HEINZ INDIA

FMCG INDIA

Worth over Rs 1300 billion Relatively recession proof sector Food products -nearly 45% of the industry size Rural sales Rs 650 billion and growth rate 18% (2008)

FOOD INDUSTRY IN INDIA

US$ 200 billion Food processing industry will contribute upto 50% by 2015 Highly fragmented Unorganized sector-75% of the industry. Packaged food highest growth rate(E) Rs 310 billion(09-10) Revenue 2.9% of the Indian food industry

FMCG TRENDS

Premiumisation

This trend will see consumers moving up the price ladder in search of additional functionality or brand promise The rising income of Indian consumers has accelerated this trend. Their improved purchasing power is supported by greater workforce participation among women and an increasingly younger earning population with higher consumer willingness to spend. The rich are willing to buy premium products for their exclusive feel and value. The upper middle class wants to emulate the rich, and trade up towards higher priced products. As per estimates the rich will grow to approximately 30 mn in 2020 and the upper middle class will grow to about 70 mn.

Shift towards evolved products

Category evolution is primarily observed among upper middle and lower middle income classes. They account for 150 mn people currently and their size is expected to increase to about 500 mn in 2020. They increasingly want and desire sophisticated products which suit individual needs. For example products which improve their appearance and are good for health. Consumers are demanding customized products. Microsegmentation for product development and masscustomization for identifying different product variants is already underway. Better paying jobs and exposure to fashion and beauty trends through television and other media have resulted in changing tastes and choices.

Increasing value at the bottom of the pyramid

Companies can increase value at the bottom of the pyramid by serving products customized to specifically meet the requirements of the large market BOP consumers are those who earn less than Rs 2 lakh per annum per household. This group currently constitutes about 900-950 million people in India. Unlike the middle class segment which is urban, well served and competitive, the BOP markets are largely rural, poorly served and uncompetitive. As a result of rising incomes, the Rural FMCG market growth is 18% and exceeds that of the Urban markets at 12% Products such as packaged foods which had no demand in the rural markets earlier have suddenly started establishing a presence.

KEY FACTORS OF GROWTH

KEY PLAYERS

HEINZ - PRODUCTS AND MARKET SHARE

Products Heinz Tomato Ketchup Complan Glucon D Sampriti Nycil

MARKET SHARE
The Rs-900 crore plus Heinz India competes with HUL, Nestle and GSK. According to the year ending 2010, Complan has a market share of 15.7% in the milk drinks segment. Glucon-D has a market share of 62% in the glucose drinks segment. Nycil has a market share of 36.8% in the prickly heat and skin care segment. Heinz Tomato Ketchup has a market share of 6.6%.