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Report on How AI is Driving Market TransformationThe FMCG market size is forecast to increase by USD 456.6 billion at a CAGR of 3.27% between 2023 and 2028. The market is experiencing significant growth, driven by several key trends and challenges. The increasing preference for e-commerce and online retail platforms is transforming the distribution landscape, with consumer electronics and pet care segments witnessing substantial growth. Urban populations are fueling the demand for ready-to-eat food products, while the lack of proper infrastructure in emerging economies poses a challenge. Supermarkets and hypermarkets continue to dominate the offline retail space, but e-commerce platforms are gaining traction, particularly in urban areas. Rural markets, however, remain underserved, presenting an opportunity for growth. The adoption of technology and digitalization is also transforming the FMCG industry, with companies leveraging data analytics and automation to improve supply chain efficiency and enhance customer experience.
Overall, the market is poised for growth, with e-commerce, urbanization, and consumer preferences shaping the future of the industry.
The Fast-Moving Consumer Goods (FMCG) market, encompassing food and beverages, healthcare, toiletries, oral hygiene products, detergent, cosmetics, and home care categories, is witnessing significant growth due to changing lifestyles and increasing health consciousness among consumers. The middle-class population's expanding purchasing power and dual-income families' rise are major drivers. In the food and beverages sector, packaged foods are gaining popularity due to their convenience and longer shelf life. Healthcare and cleansing products are in high demand as consumers prioritize health and hygiene. The toiletries and cosmetics segments are witnessing a shift towards natural and organic products as consumers seek green alternatives.
In the healthcare sector, home care products catering to aging populations and those with chronic conditions are experiencing growth. Online shopping and e-commerce platforms have disrupted traditional FMCG distribution networks, offering consumers greater convenience and access to a wider range of products. However, the rise of counterfeit brands poses a challenge to market players, requiring anti-counterfeit measures. Overall, the market is poised for continued growth, driven by lifestyle changes, health-consciousness, and technological advancements.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The food and beverage segment is estimated to witness significant growth during the forecast period. The Food and Consumer Goods (FMCG) market experienced significant growth in 2023, primarily driven by the expanding middle-class population and economic progress in both developed and developing countries. This economic advancement led to increased disposable income levels, resulting in heightened demand for packaged and processed foods. In response, food processing and packaging solutions have seen expansion. Manufacturers have adopted strategies to differentiate their products in a competitive market, with a focus on frozen foods and packaged beverages. Urbanization has influenced dietary habits, leading to a preference for convenient, packaged, and frozen food items among the global urbanized population. However, challenges such as inflation, raw materials price fluctuations, and counterfeiting of products pose significant hurdles for market growth.
Moreover, the trend towards sustainable shopping practices is gaining momentum in semi-urban and rural areas, adding another dimension to the evolving market landscape. Online purchasing has also emerged as a popular trend, offering consumers greater convenience and access to a wider range of products.
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The food and beverage segment accounted for USD 1,202.10 billion in 2018 and showed a gradual increase during the forecast period.
APAC is estimated to contribute 43% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The middle-class population expansion and economic progress in the Asia Pacific (APAC) region have significantly influenced the market. Factors such as inflation and rising raw materials prices pose challenges, but the increasing urbanization and changing consumer preferences in semi-urban and rural areas continue to drive demand. Countries like China, India, Japan, South Korea, Indonesia, Singapore, and Australia are major revenue generators in the FMCG sector. The retail and manufacturing industries are thriving, with companies in China, India, Japan, South Korea, Australia, and Indonesia focusing on promotional campaigns to attract customers. In the context of evolving consumer behavior, there is a growing trend towards sustainable product shopping and online purchasing.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Growing preference for e-commerce online distribution is the key driver of the market. The Food and Beverages, Healthcare, Toiletries, Oral Hygiene products, Detergents, Cosmetics, and Home care sectors under the market have experienced significant growth due to the increasing popularity of e-commerce platforms. Consumers' changing lifestyles and the convenience of online shopping have led to a rise in the preference for purchasing FMCG products through e-commerce channels. The availability of a wide range of brands and products, including Packaged foods, on these platforms is a primary reason for this trend. Furthermore, e-commerce platforms offer personalized shopping assistance and product recommendations, enabling consumers to make informed decisions. The increasing usage of smartphones worldwide has fueled the growth of e-commerce companies, providing consumers with easy access to a vast array of FMCG products.
