FMCG (Fast Moving Consumer Good) sector is one of the fastest growing sectors in the world. It is the fourth largest sector in the Indian Economy. It mainly consists of food and beverage, health care and household and personal care. CRISIL rating indicates high percentage revenue growth from 2021 to 2022 in this sector in India. Profitability can be high by reducing cost. Cost reduction is possible by choosing proper sustainability investment in the FMCG sector.
The concept of sustainability has been associated with various aspects all over the world with its known association with economic, environment, human, and social life. In a simple way, we can say sustainability in the environment can be preserved if we can satisfy our needs using available resources without generating a situation of unavailability of resources for our next generation’s requirement.
Retail consumers of all age groups have evolved over the period and have become very conscious, started showing their concerns for sustainable packaging and other areas. The sustainability goals have been given importance by almost all FMCG companies on the globe. FMCG sectors have started focussing on sustainable packaging, sourcing, protecting environment, plant-based alternatives and usage of energy too. FMCG giants like Hindustan Unilever, ITC Limited, Nestle, Dabur and other companies have realised the need and decided their own sustainability goals. These goals help these giants to grow further by addressing the concerns shown by consumers and others in society. Young people prefer to join companies if the employer follows sustainability in their actions and shows interest for society. They prefer eco-friendly products too. Investors do consider the same point before taking an investment decision in any FMCG companies. It is noticed that many celebrities agree to be part of promotional activities of FMCG companies, having sustainability objectives in their strategy. These objectives can be fulfilled with a clear plan of action and involving all stakeholders. Covid 19 has reminded us the importance of sustainability and drawn the attention of individuals, business and government with an alarming note for preserving resources for a better tomorrow. Growth in e-commerce business during this pandemic is observed in every part of the world. Demand for packaging material have gone up, companies took initiatives to use recycling material for packaging.
According to Kantar report published in September 2020, Sustainability could bring $382 billion to FMCG brands. This report also highlights that one in five shoppers say that since the pandemic began, they have acquired more environmentally friendly habits.
Though FMCG companies are facing a lot of challenges, they are exposed to several opportunities too. Companies have started exploring opportunities related to sustainability, focussing on environment protection, economic comfort and social welfare of people in general. Majority of start-ups are green start-ups. The green product portfolio will help them to grow in the near future and will show them a long-term path. Big companies have brought sustainable solutions in product and services not only for cities and towns but penetrated in rural parts too. For example, HUL in India has created an awareness of hygiene and sanitation among consumers and also empowered the rural women and men with a purpose and livelihood through – Project Shakti.
It is expected strategies taken by FMCG on sustainability will help them to deliver better experience and value to customers at a much faster rate, if implemented effectively. Implementation is possible with proper planning, setting target level, having a framework, assessing the progress and maintaining transparency. Finally, the sustainability strategy of FMCG will pay off, bring profitability and create a better world with innovation and technological development.
About the Author
Dr. Swati Basu Ghose has more than 25 years of teaching, research and industry experience. She is currently working as HoD in The Department of Marketing and IB in Ramaiah Institute of Management. Previously she has worked with several other academic organizations like NIILM, ISME, IBMR and Anderson School of Management in University of California, Los Angeles, USA. Dr. Basu Ghose has visited and interacted with members of faculty in UK and US. She has presented her research papers in several national and international conferences and published research papers in Management Journals. She has attended NABC – Business Forum 2017 in Santa Clara, USA. She is a recognized PhD guide in Ramaiah Institute of Applied Sciences and Research Centre of RIM for University of Mysore. She has conducted FDP on Marketing Case Studies, reviewed books, reviewed conference papers, moderated panel discussions, chaired session at IIM-C conference, played role as external moderator(evaluation) in Ramaiah University of Applied Sciences, delivered lectures at webinars and invited as resource person for certificate courses on Entrepreneurship Development. Currently she is working and developing on case studies related to women entrepreneurs.