Name:

Darsh Talati

Application no.: 69186 MOP Section: B

Program Name: PGDM (Finance)

FMCG INDUSTRY
DEFINITION:
Fast Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) Are products that are sold quickly and at relatively low cost The absolute profit made on FMCG products is relatively small, they generally sell in large quantities, so the cumulative profit on such products can be substantial FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, teeth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, light bulbs, batteries, paper products and plastic goods.[1] FMCG may also include pharmaceuticals, consumer electronics, packaged food products and drinks, although these are often categorized separately. FMCG products are generally replaced or fully used up over a short period, usually a few days or weeks, or months, but within one year. This contrasts with with durable goods or major appliances such as kitchen appliances, which are generally replaced over a period of several years. In Britain, "white goods" in FMCG refers to large household electronic items such as refrigerators. Smaller items such as TV sets and stereo systems are sometimes termed "brown goods. FMCG have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly. Some FMCGs such as meat, fruits and vegetables, dairy products and baked goods are highly perishable. Other goods such as alcohol, toiletries, pre-packaged foods, soft drinks and cleaning products have high turnover rates.

HISTORY
Hindustan Unilever Limited
Hindustan Unilever Limited (HUL) is Indias largest Fast Moving Consumer Goods Companies with a heritage of 75years and touches the lives of two out of three Indians. HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength of over 16,500 employees and contributes to indirect employment of over 65,000 people. The company was renamed in June 2007 as Hindustan Unilever Limited. Lever Brothers started its actual operations in India in the summer of 1888, when crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers" were shipped to the Kolkata harbour and it began an era of marketing branded Fast Moving Consumer Goods (FMCG). In the summer of 1888, visitors to the Kolkata harbour noticed crates full of sunlight soap bars, embossed with words written as Made In England by Lever Brothers. With this began an Era of marketing branded Fast Moving Consumer Goods (FMCG) Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. As per Nielsen market research data, two out of three Indians use HUL products. The Unilever Foundation is partnering with five leading global organisations- Oxfam, PSI, Save the Children, UNICEF, and the World Food Programme.

Imperial Tobacco Company of India Limited

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. As the Company's ownership progressively Indianised, the name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of the Company's multibusiness portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education & Stationery and Personal Care - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'. The Companys beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company. In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India. Bhadrachalam Paperboards amalgamated with the Company effective March 13, 2002 and became a Division of the Company, Bhadrachalam Paperboards Division.

TOP 5 Global FMCG COMPANIES

PROCTER & GAMBLE

William Procter, a candlemaker, and James Glamble, a soapmaker, emigrated from England and Ireland respectively. They settled in Cincinnati initially and met when they married sisters, Olivia and Elizabeth Norris. Alexander Norris, their father-in-law, called a meeting in which he persuaded his new sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, Procter & Gamble was born. In 18581859, sales reached $1 million. By this point, approximately 80 employees worked for Procter & Gamble. During the American Civil War, the company won contracts to supply the Union Army with soap and candles. In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble's products. P&G is leading company in Fast Moving Consumer Market (FMCG) globally in terms of sales.as of 2011. P&G does this through the products and services it offers, manufacturing in an environmentally responsible manner, and through its social responsibility programs that improve lives for those in need around the world. We define sustainability broadly at P&G to include both environmental sustainability and social responsibility. In May 2011 Fortune editor-at-large Patricia Sellers praised P&G's board diversity, as five of the company's eleven current directors are female and have all been on Fortune's annual Most Powerful Women list. Procter & Gamble is a member of the U.S. Global Leadership Coalition, a Washington, D.C.-based coalition of over 400 major companies and NGOs that advocates for a larger International Affairs Budget, which funds American diplomatic and development efforts abroad.

