Press information
Emma Molton
Camargue
020 7636 7366
emolton@camarguepr.com
30 October 2014
FMCG SECTOR SLOWS BY $8.3 BILLION
AS EMERGING MARKETS COOL

China’s FMCG growth has fallen by a third in the past two years

Brazilian FMCG consumption pattern facing a turning point

Kantar Worldpanel forecasts further slowdown in the growth of the FMCG market over
the next 12 months to 7.0%
New research released today by Kantar Worldpanel reveals that growth in consumer FMCG* spend in
emerging markets has slowed significantly from 8.8% in the 12 months to June 2013, to 7.5% in the
corresponding time period ending June 2014 – equivalent to $8.3 billion of lost growth – demonstrating
the effect of a cooling in the global economy. The research also forecasts a further reduction by June
2015 to 7.0%.
The drop is largely driven by a slowdown of consumption in Asia where FMCG growth is now at 5.2%,
down 3.6 percentage points compared with last year – some $15 billion. The contraction was felt
acutely in China where FMCG growth has fallen by a third in the past two years from 15.8%, in the 12
months ending June 2012, to 5.6% in the period ending June 2014. Latin America is now growing at
13.0%, versus 8.7% last year. While in some countries, including Ecuador and Colombia, this is
driven by underlying growth in demand, in others it is the result of rising inflation.
Although still performing strongly compared with mature markets in Europe and North America, the
reduction in emerging market growth is significant. Jason Yu, Managing Director at Kantar
Worldpanel China, explains: “Slowing economic growth across many emerging economies has led to
shoppers reining in their spending on everyday goods. We now face a new reality where FMCG
growth is more moderate. Competition will become fiercer as the size of the prize shrinks. Brands will
need to be even smarter when deciding which markets to target and when developing their approach
within each country.
“China makes up 69% of the emerging Asian market and influences the whole region. Packaged food
is the largest element of Chinese consumers’ budgets and sales have been particularly affected by the
overall slowdown, growing by just 1.8% compared with 16.0% in the 12 months ending June 2012.
China´s FMCG momentum will resurge when growth on packaged food spending recovers.”
Latin America’s FMCG growth has accelerated to 13.0% in the 12 months up to June this year, and is
forecast to end 2014 at 14.2%. The region’s growth has been driven mainly by Brazil, which accounts
for 42% of FMCG consumption. In the past decade, lower and middle income households in Brazil
have been able to afford goods that were previously out of their reach. More recently, however, rising
inflation has led to consumers becoming savvier and looking for ways to make the most of their
household expenditure. Inflation has a strong impact in the region’s growth – Latin America’s FMCG
demand in volume has only grown 2.8% in the 12 months ending June 2014.
Marcos Calliari, Managing Director at Kantar Worldpanel Brazil continues: “Inflation has not been
restricted to FMCG and has been impacting the cost of other products and sectors like automotive,
real estate, leisure, durable goods, and dining out as consumers decide to balance their budgets by
staying in. FMCG consumption in Brazil is not an exception, and is now facing a turning point. Despite
the rising inflation, demand peaked during the first quarter of 2014. Three months later, consumers
have moderated their consumption. Today, the amount of products in baskets is the same as last
year, but they cost more. Brands that can help Brazilians to keep a balance in their expenditure in the
coming months will be those with a higher chance of success.”
Opportunities for growth
Despite the slowdown in emerging market growth in general, there are still countries in which FMCG
sales are performing strongly. Indonesia is one such example. Although growth in Indonesia remains
high at 15.0%, it is down by 3.6 percentage points when compared to the 12 months ending June
2013. Consumer confidence in this 250 million population country is high, with GDP forecast by the
International Monetary Fund (IMF) to grow by 5.8%1 next year. Brands that have launched new
products in Indonesia this year have taken advantage of consumer appetites to try new goods.
Shoppers in rural areas in particular now have more disposable income and are being attracted to
spend on more consumer products. India has also accelerated its FMCG growth from 3.1% to 6.0%
which is particularly important due to the size of this market.
The top categories and channels
