IBT Partners has specialised knowledge in the FMCG sector and provides financial, business and technical consultancy services.

The FMCG* industry has specific challenges that need appropriate expertise. Our know-how helps you achieve your international business and trade development goals. We offer you sector-specific knowledge, as well as our contacts and opportunities for networking.

Our services and solutions are tailored to the needs of each of our customers, please see Government and Corporate for more detailed information.

Read more about the FMCG sector:

• Background
• Current challenges
• Opportunities

FMCG background information

FMCG industry involves all activities throughout the supply chain including production, distribution, sales and marketing of consumer packaged goods. These are characterised by frequent and regular consumption intervals. The sector is marked by continuous fierce competition.  Success depends on controlled operational costs, strong distribution networks and partnerships with renowned companies. Rising demand in emerging markets offers new growth but also challenges.

Current challenges in the FMCG sector

Keeping pace with consumer trends and competition are the perpetual challenges of FMCG companies. Today, consumers increasingly demand a high level of product customisation. Consumer groups are also less well defined, as customers are more fragmented, expecting products to exactly match their needs and lifestyles. In order to succeed in this sector it is important that FMCG companies track underlying consumer behaviour to target better differentiated products¹.

Further challenges are faced by companies that expand their sales abroad, notably to developing countries. These include underdeveloped infrastructure, weak distribution networks, lack of regulation, and the need to lower profit margins in order to remain competitive. 

Opportunities in the FMCG sector

In order to keep pace with developments in the FMCG sector, it is important to have access to actual, accurate and complete information and in-depth expertise. We will help you to address all important issues, including trends, key success factors, advancements and innovations, supply and demand development, operational and financial risks, benchmarking, as well as regulations and opportunities for funds and grants.

Some of the key opportunities and trends in the FMCG industry include:

• To read about all opportunities regarding food, go to our food sector

• Redefining natural

  → So far many companies have been using the fashionable term "natural" in their marketing strategies. However, new regulations are expected to reduce the number of misleading ads by specifically defining terms of "natural". The emphasis will be on promoting positives of what is in the product, rather than on highlighting what is not in them⁵.

• Emerging markets

  → It is no longer possible to ignore newly emerging markets in a FMCG company's long term global strategy. India has become a key targeted country, with average growth in the FMCG industry of 11% per annum over the past decade². The rapidly growing demand reflects increasing disposable income and improving living conditions. According to a study carried out by Nielsen, India's FMCG market is expected to hit $100bn by 2025³. Other emerging growth markets for FMCG include China, Eastern Europe, and South America.

• Private label

  → Increased competition for private label forces companies to lower their margins or innovate rapidly in order to justify their premiums. At the same time retail consolidation brings new opportunities to establish strategic partnerships¹.

• Supply chain

  → Optimising your supply chain is of paramount importance. But today's supply chain includes high technology responses. Frequently close partnerships with the logistics industry are needed.

• Brand recognition

  → Building and maintaining brand recognition require sustained advertising and marketing efforts. Global leader Reckitt Benckiser, boasts that it is one of the largest spenders in media, promoting its brands such as Calgon, Woolite, Nurofen or Air wick⁴.

• Less sugar

  → Pressure is on reducing sugar, sodium and high fructose corn syrup in products. Sugar is increasingly combined with stevia sweetener to lower the overall sugar level⁵.

• Honesty 

  → Transparency is becoming one of the decision-making factors that will influence customer's final decision, whilst giving companies a new opportunity for their marketing strategies⁶.

• Sustainability

  → Remains very important, with further focus on reduced packaging while incorporating innovative solutions⁵.

• Professional products and services at home

  → Mainstream brands are expected to expand their range of professional products and services, such as home dry-cleaning or restaurant-style meals⁵.

• Retro style 

  → Even though the economic crisis is over, nostalgia about the past is present. Many companies took advantage of it, while broadcasting old/old-style ads and packaging. This trend is expected to continue⁵.

• One brand throughout your life 

  → While incorporating strategies for diverse target groups, focus is on having a range of products adjusted to every age group of customers. Lifetime loyalty to favourite brands is on the rise⁶. 

• Mobile e-commerce

  → Online presence and offer of possibility to pay with smartphones will become necessary for many retailers, as mobile e-commerce is on rise.

• Alternative packaging

  →  Especially the wine industry expands ways of packaging their products. You can already find canned take-away wine, or wine sealed in plastic cups often sold on trains. Moreover, in restaurants you can be offered wine also poured from kegs, barrels, taps, canteens and many other inventions are expected to come⁷.

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* Fast Moving Consumer Goods, alternatively called CPG - Consumer Packaged Goods, including amongst others: food, drinks and diary products, glassware, stationary, pharmaceuticals, consumer electronics, plastic goods, household products.

1) Bain. 2011. Consumer Products. Online at: http://bain.com/bainweb/Consulting_Expertise/industries_detail.asp?indID=4

2) Business Standard. 2010. The future of FMCG. Online at: http://www.business-standard.com/india/news/the-futurefmcg/416391/

3) The Economic Times. 2010. FMCG in rural India to touch $100bn by 2025: Nielsen. Online at: http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/FMCG-market-in-rural-India-to-touch-100-bn-by-2025-Nielsen/articleshow/6983123.cms

4) Reckitt Benckiser. 2011. Commerical Break. Online at: http://www.rb.com/Our-brands/Commercial-break/

5) Mintel. 2010. Mintel reveals consumer packaged goods trends for 2011. Online at: http://www.mintel.com/press-centre/press-releases/619/mintel-reveals-consumer-packaged-goods-trends-for-2011

6) Mintel as referenced by Packaging Online. 2010. 12 CPG Trends for 2011. Online at: http://www.packaging-online.com/box-biz/news/12-cpg-trends-2011-12774

7) Freeman, F. 2010. Andrew Freeman & Co. reveals 2011 hospitality trends. Online at:http://www.hospitalityworldnetwork.com/operations/andrew-freeman-co-reveals-2011-trend-list-hospitality-9415

Contact us

If you would like to know more about our FMCG sector expertise, please contact us at
fmcg@ibtpartners.com
for additional information.