Execu ve summary Source: World Bank, CRISIL, Nielsen Report, News Ar cles 1.5 1.6 1.8 1.9 2.

1 1.9
0.0 0.5 1.0 1.5 2.0 2.5 2015 2016 2017 2018 2019 2020 110.0 615.87 0 100 200 300 400 500 600 700
2020A 2027F FMCG market in India (US$ billion) Final consump on expenditure (US$ trillion) ▪ The
FMCG sector in India expanded due to consumer-driven growth and higher product prices, especially
for essen al goods. ▪ FMCG market reached US$ 56.8 billion as of December 2022. ▪ Total revenue of
FMCG market is expected to grow at a CAGR of 27.9% through 2021 to 2027, reaching nearly US$
615.87 billion. ▪ In 2022, urban segment contributed 65% whereas rural India contributed more than
35% to the overall annual FMCG sales. ▪ Good harvest, government spending expected to aid rural
demand recovery in FY24. ▪ The sector had grown 8.5% in revenues and 2.5% in volumes last fiscal
year. ▪ In the January-June period of 2022, the sector witnessed value growth of about 8.4% on
account of price hikes due to infla onary pressures ▪ In Q2, CY22, the FMCG sector clocked a value
growth of 10.9% Y-o  Y — higher than the 6% Y-o-Y value growth seen in Q1. ▪ India includes 780
million internet users, where an average Indian person spends around 7.3 hours per day on their
smartphone, one of the highest in the world. ▪ Resilience needs to be the key factor in the
manufacturing process, daily opera ons, retail and logis c channels, consumer insights and
communica on that will help FMCG companies to withstand the test of me and create more value
for consumers in the long run. CAGR 27.9% CAGR 5.2% 4 Advantage India 5 Advantage India
ADVANTAGE INDIA 1 4 2 3 ► Indian food processing market size reached US $ 307 . 2 trillion in 2022
and is expected to reach US $ 547 . 3 trillion by 2028 , exhibi ng a growth rate (CAGR) of 9 . 5 %
during 2023 - 2028 . ► Digital adver sing will grow at 14.75 % CAGR to reach Rs . 35 ,809 crore (US $
4 . 3 billion) by 2023 , with FMCG industry being the biggest contributor at 42 % share of the total
digital spend . 1. Growing demand ► Entrepreneurs interested in se ng up food -related FMCG
industry can setup their processing units in the government -designated agro - processing clusters,
which help cut down the plant setup costs. ► With the advent of online retail and e-commerce,
FMCG businesses are able to market and sell their products across the country without inves ng
much in marke ng ac vi es. 4. A rac ve opportuni es ► In January 2023 , ITC has announced
plans to acquire 100 % of Sproutlife Foods, a D 2 C startup and parent company of health food brand
'Yoga Bar' over a period of three to four years . ► In December 2022 , Hindustan Unilever Limited
announced its foray into the ‘Health & Wellbeing’ category through strategic investments in Zywie
Ventures Private Limited (“OZiva”) and Nutri onalab Private Limited (“Wellbeing Nutri on”) . 2.
