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This artwork was created using Nielsen data.
Copyright © 2020 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
FMCG GROWTH SNAPSHOTQ4’19, FULL YEAR 2019 REVIEW AND Q1’2020 OUTLOOK
21st January 2020
Delhi
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AGENDA
QUARTER
REVIEW
OUTLOOK
2020
FULL YEAR
REVIEW
Nielsen FMCG Quarterly Snapshot – Q4’19
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7.56.9
5.34.5
3.8
76.5
4.84.6
8.4
0.2
2.51.6
0.2
2.73.2
4.5
1.3
4.9
-1.1 -4.3 -3.8
1.8
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19
IIP Growth %
Inflation (CPI)
Source: Secondary Data (Trading Economics, IMF Forecast); Nielsen Data Science South Asia
GDP Growth %
8.1 8
76.6
5.8
54.5
Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19
4.6 4.8
3.9
2.6 2.5
3.13.5
5.8
Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4`19
4.65.5
7.3
OCT'19 NOV'19 DEC'19
MACRO-ECONOMIC TRENDS
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8.7% 8.3%
13.2%11.9%
9.9%
6.2%3.9% 3.5%
2.7%2.3%
3.0%3.8%
3.6%
3.8%
3.4%3.1%
11.4%10.6%
16.2% 15.7%
13.4%
10.0%
7.3%6.6%
13.6%
10.3%
7.9%7.3%
Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419
10.5%
5.8%
3.0%
3.4%
13.5%
9.2%
9.7%
2018 2019
Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19All India U+R || FMCG
FMCG SLOWDOWN ARRESTED IN Q4’19
Volume Growth Price Led Growth Value Growth Val Gr (Including E-Commerce)
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Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
DECODING Q4’19 PERFORMANCE
TREND WITHIN
CHANNELS
RURAL Vs URBAN ZONAL PLAY
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DECODING Q4’19 PERFORMANCE
TREND WITHIN
CHANNELS
RURAL Vs URBAN ZONAL PLAY
Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
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Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19 All India U+R
MODERN TRADE & E-COMM HELP SUSTAIN OVERALL GROWTH
7.9%
12.1%
9.1%
5.8%5.1%
1.2%
1.2%
0.8%
1.3%1.4%
0.6%
0.3%
0.5%
0.8%0.9%
2019 Q1'19 Q2'19 Q3'19 Q4'19
TT MT E-Comm Val Gr (Ecomm Inc)
9.7%
13.6%
10.3%
7.9%7.3%
Contribution to FMCG Growth by Channels 2019 Value Growth vs 2018
2019 Q1’19 Q2’19 Q3’19 Q4’19
9% 14% 10% 7% 6%
12% 12% 8% 13% 15%
44% 28% 37% 52% 53%
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Nielsen FMCG Quarterly Snapshot – Q4’19
DECODING Q4’19 PERFORMANCE
TREND WITHIN
CHANNELS
RURAL Vs URBAN ZONAL PLAY
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12%
10%
6%
3.9% 3.5%
10%9%
6%5.4%
4.6%
14%
11%
6%
1.8% 2.1%
4%
4%
4%
3.4%3.1%
4%
3%
3%
3.0%2.8%
4%
4%
4%
3.4% 3.1%
16%
13%
10%
7.3%6.6%
14%
12%
10%
8.4%
7.4%
18%
15%
10%
5.3% 5.2%
Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19
Volume Growth Price Led Growth Value Growth
ALL INDIA (U+R) (100%*)
Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
ALL INDIA (URBAN) (64%) ALL INDIA (RURAL) (36%)
RURAL IS STABLE AT LOW GROWTH LEVELS WHILE URBAN IS
DECELERATING
*Nos. in brackets indicate value contribution to FMCG
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Nielsen FMCG Quarterly Snapshot – Q4’19
DECODING Q4’19 PERFORMANCE
TREND WITHIN
CHANNELS
RURAL Vs URBAN ZONAL PLAY
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15%
11%
6%
1.2% 1.6%
11% 11%
7%
3.7% 4.1%
11%
9%
5%
2.7%1.1%
10%9%
8%9.0% 8.3%
4%
4%
5%
4.5% 4.2%
4% 4%
3%
1.9% 1.6%
4%
4%
3%
3.6%
3.5%
3%
2%3%
2.7%
2.1%
19%
15%
10%
5.7% 5.8%
15% 15%
10%
5.6% 5.6%
15%
12%
8%
6.3%
4.6%
13%
11% 11%11.7%
10.4%
Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19
Volume Growth Price Led Growth Value Growth
NORTH (30%*)
Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
