PROJECT REPORT
Working of the FMCG Industry in India:
With respect to their Organizational Objectives
INDEX
Introduction
Market Size
Classification of companies by objectives and their profiles
Growth drivers and opportunities in the Indian FMCG industry
Conclusion
1. Introduction
India is a country that no FMCG player can afford to ignore due to its middle-class
population which is larger than the total population of USA. Crucially, with a median age of
just 27, India's population is becoming more consumerist due to rising ambitions.
FMCG sector is India’s fourth-largest sector and has been expanding at a healthy rate over
the years because of rising disposable income, a rising youth population, and rising brand
awareness among consumers. With household and personal care accounting for 50% of
FMCG sales in India, the industry is an important contributor to India’s GDP.
Growing awareness, easier access and changing lifestyles have been the key growth
drivers for the sector. The urban segment (accounts for a revenue share of around 65%) is
the largest contributor to the overall revenue generated by the FMCG sector in India.
However, in the last few years, the FMCG market has grown at a faster pace in rural India
compared to urban India. Semi-urban and rural segments are growing at a rapid pace and
FMCG products account for 50% of the total rural spending.
2. Market Size
Total revenue of FMCG market is expected to grow at a CAGR of 27.9% through 2021-
27, reaching nearly US$ 615.87 billion.
In 2022, urban segment contributed 65% whereas rural India contributed 35% to the
overall annual FMCG sales. Good harvest, government spending expected to aid rural
demand recovery in FY24. The sector had grown 8.5% in revenues and 2.5% in volumes
last fiscal year.
The quick commerce market could reach between Rs. 2,17,200 crore (US$ 25 billion)
and Rs. 4,77,840 crore (US$ 55 billion) by 2030,.
In 2024, India’s consumer spending was Rs. 2,08,51,200 crore (US$ 2.4 trillion) and is
expected to rise to Rs. 3,73,58,400 crore (US$ 4.3 trillion) by 2030.
As per CRISIL, India's dairy industry is projected to experience a healthy revenue
growth of 13-14% in FY25.
Source: Dabur, AC Nielsen, Nielsen India, CRISIL Ratings, News Articles, Economic Times
6. Classification of companies by
objectives and their profiles
Objective type Description
Operate to generate financial returns for
Profit making
shareholders
Operate to serve social and community goals,
Non-Profit making
reinvesting surplus into the mission
1. Hindustan Unilever Ltd (HUL)
HUL is a subsidiary of Unilever, one of the world’s leading manufacturers of Foods &
Refreshment, Home Care, Beauty & Wellbeing and Personal Care products with sales
in over 190 countries.
HUL is India’s largest FMCG company and has served Indian consumers for over 90
years, driven by a belief that ‘What is good for India, is good for HUL’. With a wide and
resilient portfolio and a strong distribution network, they reach 9 out of 10 Indian
households with at least one or more of their brands.
• Objective: Profit-Making
• Founded: 1933
• Products: Soaps, shampoos, tea, detergents
• FY25 Revenue: ₹60,000+ crore
• Highlights: Market leader in personal care and home care segments
2. ITC Ltd
ITC Limited is an Indian conglomerate, headquartered in Kolkata. It has a presence
across six business segments, namely FMCG, agribusiness, information technology,
paper products, and packaging. It generates a plurality of its revenue from tobacco
products.
In terms of market capitalization, ITC is the second-largest FMCG company in India
and the third-largest tobacco company in the world. It employs 36,500 people at more
than 60 locations across India. Its products are available in 6 million retail outlets in
India and exported to 90 countries.
• Objective: Profit-Making
• Founded: 1910
• Products: Packaged foods, personal care, stationery
• FY25 Revenue: ₹70,000+ crore (FMCG segment)
• Highlights: Diversified portfolio, strong rural distribution
Source: Dabur, AC Nielsen, Nielsen India, CRISIL Ratings, News Articles, Economic Times
6. Classification of companies by
objectives and their profiles
3. Amul (Gujarat Cooperative Milk Marketing Federation)
The Anand Milk Union Limited commonly known as Amul is an Indian dairy brand
owned by the cooperative society, Gujarat Cooperative Milk Marketing Federation
(GCMMF), based in Anand, Gujarat. GCMMF is controlled by 3.6 million milk
producers.
