India has one of the World’s largest youth population, that is aspiring, growing, earning, spending, consuming a whole range of products and services available in the market. The Country’s Food & Home and Personal Care (HPC) sector is rated at around approximately $300 billion in 2017 with an expectation to enlarge at a CAGR of 11% making the numbers to reach around $500 billion in the coming 5 years time period. The overall market gets around approximately 92% contribution from the Food & Beverages industry. The Indian consumer market segment consists of consumers from urban and rural areas. Low availability of branded foods in rural areas creates ample opportunities for HPC companies to jump in and scale businesses.

Future Consumer Limited

With the Indian people deeply entrenched with traditional preferences for foods, Future Consumer Limited has successfully been able to introduce “FMCG 2.0” attracting the new age consuming generation. Here are the business segments of the Company:

Source: Annual Report 2018

Centre of plate

The company has various products which help the customer to cater their everyday Essentials required in the Indian Kitchen. “Golden Harvest” is the name of the brand which leads the Company in terms of revenue generation. During FY17-18, this business segment helped to collect sales more than Rs 1000 Cr. The Golden Harvest brands under itself various high-quality superfoods like quinoa, pearl millet, black rice, jasmine rice, etc. The Company also launched an organic and pesticide-free brand “Shubra” which has many pulses, spices, rice and sugar under it. There is another brand adding the portfolio of brands, “Sangi’s Kitchen” having authentic spices such as Coriander, Kashmiri Chilli, Turmeric powder and some essential herbs and seasonings.

Processed foods and Dairy

The Company has introduced many innovative products with the fusion of spices such as ‘Peri Peri Bhujiya’ and ‘Schezwan Chutney’ with added flavors of green tea and beverages. The brand name under this segment is “Tasty Treat”. It has a wide range of ‘mindless munching’ products which include new age namkeens, ready-to-eat snacks, pop-corns, beverages with an Indian touch, wafer biscuits, sauces, frozen foods and many more.

Home & Personal Care

The Company’s largest brand under HPC sector is “CleanMate”. This brand provided everything from the range of home cleaning products to bathroom cleaner. It was also featured in a famous social influential Bollywood movie – “Toilet, Ek Prem Katha”. This featuring helped the brand to achieve a remarkable sales of approximately Rs 70 Cr during FY2018. Other brands are “Think Skin” body wash available in five new varieties depending upon the customer’s taste, brand “Kara” helps the woman to cater her need for ‘Beauty-on-the-go’, Brand “TS” comes with a variety of grooming tools and accessories and baby-care products brand “Puretta”.

Distribution Network

The company has got a vast distribution network supplies products to around 103,000 stores. The Company also has a partnership with the Government of Rajasthan’s Public Distribution network over 6100 fair price shops. The partnership with Indo Nissin has paved way for nearly 2 lakh touchpoints. It has also entered into new modern trade formats such as Hypercity, WHSmith, Foodworld and Heritage.

 

 

Future Retail Limited

Future Retail Limited is an India-based company, which is engaged in the business of retailing a range of household and consumer products through departmental store facilities under various formats. The Company is primarily engaged in the business of multi-brand retail trade.

The Company has access to approximately 20 compact hypermarket easyday stores and over 210 supermarket easyday stores.

Its retail formats primarily consist of value business and home business. In its value business, the Company formats include:

  1. Big Bazaar, a hypermarket format
  2. Food Bazaar, a supermarket
  3. fbb, a fashion destination
  4. Foodhall, a supermarket
  5. & easyday convenient stores.

In its home business, the Company operates Home Town, a one-stop destination for home improvement, and eZone, a consumer durables and electronics chain.

Source: Investor Presentation 2018

As we can see from the above data, the revenue contribution from all the 3 broad segments is moving around 30-35%. Gross margin is more on Fashion segment and least on Food segment.

Source: Investor Presentation 2018

From the above data, we can conclude that the Company’s brands are ruling major chunk of the market shares of the respective segments like Fashion and Cookware.

Source: Investor Presentation 2018

From the above data collected from the Company’s Investor presentation, we can see an opposite pattern compared to Large Stores analysis, here the Major revenue contributor is Food segment, albeit Gross margin rates are closer to 15-20% in both segments of small stores which are Food and Non-Food.

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