Indian FMCG: Recent industry interaction:: Edelweiss

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 We recently attended the Confederation of Indian Industry (CII) FMCG Forum 2010 – The Game Changers in New Delhi and met several listed and un-listed companies, FMCG distributors, media and government stakeholders in FMCG. Also, to get deeper insights into Rural issues, Edelweiss commissioned a study across five states, 15 districts, 200 villages, and 1,989 rural households.

       We highlight some of the key messages from these interactions in this report      

• FMCG Demand – FMCG market growth is a multi-year theme
• Cost inflation – Cost inflation inherent; FMCG companies strategy is to partially absorb inflation (and limit price increases) to increase customer base
• Supply chain – Companies to use Organised Retail and Technology to derive supply chain efficiencies and offset cost inflation

       We met Cadbury (I), Bharti Wal-mart, ITC (Foods), P&G (I), Agro Tech Foods, Timex, Dabur, GSK Consumer, NCAER Centre for Macro Consumer Research, O&M, Mart, Jasper Innovative Marketing Solutions, Volunteer – UID, Future Group and Director of the Centre of Environmental Education.

       Our interactions attest our long term bull thesis on Indian FMCG market. Our top picks currently are ITC, HUL, Dabur, GCPL and United Spirits