Prepared foods and household goods to help drive Indian FMCG growth: EIU & Mintel Study

For the first time, economic forecaster The Economist Intelligence Unit has teamed up with Mintel, the consumer market expert to predict key trends for the future of different Fast Moving Consumer Goods (FMCG) categories in emerging markets, including India.

 

Launched today, the findings are revealed in the paper, ’Convergence with Divergence’, which analyses how household spending in China, India, Mexico, Turkey and South Africa will change in comparison to the USA and UK over the next three years. Providing an in-depth picture of micro and macro trends, the report reveals that Consumer spending in these emerging markets is expected to grow between 7.7% and 15.2% a year between 2013 and 2016 – with India growing by over 13%.

While the world’s developed economies are still dealing with the fallout from the banking crisis of 2008, many emerging markets have seen incomes rise significantly, providing significant growth opportunities for FMCG businesses looking to enter new markets. Each market continues to differ and a need for businesses to understand their market remains integral.

 

Peter Ayton, Global Consumer Analyst at Mintel commented, “The collaboration with The EIU allowed us to look at both the micro and macro-economic trends providing a more accurate prediction for businesses looking to explore new and emerging markets for their products. In India, we expect to see growth in household products – with fierce brand loyalty to those companies that have invested in the wide scale distribution systems needed to reach India’s smaller towns. Furthermore, strong future growth can come from the replacement of traditional, regional dishes with packaged national products.  Breakfast products provide a good example: chapattis or dosas now have to compete with cornflakes, with the latter having the added benefit of a longer shelf life suited for the bottlenecks in the Indian distribution system.”

"In India we expect total expenditure to grow around 12%. There will be a mixed bag across the categories – while beauty and personal care will remain strong, food service remains stagnant and the clothing market remains volatile. Understanding the trends – and opportunities in the market is essential for any businesses looking to invest in India in the next three years”, said Jon Copestake, Retail and Consumer Goods Analyst, at the Economist Intelligence Unit. "Our collaboration with Mintel shows that underlying priorities have significant effects on purchases made."

In summary, key findings for each of the other markets analysed is as follows:

  • South Africans are acquiring more expensive tastes in drinks and coffee is expected to see an annual growth of 8.8% a year
  • Turkey is experiencing a growth in sun cream as cultural changes mean more people are willing to sunbathe in public
  • In the UK chocolates and other cheap treats are proving popular – particularly individually wrapped branded sweets
  • The US is seeing a growth in its soft drinks market, along with the alcohol market – which has grown strongly by 3.2% a year on average between 2009 – 2012
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