Overall, the online distribution of FMCG products has revolutionized the way consumers shop for their daily essentials.
Rising consumption of ready-to-eat food products is the upcoming trend in the market. The Food and Beverages sector, including packaged foods, Healthcare, Toiletries, Oral hygiene products, Detergents, Cosmetics, and Home care, is witnessing significant growth due to changing lifestyles and the increasing demand for convenience. Ready-to-cook and ready-to-eat food products have gained popularity, especially in dual-income households and among individuals with hectic schedules. According to a 2022 report by Standard Process Inc., processed foods accounted for almost 70% of the American diet. The pandemic in 2020 further accelerated this trend, with a rise in demand for these products as people worked from home and countries implemented lockdowns. Blinkit, an Indian online grocery store, reported a 17% increase in sales of ready-to-eat food products, a 31% increase in readymade meals and mixes, and a 41% increase in frozen food during the same period.
These figures underscore the sudden shift in consumer preferences towards convenience and time-saving options.
The lack of proper infrastructure in emerging economies is a key challenge affecting market growth. The Food and Beverages, Healthcare, Toiletries, Oral Hygiene products, Detergents, and Cosmetics sectors under the Fast-Moving Consumer Goods (FMCG) market are experiencing significant growth in emerging economies, particularly in the Asia Pacific (APAC) region. This expansion is driven by several factors, including improving economic conditions, urbanization, and increasing health consciousness. The burgeoning food processing industries in these regions further fuel the demand for FMCG products. However, despite the high demand, APAC faces infrastructure challenges in storing and manufacturing food processing ingredients such as preservatives, emulsifiers, enzymes, and others. Proper handling and care, including maintaining specific temperatures and preventing contamination, are crucial to preserve the chemical composition of these ingredients.
This infrastructure gap poses challenges for FMCG manufacturers and suppliers in the region.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ITC Ltd. - The company offers FMCG product such as cigarettes, cigars, and AASHIRWAD atta.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The Fast-Moving Consumer Goods (FMCG) market is witnessing significant growth due to changing lifestyles and the increasing middle-class population in both urban and semi-urban and rural areas. Economic progress and inflation have led to an increase in demand for food and beverages, healthcare, toiletries, oral hygiene products, detergent, cosmetics, and other cleansing products. The urban sector is a major contributor to the market, with urban consumers showing a preference for packaged foods, consumer electronics, pet care, and online purchasing through e-commerce platforms and third-party websites. The semi-urban and rural populations are also adopting FMCG products, driven by increasing health-consciousness, dual-income families, and the availability of affordable options.
Further, the rise of modern retail formats, such as supermarkets and hypermarkets, and online retail platforms, has disrupted traditional retail channels, leading to price wars and intense competition. Raw materials prices and inflation are key challenges for FMCG companies, along with counterfeiting of products and the need to offer sustainable, natural, and plant-based options to meet the changing consumer preferences. The use of mobile apps, subscription services, and in-house or contract-based production have become essential strategies for companies to stay competitive in the market. Overall, the market is expected to continue its growth trajectory, driven by urbanization, lifestyle changes, and the increasing adoption of online shopping.
Market Scope |
|
Report Coverage |
Details |
Page number |
149 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 3.27% |
Market Growth 2024-2028 |
USD 456.6 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
3.13 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 43% |
Key countries |
China, US, India, Russia, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Anheuser Busch InBev SA NV, Dabur India Ltd., Heineken NV, ITC Ltd., JBS SA, Johnson and Johnson Services Inc., Kellogg Co., Keurig Dr Pepper Inc., Kimberly Clark Corp., LOreal SA, Mondelez International Inc., Nestle SA, Patanjali Ayurved Ltd., PepsiCo Inc., Tata Sons Pvt. Ltd., The Coca Cola Co., The Kraft Heinz Co., The Procter and Gamble Co., The Wadia Group, and Unilever PLC |
Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
With the growing adoption of AI across industries, Technavio has analyzed its impact on FMCG market driven by the most dynamic and competitive sectors, driven by rapid consumer demand and constant innovation. AI is playing a transformative role in this industry by enhancing operational efficiency, optimizing supply chains, improving customer experiences, and enabling more data-driven decision-making. This analysis delves into AI's impact on the FMCG market, backed by data and real-world examples.
These insights, available exclusively through Technavio, provide an unparalleled significant impact of AI on the FMCG market, backed by real-world examples and data.
The report provides details of AI's impact on various segment
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