FMCG is a growing industry, with small profits, but large business volumes. The industry has kept on maturing each year with different trends and better approaches. Many companies came into the industry, stayed for a bit, and then left for good. This industry has touched many peaks but has experienced pitfalls too – a rough ride it has been for sure, but we have only come forward.
FMCG mostly include basic need products of the masses, but due to the immense competition, there are now a great number of complexities for businesses in the FMCG market if they are to sustain any semblance of competitive advantage. To keep the people enticed, innovation is necessary. People want change; they do not wish to keep spending on the same thing again and again. So, either you improvise, or you lose the market.
Recent years have brought some major twists and turns to the FMCG industry; let’s take at what 2016 has in store.
Tobacco
Tobacco is a heavily consumed product all over the world. The competition in this industry is high, and the impact on the economy is also considerable. This year seems to be a fine year for the tobacco, and a profitable closing is forecasted. An increase of almost 4 to 5% in operating profits is expected.
However, sales volumes may suffer if e-cigarettes sales shoot up. Recently introduced health policies may be a factor that could potentially cause e-cigarette sales to increase. Other than the e-cigarette sales, the pricing of tobacco remains favorable.
Food and Ingredients
Food is a basic necessity; therefore, the demand always remains high. But the quality is always debatable for the consumers. The ongoing issue of genetic engineering in the food industry can mean a serious setback for the food business in 2016 as many companies have decided to go for it.
GMOs (genetically modified organisms) foods and ingredients are no different from the regular food products and are safe to consume, having been approved by the FDA. Approval of GMOs has given a good chance for the new bees in the industry to prosper as it is highly cost efficient.
But, still, there is a chance of sales numbers falling as people may not consume GMOs for fear of health concerns, as is the case with any new technology in the food industry.
The acceptance of genetic engineering in food can harm the business of organic food suppliers and farmers. The cost effective process of engineering may cause their sales to reduce by a great percentage.
In the end, it all depends on the quality, if the quality of the organic food is proving to be better than GMOs, people will surely agree to pay more.
Beverages
Beverage consumption has increased greatly over the past years. Every year, many new beverages are introduced in the market – some products are preferred some are not.
2016 is also going to witness the launch of some new and maybe better beverage items. Bullish trends are forecasted this year, and the overall market value is expected to increase. The pioneers in the industry may suffer a bit because of the entrants, but the year will still turn out to be profitable.
Fashion
As for the fashion industry, not much change is expected. This year is favorable and stable, or so it seems at this point. Retailers may face a bit of fluctuation in the sales, but nothing serious. However, e-commerce is expected to gain exceptional volume in sales.
The impact of foreign-exchange may slow down operating income growth.