The annual sales of the company, Operating cash flow and the market share of different segments of company (in sales) is mentioned below:

Net Sales ($ billions)

2012 2010 2008 2006 2004 64.4 72.4 79.3 76.7 78.9 As you can see the Net Sales of the company is showing the constant rise during the past six years. Net Sales ($ billions)

Operating cash flow($ billions)

2011 2010 2009 2008 2007 2006 2005 2004 11.4 13.4 15 14.9 16.1 Also the operating cash flow is growing constantly which shows sales has increased during past six years

Operating cash flow($ billions)

2010 Net Sales

Beauty & Groming Wealth & Well being Household Care This Pie chart shows us the share of the sales of different segments of P&G during the year 2010

Nestle
The company dates to 1867 when two separate Swiss enterprises were founded that would later form the core of Nestl. In the succeeding decades, the two competing enterprises aggressively expanded their businesses throughout Europe and the United States. In August 1867 Charles (US consul in Switzerland) and George Page, two brothers from Lee County, Illinois, USA, established the Anglo-Swiss Condensed Milk Company in Cham, Switzerland. Their first British operation was opened at Chippenham, Wiltshire, in 1873.[11] In September 1867 in Vevey, Henri Nestl developed a milk-based baby food, and soon began marketing it. The following year saw Daniel Peter begin seven years of work perfecting his invention, the milk chocolate manufacturing process. Nestl's was the crucial cooperation that Peter needed to solve the problem of removing all the water from the milk added to his chocolate and thus preventing the product from developing mildew. Henri Nestl retired in 1875 but the company under new ownership retained his name as Socit Farine Lacte Henri Nestl. The end of World War II was the beginning of a dynamic phase for Nestl. Growth accelerated and companies were acquired. In 1947 came the merger with Maggi, a well-known manufacturer of seasonings and soups. Crosse & Blackwell followed in 1950, as did Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in L'Oral in 1974. In 1977, Nestl made its second venture outside the food industry, by acquiring Alcon Laboratories Inc. Nestls objectives are to be recognised as the world leader in Nutrition, Health and Wellness, trusted by all its stakeholders, and to be the reference for financial performance in its industry. Nestle has also been through and is still going through joint ventures with different companies. Nestles Joint ventures have been successful till now. For Example: 1. Nestle with Colgate-Palmolive 2. Nestle with The Coca Cola Company 3. Nestle with Snow Brand Milk Products. 4. Nestle with Indofood (Indonesia) 5. Nestle with Groupo Modelo

Nestles Annual Report

In Millions and CHF
Sales Trading operating Profit As %of sales Net Profit As % of sales Operating Cash flow Free Cash Flow Capital Expenditure As % of sales

2011
83642.00 12538.00 15.0% 9487.00 11.3% 9763.00 4491.00 4779.00 5.7%

Kraft Foods & Cadbury

The firm now known as Kraft Foods has its origin as National Dairy pie Products Corporation, formed on December 10, 1923, by Thomas H. McInnerney. Through acquisitions it expanded into a full range of dairy products. By 1930 it was the largest dairy company in the United States and the world, exceeding Borden. McInnerney operated the Hydrox Corporation, an ice cream company located in Chicago, Illinois. In 1923 he went to Wall Street to convince investment bankers there to finance his scheme for consolidating the United States ice cream industry. He initially found "hard sledding" with one banker saying the dairy industry "lacked dignity." He persevered and convinced a consortium including Goldman Sachs and Lehman Brothers to finance a roll-up strategy. Born in Stevensville, Ontario, Canada in 1874, James L. Kraft immigrated to the United States in 1903 and started a wholesale door-to-door cheese business in Chicago; its first year of operations was "dismal", losing US$3,000 and a horse. However, the business took hold and Kraft was joined by his four brothers to form J.L. Kraft and Bros. Company in 1909. As early as 1911, circulars and advertisements were in use by the company. Purchase of Cadbury On September 7, 2009, Kraft made a 10.2 billion takeover offer for the long-established British confectionery group Cadbury, makers of Dairy Milk and Bournville chocolate. On November 9, 2009 Kraft's 9.8bn takeover bid was rejected by Cadbury. Cadbury stated that the takeover bid was a "derisory" offer. Kraft renewed the offer under the same terms on December 4, 2009. The offer generated significant political and public opposition in the United Kingdom and abroad, even leading to calls for the government to implement a policy of economic protectionism in cases of takeovers of large companies. On January 19, 2010, Cadbury finally approved a revised offer from Kraft, valuing the confectionery business at $19.5 billion (11.5 billion). The funding for the takeover was partially provided by the Royal Bank of Scotland, the British part-state-owned bank.