Higher investments ► Union Budget 2023 -24 has allocated US $ 976 million for PLI schemes that
aims to reduce import costs, improve the cost compe veness of domes cally produced goods,
increase domes c capacity, and promote exports. ► Union budget 2023 -24 focuses on reviving rural
demand by boos ng disposable income, alloca on to farms and higher fund alloca on on rural
infrastructure, connec vity, and mobility to create long -term jobs. 3. Policy support Source: News
Ar cles 6 Market Overview 7 Evolu on of FMCG in India ▪ FMCG sector provides employment to
around 3 million people accoun ng for approximately 5% of the total factory employment in India. ▪
FMCG sales in the country was expected to grow 7-9% by revenues in 2022- 23. ▪ The key growth
drivers for the sector includes favourable Government ini a ves & policies, growing rural market and
youth popula on, new branded products, and growth of e-commerce pla orms. ▪ Number of ac ve
internet users in India will increase to 900 million by 2025 from 622 million in 2020. ▪ In 2021, India’s
consumer spending was US$ 1,891.90 billion. ▪ Indian villages, which contribute more than 35% to
overall annual FMCG sales, are crucial for overall revival of the sector. ▪ E-commerce now accounts
for 17% of the overall FMCG consump on among evolved buyers, who are affluent and make
average spends of about Rs. 5,620 (US$ 68). 2022 Forecast ▪ FMCG market reached US$ 56.8 billion
as of December 2022. ▪ FMCG companies posted 7.4% rise in sales in 2022, primary led by price
hikes. ▪ Total revenue of FMCG market is expected to grow at a CAGR of 27.9% through 2021 to 2027,
reaching nearly US$ 615.87 billion. Source: Dabur Annual Report, Economic Times, CII, News Ar cles
8 Three main segments of FMCG Source: Economic Times, News Ar cles F&B Healthcare Household
and personal care ▪ Food and beverage sector is one of the essen al components of the FMCG
market, which accounts for about 3% of its GDP. ▪ In 2021, food and beverages accounted for 30% of
total household spending in the country. ▪ For 51% of Indians, spending on healthcare products
increased in the 12 months to August 2021 ▪ Covid-19 pandemic has driven Indian consumers to
focus their spending priori es on healthcare. ▪ Personal and household care category in FMCG sector
grew from 32% in 2019 to 40% in 2020 ▪ Indian households spent nearly Rs. 47 Lakh crore (US$ 60
billion) on FCMG, in the year ending February 2021. FMCG 9 ▪ The FMCG sector’s revenue reached
Rs. 4.7 lakh crore (US$ 56.8 billion) as of December 2022. ▪ FMCG sales in the country is expected to
grow 7-9% by revenues in 2022-23. ▪ FMCG industry has grown by 10.9% in the quarter ending June
2022, versus 6% in the previous quarter. ▪ The sector had grown 8.5% in revenues and 2.5% in
volumes last fiscal year. ▪ In the January-June period of 2022, the sector witnessed value growth of
about 8.4% on account of price hikes due to infla onary pressures ▪ Consump on in urban markets
sustained at 1.2% during the September 2022 quarter as compared to 0.6% in the in the quarter
ended June 2022. ▪ Rural households play an important role, contribu ng 35-36% In India’s FMCG
market. ▪ Small manufacturers (apart from Top 400 players or manufacturers with less than US$ 13.6
million (Rs 112 crore) o ake this year) are driving consump on and witnessed a posi ve volume
growth of 0.5% in Q3’22. ▪ Total revenue of FMCG market is expected to grow at a CAGR of 27.9%
through 2021 to 2027, reaching nearly US$ 615.87 billion. 49.0 52.8 68.4 83.3 110.0 56.8 0 20 40 60
80 100 120 2016 2017 2018 2019 2020 2022* Note: * - As of December 2022 Source: Dabur, AC
Nielsen, Nielsen India, CRISIL Ra ngs, News Ar cles, Economic Times Strong growth in Indian FMCG
sector Trends in FMCG revenues over the years (US$ billion) 10 Urban market accounts for major
chunk of revenues Source: Winning in India’s Retail Sector, CRISIL report, Nielsen India, News Ar cles,
Economic Times ▪ Accoun ng for a revenue share of around 65%, urban segment is the largest
contributor to the overall revenue generated by the FMCG sector in India in 2022. ▪ India's villages
contributed more than 35% to overall annual FMCG sales in 2022. ▪ In Q2, CY22, the FMCG sector
clocked a value growth of 10.9% year-on-year — higher than the 6 per cent y-o-y value growth seen
in Q1. Urban markets clocked a posi ve volume growth of 0.6%. ▪ Good seasonal harvests, resul ng
in improved liquidity in the hands of farmers, higher government spending on infra, and the wedding
season are aiding consumer sen ment in India's villages. ▪ Dabur India derived about 47% of its sales
from rural India, and it is stepping up direct distribu on to cover more than 100,000 villages as
demand starts recovering in rural areas. ▪ Rural markets contribute about 45% to Emami's annual
sales. ▪ Nestle India plans to expand its reach to 1,20,000 villages by the end of 2024. ▪ In 2022, the
month of November saw rural volumes growing 6-7%, compared to 2-3% in the previous two
quarters. ▪ Good harvest, government spending expected to aid rural demand recovery in FY24. 65%
35% Urban Rural Urban - Rural industry Breakup in 2022 11