Amul spurred India's White Revolution, which made the country the world's largest
producer of milk and milk products, and has since ventured into overseas markets.
• Objective: Non-Profit Cooperative
• Founded: 1946
• Products: Milk, butter, cheese, ice cream
• FY25 Revenue: ₹61,000 crore
• Highlights: Farmer-owned, profits reinvested into rural development
4. Akshaya Patra Foundation
The Akshaya Patra Foundation is an independent charitable trust headquartered in
Bengaluru, Karnataka. The NGO serves as the implementing partner of the
Government of India’s flagship PM POSHAN Abhiyaan, a school meal programme
designed to improve the nutritional status of school-aged children nationwide. It was
earlier known as the ‘National Programme for Mid-Day Meal in Schools’, popularly
known as the Mid-Day Meal (MDM) Scheme.
Akshaya Patra is the largest NGO partner of the Government of India to implement the
PM POSHAN Abhiyaan in government-run schools in India, a collaboration based on
the Public-Private Partnership (PPP) model. It is also one of the largest NGO-run
school feeding programmes in the world.
Since its inception, Akshaya Patra has cumulatively served over 4 billion meals. The
milestone serving of the 4 billionth meal was commemorated at an event held at the
UN Headquarters in New York, United States.
• Objective: Non-Profit (Social FMCG Model)
• Founded: 2000
• Products: Mid-day meals for school children
• FY25 Reach: 2 million+ meals daily
• Highlights: World's largest NGO-run school meal program
Company Objective Type Revenue (₹ Cr) Key Focus
Market leadership, brand
Hindustan Unilever Ltd Profit-Making 60,000+
equity
ITC Ltd Profit-Making 70,000+ Diversification, rural reach
Non-Profit Farmer welfare, dairy
Amul 61,000
Coop innovation
Akshaya Patra Non-Profit
N/A (Donor-funded) Nutrition, education support
Foundation NGO
Source: Dabur, AC Nielsen, Nielsen India, CRISIL Ratings, News Articles, Economic Times
7. Growth drivers and opportunities
in the Indian FMCG industry
1. Shift to organised market
• Consumers in India’s metro cities are increasingly shifting to supermarket
chains, and even ordering their groceries online, prompting the two
organized retail formats accounting for roughly 30% of FMCG sales in the
country’s metro cities.
2. Increase in penetration
• FMCG sector is more lucrative because of low penetration levels, well-
established distribution network, low operating cost, lower per capita
consumption, large consumer base and simple manufacturing processes
for most products resulting in fairly low capital investments. In 2022, UAE
announced to invest US$ 2 billion to develop a series of integrated food
parks across India that will incorporate state-of-the-art climatesmart
technologies to reduce food waste and spoilage, conserve fresh water, and
employ renewable energy sources.
3. Rural consumption
• With increasing disposable income in rural India as well as low penetration
levels, the rural market provides huge growth opportunities for FMCG
players.
• Growth in rural consumption has increased and hence there is an
increased demand for branded products in this huge untapped market.
4. Easy access
• Due to e-commerce's accessibility throughout the nation, whether in rural
or urban areas, there has been a discernible shift in demand. It offers
greater consumer 1 Note: GST: Goods and Services Tax, News Articles
Source: Dabur, Nielsen convenience because customers can easily
choose and buy the products of their choice using apps and websites.
Moreover, the home delivery option will deliver the goods to their homes.
Source: Dabur, AC Nielsen, Nielsen India, CRISIL Ratings, News Articles, Economic Times
7. Growth drivers and opportunities
in the Indian FMCG industry
1. Sourcing base
• FMCG sector has a powerful presence of leading multinational companies,
competition between organized and unorganized players, a robust
distribution network, and low operational cost.
