FMCG Industry

How FMCG companies have adapted to recent supply chain challenges and kept their ability to attract consumers whilst remaining relatively low-cost within the retail market.

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What is the FMCG Industry (Fast-Moving Consumer Goods)?

Fast-Moving Consumer Goods (FMCG) are nondurable products that are sold quickly and at a relatively low cost. These products are consumed or replaced frequently, and they tend to have a high turnover rate.

FMCG companies operate in a dynamic and highly competitive market. They focus on producing and distributing products that meet the day-to-day needs of consumers. The key characteristics of FMCG products are their affordability, high-volume sales, and quick turnover. Due to their perishable nature or rapid consumption, FMCG products need to be replenished frequently to avoid loss of sales opportunities.

The FMCG industry relies heavily on effective supply chain management and distribution networks to ensure that products are readily available to consumers. FMCG companies often invest in marketing and branding strategies to attract consumers and build brand loyalty. They also prioritise customer experience, sustainability, and e-commerce to stay competitive in the market.

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Types of Fast-Moving Consumer Goods

Food: Perishable and non-perishable food items that are consumed daily, such as fruits, vegetables, dairy products, grains, and packaged snacks.
Soft Drinks: Non-carbonated beverages, including sodas, juices, energy drinks, and bottled water.
Toiletries: Personal care products used for hygiene and grooming, such as soaps, shampoos, toothpaste, deodorants, and skincare items.
Over-the-counter Pharmaceuticals: Non-prescription drugs and healthcare products, such as pain relievers, cold medicines, vitamins, and first aid items.
Household Goods: Items used in households, including cleaning products, detergents, paper products, kitchen supplies, and home accessories.

Top FMCG companies and brands

Procter & Gamble (P&G): Procter & Gamble is one of the world’s largest FMCG companies, known for its wide range of consumer products. Some of their popular brands include Pampers, Tide, Gillette, and Crest. P&G focuses on innovation, brand building, and delivering superior quality products to meet consumer needs.
Unilever: Unilever is a global FMCG company with a diverse portfolio of brands across various categories. Their well-known brands include Dove, Lipton, Knorr, and Hellmann’s.
Nestlé: Nestlé is a leading FMCG company specialising in food and beverages. They offer a wide range of products, including Nescafé, KitKat, Maggi, and Purina. Nestlé focuses on nutrition, health, and wellness, and their products cater to different consumer preferences and dietary needs.
The Coca-Cola Company: The Coca-Cola Company is a renowned FMCG company known for its iconic beverage brands like Coca-Cola, Sprite, and Fanta. They have a strong global presence and are committed to providing refreshing and enjoyable experiences to consumers.
PepsiCo: PepsiCo is a multinational FMCG company that offers a diverse range of food and beverage brands. Their portfolio includes Pepsi, Lay’s, Gatorade, Quaker, and Tropicana. PepsiCo focuses on delivering sustainable growth and providing products that meet changing consumer preferences.

FMCG Trends

Prioritising Sustainability

Sustainable practices are one of the most significant emerging trends within FMCG.

In both the UK and worldwide, consumers are becoming increasingly aware of their consumption’s impact on the environment. This means that they are increasingly looking for consumer goods produced sustainably by companies that ensure their environmental impact is kept to a minimum.

This is especially true of younger consumers, who will often seek out the most sustainable options for fast-moving consumer goods to keep their lifestyles as green as possible, meaning that this trend will continue to grow going forward.

As sustainability becomes more important to consumers, the best fast-moving consumer goods manufacturers are changing the way they package and sell their products. They are using more compostable, recyclable, and reusable materials, as well as more cruelty-free, vegan ingredients in their consumer goods. This is harder for some sectors, such as over-the-counter drugs, but for the most part, FMCG manufacturers can boost sustainability at relatively low costs to the company.

Expansion into e-commerce

The COVID-19 pandemic drove an already booming e-commerce industry. Using e-commerce was essential for brand resilience, which helped FMCG sales remain strong.

Even after the uncertainty of lockdown, e-commerce is essential within the industry because it allows for a direct connection between the manufacturer and the consumer. This connection can lead to increased FMCG sales and brand loyalty, and overall helps boost organic growth. Additionally, e-commerce can help reduce the costs associated with traditional marketing and distribution channels.

Expanding into online sales can even help increase a manufacturer’s market share.

Increased focus on customer experience

Top FMCG manufacturers are improving their customers’ experience to build brand loyalty and maximise their profits. E-commerce and sustainability play a part in this, too, since manufacturers are doing this by making it easier for customers to find information about their products online and promoting their CSR efforts.

Additionally, many FMCG manufacturers are choosing to implement new technologies such as chatbots and online reward schemes, working to improve customer service and create loyalty programs that keep customers coming back.

FMCG Products

The FMCG sector comprises many services, including FMCG manufacturing, distributing and retailing. Within the retail industry, FMCG are products that are typically bought frequently by consumers – essentially moving from the retailer to the consumer very rapidly, hence the sector name. Products within this industry tend to be high-volume, but low-cost items.

Common product categories within the industry include food, soft drinks, confectionery, toiletries, over-the-counter pharmaceuticals and household goods. The products within these categories move quickly off the shelf, so replenishing is key for both the manufacturer and retailers to avoid loss of sales opportunities and ROI.

Challenges facing the FMCG industry

Several challenges continue to impact companies within the FMCG sector, for instance; new technologies, multi-channel consumers, the effect of online review platforms and recommendations, and consumers’ desire to “shop around” to secure the best deals.

Moreover, new products and sectors emerge within the FMCG market regularly, and consumers themselves change too. They no longer accept brands at face value and are instead challenging FMCG manufacturers to continue delivering exciting new products at a faster pace. Consumers now have access to a huge wealth of information and are essentially inundated with choices when making purchases, putting significant power in their hands.

As such, FMCG players that want to stay ahead of their competition and take advantage of opportunities must gain a deeper understanding of the latest market trends, purchasing behaviour and consumer demands.

With intense competition and slim profit margins, FMCG companies face the challenge of maximising unit sales to thrive in the industry. Key challenges in this sector include:

Implementing effective marketing strategies to attract consumers and maintain product quality while keeping costs low.
Extending the shelf life of perishable goods to minimise product expiry and reduce waste.
Embracing sustainable practices through innovative packaging solutions and environmentally friendly product offerings.
Harnessing technological advancements to streamline operations and drive down production costs.

To succeed in the FMCG industry, companies must navigate these challenges and adapt to evolving consumer demands and market trends.

FMCG retail research

Consumer preferences and behaviours change quickly, which is why independent, third-party agencies are important in acting as objective overseers to assess the situation. Assosia specialises in providing relevant, timely data regarding consumer trends and the factors which are currently impacting purchasing behaviour in the FMCG industry.

We understand that one of the biggest aims for companies within this industry is to make sure their brands include the type of products that consumers will want to purchase. Additionally, they are concerned with ensuring that such products are available through various retail channels so that products can be widely distributed.

We utilise a range of quantitative and qualitative techniques, both in-store and online to adhere to client objectives and provide powerful, actionable insights. All of our research studies are designed according to specific category parameters, as well as taking into consideration the client’s particular research objectives. We are highly skilled in helping FMCG companies identify business opportunities and create solid strategies to remain competitive with our pricing tool.

With a wealth of experience, Assosia holds preferred global supplier status for some of the largest FMCG companies in the world, providing a wide range of services to this sector. We are proud to declare that we consistently over-achieve on all our SLAs and targets set by us and our partners.