EAST (21%) WEST (24%) SOUTH (25%)
WEST ZONE CONTINUES TO DIP WHILE OTHER ZONES
STABILISE
*Nos. in brackets indicate value contribution to FMCG
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TN
GUJ
MAH
ASM
BIH
JHR WB
ORR
J&K
HP
UTRHAR
MP
PJB
RAJ
AP + TEL
KAR
DELHI
UP
NE
EXCESS
NORMAL
DEFICIT
RAINFALL IN Q3 2019
Period: Jun-Sep’19
Source: District Level Rainfall Data SANDARP
EXCESS RAINFALL AND RISING UNEMPLOYMENT IMPACTING
WEST ZONE
4.0 4.04.8
5.6 5.56.2
6.8 6.97.4 7.6
7.9
0
2
4
6
8
10
12
14
Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19
East West North South All India
UNEMPLOYMENT RATE
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12%
9%
6%
1.5%
-0.4%
8% 7%
3%
13.0%
15.1%
4%
4%
3%
3.4%
3.4%
4%
3%
1%
2.1%
1.1%
16%
13%
9%
4.9%
2.9%
12%
10%
3%
15.1%
16.2%
Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19
Volume Growth Price Led Growth Value Growth
10%9%
6%4.1%
1.5%
14%
9%
5%
0.6% 0.4%
4%
3%
3%
3.3%
3.6%
5%
4%
4%
3.2% 3.1%
14%
12%
8%7.5%
5.1%
18%
14%
9%
3.7% 3.5%
Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19
Volume Growth Price Led Growth Value Growth
WEST URBAN (68%)
Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
WEST RURAL (32%)WEST GT (87*) WEST MT (13%)
*Nos. in brackets indicate value contribution to West FMCG
GENERAL TRADE MOST IMPACTED WHILE MODERN TRADE
POSITIVE FOR WEST ZONE
West rural maintains low growth levels while West urban
continues to slowdown.
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Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
FULL YEAR 2019 REVIEW
RURAL DRIVING
SLOWER GROWTHDIVERGING TREND
WITHIN ZONES
SMALL PLAYERS
LOSING ADVANTAGE
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Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
FULL YEAR 2019 REVIEW
RURAL DRIVING
SLOWER GROWTHDIVERGING TREND
WITHIN ZONES
SMALL PLAYERS
LOSING ADVANTAGE
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10.5%
5.8%
8.8%
6.4%
13.0%
5.0%
3.0%
3.4%
3.2%
3.1%
3.3%
3.8%
13.5%
9.2%
12.0%
9.4%
16.2%
8.8%
2018 2019 2018 2019 2018 2019
Volume Growth Price Led Growth Value Growth
ALL INDIA (U+R) (100%*)
Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
ALL INDIA (URBAN) (64%) ALL INDIA (RURAL) (36%)
SLOWER GROWTH IN 2019 LED BY RURAL
The above no’s are excluding e-commerce
*Nos. in brackets indicate value contribution to FMCG
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Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
FULL YEAR 2019 REVIEW
RURAL DRIVING
SLOWER GROWTHDIVERGING TREND
WITHIN ZONES
SMALL PLAYERS
LOSING ADVANTAGE
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13.5%
4.6%
9.1%
6.2%
10.3%
4.4%
8.2% 8.4%
2.9%
4.4%
3.4%
2.7%
4.0%
3.4%
2.0%2.6%
16.3%
9.0%
12.5%
8.9%
14.3%
7.8%
10.3%11.0%
2018 2019 2018 2019 2018 2019 2018 2019
Volume Growth Price Led Growth Value Growth
NORTH (30%*)
Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
EAST (21%) WEST (24%) SOUTH (25%)
*Nos. in brackets indicate value contribution to FMCG
NORTH & WEST MOST AFFECTED; SOUTH SUSTAINS
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Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
FULL YEAR 2019 REVIEW
RURAL DRIVING
SLOWER GROWTHDIVERGING TREND
WITHIN ZONES
SMALL PLAYERS
LOSING ADVANTAGE
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FMCG 9.2%
11.3%
16.4%
19.0%
2019
Large>600 crs
#64
Medium100 – 600 Crs
#221
Small<100 crs
# 40,310
Categorization of manufacturers done on 2019 sales value at all India
9.2%
9.0%
9.2%
2018
SMALL PLAYERS LED GROWTH SLOWDOWN
66%
14%
20%
13.5%Contribution
All India : Value Growth
Contribution to
slowdown
32%
24%
45%
Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