Ecommerce in emerging markets is an increasingly important channel and should be a prime target for
brands. It is performing ahead of the market in Taiwan and China while South Korea2 is the worldleader in FMCG ecommerce with over half of all shoppers buying online. Chinese ecommerce is
forecast to account for 3.3% of all FMCG sales by 2016 and this trend will continue as investment in
technology and infrastructure spreads across the region. Certain categories within the consumer
1
International Monetary Fund, World Economic Outlook Report, April 2014
For more information on global ecommerce, please visit:
www.kantarworldpanel.com/global/News/Accelerating-the-Growth-of-Ecommerce-in-FMCG
2
goods market are still posting strong growth. Beverages, for example, are growing the fastest of any
product category – 10.0% in Asia and 8.0% in Latin America. Personal care products are also
performing well in both Asia and Latin America as consumers with higher spending power start to buy
into these non-discretionary categories.
Jason Yu concludes: “Growth in emerging markets is still generally quite high but certain areas are
slowing. Brands need to understand these changing consumption patterns, tailor their strategies to
specific markets and ultimately take advantage of the opportunities that still exist.”
*FMCG – Fast Moving Consumer Goods: otherwise known as consumer packaged goods (CPG),
these are products that are sold quickly and at relatively low cost. Examples include non-durable
goods such as packaged food and drink, toiletries, and other consumables.
More data is available in Kantar Worldpanel’s Q2 “Emerging Markets FMCG Outlook” report. The full
report can be viewed HERE.
ENDS
For further information, please contact:
Peter Rogers / Emma Molton
Camargue
+44 (0) 20 7636 7366
progers@camarguepr.com / emolton@camarguepr.com
About the study
This study is based on the research extracted from the Kantar Worldpanel global consumer panel. Kantar Worldpanel tracks
shopping behaviour in 60 countries through a sample of 450,000 shoppers worldwide that provide exhaustive and continuous
information of their shopper behaviour. This study covers shoppers in Argentina, Brazil, Bolivia, Chile, Urban China, Colombia,
Central America, Ecuador, India, Indonesia, Malaysia, Mexico, Peru Philippines, Saudi Arabia, South Korea, Taiwan, Thailand,
Venezuela and Vietnam.
All figures refer to 12 month periods ending June. Please note that fresh produce is excluded from the definition of FMCG.
About Kantar Worldpanel
Kantar Worldpanel is the world leader in consumer knowledge and insights based on continuous consumer panels. Its High
Definition Inspiration™ approach combines market monitoring, advanced analytics and tailored market research solutions that
inspire successful actions by its clients.
Kantar Worldpanel’s expertise about what people buy or use – and why – is recognised by brand owners, retailers, market
analysts and government organisations globally.
With over 60 years’ experience, a team of 3,500, and services covering 60 countries directly or through partners, Kantar
Worldpanel helps brands grow in fields as diverse as FMCG, impulse products, fashion, baby, telecommunications and
entertainment, among many others.
For further information, please visit us at www.kantarworldpanel.com.
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About Kantar
Kantar is the data investment management division of WPP and one of the world's largest insight, information and consultancy
groups. By connecting the diverse talents of its 12 specialist companies, the group aims to become the pre-eminent provider of
compelling and inspirational insights for the global business community. Its 27,000 employees work across 100 countries and
across the whole spectrum of research and consultancy disciplines, enabling the group to offer clients business insights at every
point of the consumer cycle. The group’s services are employed by over half of the Fortune Top 500 companies.
For further information, please visit us at www.kantar.com
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FMCG Growth in Emerging Countries
Value
12 months
ending
June 2013
12 months
ending
June 2014
8.8
7.5
Total Asia
Indonesia
Vietnam
India
Thailand
China
Saudi Arabia
Taiwan
Korea
Malaysia
Philippines
8.8
18.6
11.9
3.1
10.6
9.3
6.0
9.4
4.2
4.5
6.8
5.2
15.0
7.9
6.0
5.7
5.6
2.1
1.5
1.3
0.6
-1.8
Total Latin America
Venezuela
Argentina
Brazil
Bolivia
Ecuador
Colombia
Mexico
Chile
Peru
Central America
Source: Kantar Worldpanel
8.7
25.5
28.3
8.4
13.0
2.5
-1.0
4.6
2.6
7.5
2.8
13.0
52.1
33.0
15.1
8.9
5.8
3.6
3.3
2.7
2.2
0.7
Total Emerging Markets