast moving consumer goods industry has so far been AFFECTED BY the slowdown in the economy and a dip in consumer sentiment. If we go by the numbers for AUGUST 2008 and estimates for SEPTEMBER 2008 , the growth only seems to have got better when compared to the earlier months. In SEPTEBER 2008 , the FMCG sector recorded a 22% and 27% value growth respectively. The estimates for 2008 are also good, whereas in NOVEMBER 2008 , the growth down to 12% from13%. As per report, consumers are holding on to their monies due to the uncertainties in the markets. However, they are spending, but on small purchases. Hence, the volumes and growth in the FMCG sector has seen a dip.

Top companies affected by recession: 

Top companies affected by recession LOREAL (SALES DOWN BY 2.7%) Colgate and Palmolive(SALES DOWN BY(11.7%) General mills(SALES DOWN BY 6.8%) Marico industries Reckitt benciser’s P&g Asian paints

Customer response during recession: 

Customer response during recession Customer return to cheaper goods Consumer are cutting back on eating out this hurt restaurants and bars Consumer turning to street stalls. According to reasearch counducted by TNS brisbanities stay home and cooked food. Parents cheesed off with packed lunch guidelines.(64%).

Companies’ policies during recession: 

Companies’ policies during recession COST CUTTING :-Starbucks has introduced their own value offering ,advertised as ”SOMETHING GOOD TO EAT FOR LESS THAN $4”. GOOD SERVICES:-In the Philippines,fast food operator Jollibee launched a new lower priced concept, called Manong Pepe which offers home cooked meals similar to those offered by street stalls .

COMPANIES POLICES (CONTD.): 

COMPANIES POLICES (CONTD.) CUT CREDIT EXPOSURE TO MODERN DAY RETAILERS :-EG:-COMPANIES LIKE GODREJ,DABUR DEAL IN SHORT TERM PROJECT. HIRING FREEZES. SALARY CUT. REDUCED SALARY INCREASE BUDGET. MAINTAIN A FIXED PAY INCREASE CYCLE.

Companies who performed well during recession: 

Companies who performed well during recession Cadbury:-cadbury exceeded its growth target 4-6% and increased sales by 8% in 2008. Nestle:-nestle also achieved 8% organic growth in 2008 despite the global economic downturn. Hershey:-hershey reported 2008 sales growth of nearly 4 %,a significant improvement on a virtually flat performance in 2007. Amway:- Despite the global meltdown, Amway, India’s number one direct selling company is confident of achieving a growth of over 25%.

DABUR FINANCIAL REPORT FOR 2009: 

DABUR FINANCIAL REPORT FOR 2009 Tuesday, July 14, 2009 Dabur - 2008-2009 Annual Report DABUR INDIA LIMITED ANNUAL REPORT 2008-2009 Table: Financial results:(Rs. in crore) 2008-09 2007-08 Turnover (including other income) 2439.23 2111.31 Profit before Tax 425.00 365.18 Add: Provisions of earlier years written back 0 0.68 425.00 365.86 Less: Provision for Taxation - Current 47.48 40.57 Provision for Taxation - Fringe Benefit 6.51 7.08 PROFIT AFTER TAX:-372.84315.92

COMPANY GAIN LARGEST PROFIT DURING RECSSION: 

COMPANY GAIN LARGEST PROFIT DURING RECSSION Hindustan Unilever Limited (abbreviated to HUL) ( BSE : HUL) formerly Hindustan Lever Limited is India’s largest consumer products company and has an annual turnover of over Rs 13,000 crores (calendar year 2007). It was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd.. It is headquartered in Mumbai , India and has an employee strength of over 15,000 employees and contributes for indirect employment of over 52,000 people. The company was renamed in late June 2007 to “Hindustan Unilever Limited.

BEST QUOTES BY MR.PINCKEY(AMWAY CEO.): 

BEST QUOTES BY MR.PINCKEY(AMWAY CEO.) "I am not saying that our company is recession-proof but it is recession-resilient," the Amway India Enterprises managing director and chief executive, Mr. William Pinckney, said. Mr. Pinckney claimed that FMCG unlike the automobile industry would not be badly affected by the economic crisis. "People may stop or postpone purchasing a car but they will certainly not stop purchasing a shampoo bottle or a shaving cream tube.

conclusion: 

conclusion In our point of view that FMCG companies have to find alternatives to increase productivity and by using good scientific methods and government have to help industries by giving easy tax methods and lower import and export duties.

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