FAST-MOVING CONSUMER GOODS (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     5th June 2024        
output themes

Context: Shares of fast moving consumer goods (FMCG) companies are trading higher by up to 5 per cent amid heavy volumes in otherwise a weak market on expectation of healthy outlook.

Fast-Moving Consumer Goods (FMCG)

  • About: Also known as Consumer Packaged Goods (CPG), are products sold quickly and at a relatively low cost.
  • Factors: Population growth, urbanization, rising disposable incomes, technological advancements, and changing consumer
  • Characteristics of the FMCG Industry: The FMCG industry is characterized by high-volume sales, quick inventory turnover, and various products catering to consumer needs.
  • Range of Products: These goods include essential everyday items such as food and beverages, toiletries, cleaning supplies, and other low-cost household items.
  • Importance of FMCG in the Economy: The FMCG industry is a vital component of the global economy, contributing significantly to a country's Gross Domestic Product (GDP) and job creation.
  • Generating Demand: FMCG generates demand for a range of products and services, further stimulating economic activity and growth.

FMCG Industry in India

  • About: The FMCG sector is the fourth-largest sector in the Indian economy.
  • Urban vs. Rural Contribution: In 2022, the urban sector accounted for 65% of the overall annual FMCG sales, while rural India contributed over 35%.
  • Product Category Breakdown: Household and personal care products make up 50% of the industry’s sales, healthcare claims 31-32%, and food and beverage products account for the remaining 18-19%.
  • Employment Statistics: It provides employment to around 3 million people, accounting for approximately 5% of the total factory employment in India.