FMCG: How the top five companies get their strategies right

Of the 20 fastest-growing fast-moving consumer goods companies, the top five posted a 28% growth in value against 18% registered by the bottom five. So, how did they get things right?

A Nielsen study “Delivering Consumer Clarity” by Justin Sargent lists key factors — distribution, volume-price mix, innovation and employing modern trade channels — that differentiate high performers from the rest.


Quality of Distribution as Important as Quantity

The top 5 focused on expansion in their core markets rather than by experimenting in new ones. This allowed them to achieve higher growth in revenue-per-store as distribution grew.

Balancing Volume and Pricing Growth

Restraint on pricing in spite of the economic volatility helped the top fi ve companies drive signifi cant volumes in the category.

Innovation: Timing it Right

The top five were more willing to experiment with new offerings in existing & new categories. They outperformed the bottom fi ve in terms of the share contributed by new launches in 2011 and 2012. However, the percentages are still fairly low by world standards, indicating there is more opportunity for Indian companies that can really focus on innovation.

Growing with Modern Trade

The top five companies drew more of their sales from modern trade than the bottom fi ve while simultaneously achieving slightly more growth from this channel Sales through modern trade channels as percentage of total value sales & growth.

“Strong brands can succeed even in a volatile market... It’s important for cos to realise that quality of distribution is as important as quantity of distribution for higher growth- Justin Sargent, MD – Consumer, Nielsen India.