Courtesy of Mish.
Citing a need for structural reforms, Paul Polman, CEO of Unilever, the world’s third largest Fast-Moving-ConsumerGoods (FMCG) company says the emerging market slowdown is here to stay.
Before diving into the report on Unilever, let’s take a look at the definition of FMCG corporations.
Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, and grocery items. Though the profit margin made on FMCG products is relatively small, more so for retailers than the producers/suppliers, they are generally sold in large quantities. FMCG is probably the most classic case of low margin/high volume business. Many of the players on the retailer side such as Walmart, Carrefour, Choithram, Tawseel, Sheel, Walgreens or Metro Group and supplier side are among the largest and most recognized global companies.
Fast-moving consumer electronics are a type of FMCG and are typically low priced generic or easily substitutable consumer electronics, including mobile phones, MP3 players, game players, and digital cameras which are of disposable nature.
Global leaders in the FMCG segment include Johnson & Johnson, Colgate-Palmolive, Anheuser-Busch InBev, Henkel, Kellogg’s, S.C. Johnson, Dr Pepper Snapple Group, Beiersdorf, Mars Inc., Heinz, Nestlé, Reckitt Benckiser, Unilever, Procter & Gamble, L’Oréal, The Coca-Cola Company, General Mills Inc., PepsiCo, Mondel?z and Kraft Foods.
Slowdown Here to Stay
Bloomberg reports Emerging Market Slowdown to Last for Years
Unilever (UNA) Chief Executive Officer Paul Polman said the economic slowdown in emerging markets is here to stay as many countries need to enact structural reforms to adjust to new conditions after the boom of recent years.
“They are still relatively stronger economies, but still fragile,” Polman said. “And you see that growth coming off now a little bit, obviously not being helped either by lower demand coming from Europe and the U.S. This will last a few years. And it will only be corrected if some of the reforms have been made in these places.”
“I am always surprised that I am the one who sort of has to announce there’s a slowdown in emerging markets,” Polman said, speaking Nov. 29 at a reception where he was awarded the 2013 World Wildlife Fund Duke of Edinburgh Conservation Medal for Unilever’s efforts to reduce environmental damage.
“Emerging markets are clearly decelerating, but will always grow faster than the developed world,” said Jon Cox, an analyst at Kepler Cheuvreux in Zurich. “Unilever is the emerging market play — given 60 percent of sales are there, what Polman says on them has a lot of weight.”
More on FMCGs
The World of CEOs cites Unilever as the third largest FMCG. Here is a list of Leading FMCG Corporations and the products they have.
Comments From Saxo Bank Chief Economist
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