THE COCA COLA COMPANY

The prototype Coca-Cola recipe was formulated at the Eagle Drug and Chemical Company, a drugstore in Columbus, Georgia, by John Pemberton, originally as a coca wine called Pemberton's French Wine Coca. He may have been inspired by the formidable success of Vin Mariani, a European coca wine. Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the United States since March 27, 1944). As per my knowledge Turnover of COCA COLA in the first year of its business was around 3oo bottles. This shows us the companies determination to get big in the market. The present situation of the company gives us the answer.

Coca-Cola has been criticized for alleged adverse health effects, its aggressive marketing to children, exploitative labor practices, high levels of pesticides in its products, building plants in Nazi Germany which employed slave labor, environmental destruction, monopolistic business practices, and hiring paramilitary units to murder trade union leaders.

Anheuser-Busch
The brewery which would become Anheuser-Busch was purchased on the brink of bankruptcy by Eberhard Anheuser, a prosperous German-born soap manufacturer, in 1860. Adolphus Busch, Anheusers son-in-law, joined E. Anheuser & Co. in 1864, becoming partner in 1869. Adolphus became president when Anheuser died in 1880, and the company then became Anheuser-Busch Brewing Association. The Busch family would be in full control of the company through the generations until Anheuser-Busch's sale to InBev in 2008. Anheuser-Busch is the largest company in selling brewery in terms of sales. Anheuser-Busch's best known beers include brands such as Budweiser, Busch, Michelob, Bud Light, Bud Light Platinum, and Natural Light. The company also produces more than 100 beers, import beers, specialty beers, nonalcoholic brews, malt liquors ( such as King Cobra and Hurricane), and flavored malt beverages (e.g. the Bacardi Silver family and Tequiza). As of July 2009, the #1 bestselling beer in America is Bud Light. Anheuser-Busch has many equity investments in terms of: 50.2% of Grupo Modelo in Mexico 7% of Tsingtao Brewery Company Ltd. in China 34% of craft beer Redhook Ale Brewery 40% of Widmer Brothers Brewery 99.77% of Harbin Brewery

Top 2 Indian FMCG Companies

Hindustan Unilever Limited

Hindustan Unilever Limited (HUL) is Indias largest Fast Moving Consumer Goods Companies with a heritage of 75years and touches the lives of two out of three Indians. HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength of over 16,500 employees and contributes to indirect employment of over 65,000 people. The company was renamed in June 2007 as Hindustan Unilever Limited. Hindustan Unilever Limited (HUL) is India's largest consumer goods company based in Mumbai, Maharashtra. It is owned by the British-Dutch company Unilever which controls 52% majority stake in HUL. Its products include foods, beverages, cleaning agents and personal care products. HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength of over 16,500 employees. and contributes to indirect employment of over 65,000 people. The company was renamed in June 2007 as Hindustan Unilever Limited. HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. Seventeen of HULs brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2011). The company also happens to have the highest number of brands in this list, with six brands featuring in the top 15 list. HUL has also been concentrating on many health and hygiene approach. Many Unilever brands offer hygiene benefits but none more so than our toilet soaps. Every year, diarrhoea and pneumonia claim the lives of over 2 million children under five.

Dabur
Dabur was established in 1884 by visionary endeavour by Dr. S. K. Burman, a physician tucked away in Bengal. His mission was to provide effective and affordable cure for ordinary people in far-flung villages. With missionary zeal and fervour. 1st Production unit was established at Gharia in 1896. Dabur identifies nature-based Ayurvedic medicines as its area of specialisation. It is the first Company to provide health care through scientifically tested and automated production of formulations based on our traditional science in early 1990s. Dabur's Health Care range brings for you a wide selection of Ayurvedic and natural products that offer complete care for varying individual needs. Our products are derived from the time-tested heritage of Ayurveda, and backed by the most modern scientific test & trials that ensure unfailing quality and safety .
is India's largest Ayurvedic medicine manufacturer. Dabur's Ayurvedic Specialities Division has over 260 medicines for treating a range of ailments and body conditions-from common cold to chronic paralysis.Dabur International, a fully owned subsidairy of Dabur India, has sold its stake in UAE based Weikfield International on 25 June 2012.

Reference: http://www.wikipedia.org/ http://www.hul.co.in/ http://www.itcportal.com/ http://www.dabur.com/default.aspx http://www.pg.com/en_IN/ http://snacks.kraftfoodscompany.com/welcome.aspx http://www.thecoca-colacompany.com/ http://www.anheuser-busch.com/s/ http://www.nestle.in/