• Majority of global corporations look at India as one of the keys.
• Emerging markets where future growth is more likely to emerge.
2. Penetration
• Post-pandemic, there is a good time for FMCG companies to achieve
household penetration by experimenting while lowering prices, effective
advertising and understanding customer needs.
3. Online FMCG
• Online FMCG market is expected to grow rapidly in the coming years,
driven by the increasing adoption of smartphones and the internet, the
growing popularity of e-commerce platforms, and the availability of a wide
range of products at competitive prices.
4. Rural market
• The Indian rural FMCG market is estimated to reach a valuation of US$ 220
billion by 2025.
• Rural India accounts for more than 40% of consumption in major FMCG
categories such as personal care, fabric care, and hot beverages.
5. Innovative products
• Indian FMCG companies are investing in research and development to
create new and innovative products that cater to the changing needs and
preferences of consumers such as plant-based milk, tofu, nutritional
yeast, etc.
6. Premium products
• Purchase habits of India’s new generation of customers have resulted in a
market attitudinal shift. There will be 370 million Generation Z consumers
in India in 2030, with different preferences. The modern Indian consumer is
defined by a high level of awareness, a passion for health and nutrition,
and a large amount of disposable income. As a result, new FMCG sub-
sectors have emerged, such as air & water purifier and organic food
staples.
Source: Assorted articles and reports, Indian Retailer, Economic Times
8. Conclusion
The Fast-Moving Consumer Goods (FMCG) industry in India is not merely a
commercial sector, it is a reflection of the country’s evolving socio-economic
fabric. From urban supermarkets to rural kirana stores, FMCG products touch
the lives of over a billion people every day, making this industry one of the most
dynamic and impactful in the Indian economy.
This report has explored the operational structure of the FMCG sector through
the lens of four diverse organizations, grouped by their core objectives, profit-
making and non-profit-making. Companies like Hindustan Unilever Ltd and
ITC Ltd exemplify the profit-driven model, focusing on market leadership,
innovation, and shareholder value. In contrast, organizations like Amul, a
cooperative, and the Akshaya Patra Foundation, a non-profit, demonstrate
how large-scale operations can be guided by community welfare, nutritional
equity, and inclusive growth.
What emerges is a compelling narrative: Profit and purpose are not mutually
exclusive. In fact, the coexistence of these models within the same industry
highlights the adaptability and richness of India’s FMCG ecosystem. While
profit-making firms drive innovation, scale, and global competitiveness, non-
profit and cooperative models ensure that the benefits of economic progress
reach the grassroots.
Looking ahead, the FMCG industry is poised for sustained growth, with a
projected market size of US$ 615 billion by 2027. This expansion will be fueled
by rising disposable incomes, digital transformation, rural market penetration,
and a growing preference for health-conscious and sustainable products.
However, the sector must also navigate challenges such as inflation, regulatory
compliance, supply chain disruptions, and shifting consumer behavior.
To thrive in this evolving landscape, FMCG organizations, regardless of their
objectives, must embrace agility, invest in technology, and remain deeply
attuned to the needs of Indian consumers. Whether the goal is profit or public
good, the path forward lies in responsible innovation, inclusive growth, and
unwavering consumer trust. In essence, the FMCG industry is not just about
selling products, it’s about serving people. And in doing so, it plays a vital role
in shaping a healthier, more equitable, and more prosperous India.
Glossary
• FDI: Foreign Direct Investment
• MSP: Minimum Selling Price
• NREGA: National Rural Employment Guarantee Act
• FY: Indian Financial Year (April to March); So, FY09 implies April 2008 to
March 2009
• SEZ: Special Economic Zone
• MoU: Memorandum of Understanding
• Wherever applicable, numbers have been rounded off to the nearest whole
number
Source:
Indian Dairy All India Bread Manufacturers’
Association Association
Indian Soap and Toiletries
Manufacturers’ Association
