Local brands command 60% of FMCG shopper choices
Global FMCG brands challenged as local players grow by $41 billion in 2015, almost double the rate of multinationals.
- Local and regional FMCG brands account for 46 per cent of total FMCG spend in 2015 and over half of FMCG market growth (58%) is driven by local brands
- Growth not over for global brands: strong performers in the ranking include Colgate (adding the most shoppers to its portfolio), Lifebuoy, Lay’s and Dove
- Sunsilk continues to shine, particularly in emerging markets
- Coke remains the world’s most chosen brand
- Colgate is the only brand in the ranking with a global penetration over 50%
Local brands are closing in on their multinational competitors, growing value at nearly twice the rate of global brands for the third year running.
This is the key finding of the latest Kantar Worldpanel Brand Footprint report, which today launches its annual Top 50 ranking of the world’s most chosen FMCG brands.
Analysing one billion households across 44 countries in five continents and 300 billion shopper decisions, the study used its proprietary metric – Consumer Reach Points (CRPs) – to discover how many times a brand was chosen by consumers over the course of one year.
Local brands continue to outpace the market: while the total value of FMCG grew by 4.7 per cent in 2015, local players grew by 6.2 per cent. By comparison, global brands grew by 3.4 per cent. Particularly strong in the food and beverage categories, brand choices are dominated by local players in terms of both the number of brands available as well as in the number of times they are chosen.
Local brands are especially prevalent in Asia, Latin America and also parts of Europe including Spain. Most notable is China – where local brands comprise 75 per cent of shopper decisions followed by Indonesia (61 per cent) and India (57 per cent). The three best performing local brands of 2015 are Chinese natives: Yili, Mengnui and Bright.
Despite this shift, growth is not over for global brands. Within the top 10 brands alone, Lifebuoy, Lay’s and Dove all managed to not only grow CRP, but also move at least one place up the ranking.
The key opportunity area for multinationals is ecommerce, the fastest growing channel, where they currently dominate.
Alison Martin, Director at Kantar Worldpanel explains:
“Where modern trade (supermarkets and hypermarkets) is the dominant distribution channel for many global brands, the opposite is true for local brands who distribute through more traditional methods and are thriving in the emerging markets which are naturally showing higher rates of growth.
For local brands, the world is their country: they look nationwide rather than just tier one or tier two cities. Not only are there significantly more local brands across the world, it is generally the case that they will reach more shoppers in more remote parts of their market, working in closer concert with consumer need. Where budgets are tight, they will adjust price points or pack size. In large emerging markets such as China, India and Indonesia, many consumers see local brands as not only familiar but also more affordable and widely available.”
Josep Montserrat, Global CEO of Kantar Worldpanel, said:
“The focus of this year’s Brand Footprint report extends beyond the Top 50 ranking as the pressure from local brands continues to bear on their global competition. While reflecting the growth of smaller and local brands, we also scrutinise more niche players, looking at both local brands and brands poised to break into the ranking.
Whether you’re a global, local or fledgling player, I congratulate every brand that features in this report, which I hope serves both as a comprehensive look back at 2015 and as a roadmap for growth for the years to come.”
Key Facts from the Report
Most Chosen Brands
• Coca-Cola remains the world’s most chosen brand, and is the number one brand in 10 countries
• Maggi is the number one food Brand
• Colgate is the top health and beauty brand
• Downy is the top home care brand
• Close-Up and Barilla are among the fastest growing within the ranking, both climbing five places
• Dettol continues to grow at a steady pace, and is knocking on the door of the Top 50
• Colgate added the most shoppers to its portfolio for the second year running in 2015, recruiting 40 million new households.
• Indomie (Indonesian noodle brand) joins the global top 10 ranking as Brand Footprint adds new territories to the study
Global FMCG: a snapshot of 2015
• Total FMCG brands grew by 4.7 per cent in value
• The average brand penetration is 19.6 per cent
• The average brand purchased four times a year
• 47 per cent of brands grew in the ranking and three quarters of these attracted more households and grew penetration
• Consumers paid more for fewer goods: the value of FMCG sales increased by 4 per cent , volumes declined by 0.4 per cent. The United States, Latin America and Asia showed to be the regions driving this trend
• Food and beverage volumes declined globally by 0.6 per cent. But, home care (volumes up 0.6 per cent) and personal care (up 0.3 per cent) continued to grow
• Emerging markets accounted for 82 per cent of FMCG growth in 2015, with star performers including China, India, Turkey and South Africa
• Revenue growth in these regions nearly halved in the last year (falling 12.4 per cent to 6.7 per cent), but continues to outshine developed markets where sales rose by 1.3 per cent
• FMCG value share in emerging markets has increased from 44 per cent to 48 per cent in just two years. On this trajectory, emerging markets will account for more than half of sales by 2017
• While eight in 10 of all shopping decisions take place in emerging markets, the average shopping decision is worth considerably less ($1.4US versus $3.7US in developed countries
• The 15 per cent of the global population living in developed countries spend nearly four times more per head than those in emerging markets