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ABSTRACT
Fast moving consumer goods (FMCG) companies are pulling out all the stops in their drive to improve off take of premium products. As consumers cut back spends, companies are redrawing their strategies to keep shopper interest alive in premium and discretionary categories - segments that have borne the brunt of the slowdown. FMCG stocks are a safe bet in the current volatile market conditions as the consumption demand remains strong. The early onset of monsoon has raised hopes of greater rural consumption and improvement in the general sentiment. The forthcoming Lok Sabha election will also pump lot of extra cash into the economy, boosting consumption. FMCG companies are making all-out efforts to expand their reach in the interiors of the country. They are also launching new products and widening their portfolios. However, all FMCG makers are not on the same footing. Investors need to consider the size and nature of their product portfolio, pricing power and intensity of competition before zeroing on companies for investment. The key challenge facing FMCG companies in India is finding the balance between pursuing this breakout opportunity, presented by the consuming middle class, while managing costs in an increasingly volatile environment. Many such activities are examined in this article for the purpose to understand the changing scenario of FMCG in the recession and strategies for the future with the help of secondary data.
Keywords: FMCG; Consumption; Investment; Product Portfolio; Uncertainty; Challenges etc.
INTRODUCTION
The current growth rates in comparison to the last few quarters on an overall basis are relatively lower. As per industry estimates, the volume growth of the FMCG industry during the quarter hovered around 9%, which means it has lost some ground from the low double-digit growth levels it achieved a couple of years ago. Volatility is like second nature to the stock markets. But there are times when volatility is all that some one sees in the markets. This is what is happening now. In addition to developing the right value proposition for consumers, the focus needs to be on developing a profitable business model that will deliver sustainable growth. In the volatile environment, increasing prices in line with inflation will not be sufficient to compensate for inflated cash requirements for working capital...