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DRIVEN BY FEWER NEW ENTRANTS AND DECLINING
DISTRIBUTION
2017 2018 2019
7.4K7.7K
6K
4.6K4.2K 5.5K
36.6K
40.1 K 40.6 K
ENTRY vs YA EXIT vs YATOTAL MANUFACTURERS
NUMBER OF MANUFACTURERS
1.5%
4.9%
7.2%7.8%
0.5%
3.0%
1.0%
-4.2%
FMCG Large Medium Small
2018 2019
DISTRIBUTION EXPANSION TREND*
Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19 Categorization of manufacturers done on 2019 sales value at all India
* Includes only the manufacturers that existed in both 2018 and 2019
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14K
# OF NEW LAUNCHES
25 Lakhs
AVERAGE SIZE IN LAUNCH YEAR
AI U+R
Number of innovations Growth in Innovations
2018 2019 2019
Large 484 422 -13%
Medium 303 206 -32%
Small 18.5K 13.8K -25%
28 Lakhs
Average Size of innovations
in launch year
2018 2019
401 L 356 L
108 L 116 L
14 L 16 L
-25%
AND SIGNIFICANT SLOWDOWN IN INNOVATIONS
Source: Nielsen RMS
Nielsen FMCG Quarterly Snapshot – Q4’19
19K2018
2019
Categorization of manufacturers done on 2019 sales value at all India
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Nielsen FMCG Quarterly Snapshot – Q4’19
OUTLOOK 2020
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INDUSTRIAL PRODUCTION %
Source: Secondary Data; Nielsen Data Science South Asia
2020 OUTLOOK: HEADWINDS & TAILWINDS
FOREIGN INVESTMENT
FINANCIAL STIMULUS
• India's rank has improved to 63rd this year
from 77th last year in World bank's ease of
doing business .
• Proposal to allow 100% investment in railway
operations, education and rental housing
management companies.
• GDP touches sub 5% in Q3 2019.
• Expected to go down further in Q4 2019 before
recovering and being stable in the range of 5% -
5.5% in 2020.
• 100k Cr long term infrastructure stimulus
• 3rd and the final instalment for the year of
Pradhan Mantri Kisan Samman Nidhi
accounting to over 12,000Cr released
INFLATIONGDP PLUNGE
• In-stability in global landscape with trade war and
escalation of tensions between countries in
middle east has created a non conducive
environment for growth
VOLATILE GLOBAL
2.0 2.6 2.9 3.0 3.1 3.2 3.2 3.3 4.0 4.6 5.57.4 7.5 6.9 6.7
6.0 6.8 7.7 8.1 8.0 7.0 6.6 5.8 5.0 4.5 4.2 5.1
6.64.5 5.1 5.8 6.1 5.3 5.9
4.4
3.7
Q1`18 Q3`18 Q1`19 Q3`19 Q1'20
FISCAL DEFICIT%
• Increased possibility of government
breaching 3.3% fiscal deficit target because of
corporate tax rate cut and reduced GST
collections
• Inflation expected to come down from Feb
2020 but still hover in the range of 5.5%
FY 2019
5
• Unseasonal and above average rainfall coupled
with late withdrawal of monsoon has a bearing on
growth levels
RAINFALL IMPACT
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9% - 10%JAN – DEC 2019
Q4’19
6.5% - 7.5%
Forecast
13.8%
Actual
9-10% 9.7%vs.
PREDICTED ACTUAL
FMCG GROWTH EXPECTED TO SUSTAIN IN THE 9%-10%
RANGE IN 2020
Source:;Nielsen Data Science South Asia, Secondary data.
7.4%#
2019 Q1’20
8% - 9%
Includes Ecommerce (Nielsen FMCG Categories)#Dec’19 Ecommerce number estimated
9.7%# 9-10%
2020
26Copyr
ight
© 2
020 T
he N
iels
en C
om
pan
y (
US
), L
LC
. C
onfidential
and p
roprieta
ry.
Do n
ot
dis
trib
ute
.
SUMMARY
FMCG slowdown arrested in Q4’19,
driven by all zones, except West
Modern Trade and E-Comm
help sustain overall growth
Small players impacted more while
large players holding on
Growth rates expected to
sustain in 2020
Significant slowdown in Innovations in 2019
led by mid and small players
Q4 2019
OUTLOOK 2020
FULL YEAR 2019
This artwork was created using Nielsen data.
Copyright © 2020 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
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