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FMCG Industry Review of Bangladesh PDF
FMCG Industry Review of Bangladesh PDF
FMCG Industry Review of Bangladesh PDF
Bangladesh
(This document has been prepared by the Research Team of EBL Securities Limited for information only for its clients.
No part of this report should be copied or used in any other report or publication or anything of that sort without
any prior permission taken from the authorized publisher of this report)
Analyst: Asaduzzaman Ashik
research@eblsecurities.com
Usually, FMCGs have a short shelf life. Some FMCGs are highly perishable such as meat, fruits, vegetables, dairy
products and baked goods. Others products like toiletries, packaged foods, soft drinks, housework products have
high turnover rates. Revenue margin from the FMCGs is comparatively small, these products are generally sold in
bulk quantities to make considerable aggregate earnings. The business of FMCGs is considered as the most definitive
instance of low margin and high volume business.
Based on how fast products are sold to the customers, consumer goods are also classified as Slow Moving Consumer
Goods (SMCG). SMCGs are those which have a useful life longer than a year including stuffs such as domestic
appliances, furniture and home upgrading products. These products have a sluggish sales regularity and are not
circling as quickly as FMCGs.
Characteristics of
FMCGs
Consumer's Producer's
Angle Angle
Extensive
Frequent Low High Stock
Low Price High Volumes Low Margin Distribution
Purchase Involvement Turnover
Networks
1
http://www.worldometers.info/world-population/bangladesh-population/
2
https://www.thedailystar.net/country/bangladesh-gdp-growth-rate-in-2016-2017-fiscal-year-7-percent-government-1491103
From the table above, we can see that most of the expenditures are occurring in Food & Beverage items both in
rural and urban areas. In Urban areas, Housing and rent expenses are second area in terms of expenditure as % of
total Consumption expenditure by the individual consumers.
57.09
58
55.25 36. 00%
49.82 35.70%
35.00%
34. 00%
52
In the end of 2017, the urban population of the country stood 34.30%
50
33. 00%
48
33.50%
at 58.75 million which represents 35.70% of the total
32. 00%
46
44 32.80%
32.00%
31. 00%
40 30. 00%
the urban population of the country will be 85.95 million within 2012 2013 2014 2015 2016 2017
2030 and 111.88 mn within 20404. Urban Population % of total population
Source: World Bank & EBLSL Research
Middle Class Income Category
Like urban population, middle class people has Currently
contributed and expected to contribute in the growth of 34 million 25% People
fast moving consumer goods industry. According to Boston MAC by 2025 are Middle
Consulting Group, 2 million Bangladeshis are joining the Class
rank of middle and affluent class (MAC) a year. Currently
the number of MAC is around 12 million which is expected 12 million
33% Middle
people are
to be 34 million by the year 2025. According to Bangladesh Middle & Class by 2030
MAC
Development Studies (BIDS), 20% of the total population Affluent
in Bangladesh belongs to the middle class income category Class
compared with 24.1% in India. Researchers believe that
25% of the total population will belong to middle class
income category within 2025 and 33% will belong within Source: Financial Express (November 2017) & EBLSL Research
20305.
3
https://www.wttc.org/-/media/files/reports/economic%20impact%20research/countries%202015/maldives2015.pdf
4
http://bbs.portal.gov.bd/sites/default/files/files/bbs.portal.gov.bd/page/d6556cd1_dc6f_41f5_a766_042b69cb1687/PocketBook2016.pdf
5
https://thefinancialexpress.com.bd/views/opinions/burgeoning-growth-of-the-middle-class-1511362584
57. 00%
66.6456. 90%
56.99%
employed or looking for work. Labor 56.88%
64
64.32
Force is the depiction of the labor pool 56.79%62
63.21
56. 70%
62.11
56. 60%
58.86 56.44%
of 64 are not numbered in the labor 56
56. 30%
54 56. 10%
the total number of people who are 2010 2011 2012 2013 2014 2015 2016 2017
currently employed or in search of job. Labor Force Labor Force Participation Rate
In Bangladesh, the labor force are Source: World Bank, ceidata & EBLSL Research
increasing day by day. In 2017, total
labor force was 66.64 million compared to 58.86 million in 2010. Besides, labor force participation rate was 56.50%
in 2017 where the world average rate was 61.94% in the same year7. The labor force participation rate of Bangladesh
is clearly ahead of some other Asian countries. In 2017, labor force participation rate was 56.12% in Saudi Arabia,
54.44% in Pakistan, 53.79% in India, 53.54% in Sri Lanka8. This labor force has helped Bangladesh to reduce the
unemployment rate to 4.1% in 2017 compared to 35% in 2001 9. The lifestyle of the employed population has
changed and consumption pattern too. This huge working population is a major driver to the growth of FMCGs
industry over the year.
Rural Consumption
Consumption in rural areas is considered as one of the major drivers of the growth of the FMCG industry. According
to BBS, Rural consumption expenditure was 103% of total income in 2015 where urban consumption was 86% of the
total consumption. In last 15 years, consumption expenditure for rural areas has increased significantly and reached
at 103% from 81%. This rural market segment has immense prospects enticing overall FMCG growth.
6
https://economictimes.indiatimes.com/definition/labour-force-participation-rate
7
https://data.worldbank.org/indicator/SL.TLF.CACT.ZS
8
https://www.indexmundi.com/facts/indicators/SL.TLF.CACT.ZS/rankings
9
https://www.indexmundi.com/g/g.aspx?c=bg&v=74
Before 1979
1980 to 1999
2000 to 2017
500
350
250 247
neighbors India and Pakistan are consuming around 300
250
158
247 ml and 521 ml (per capita) daily respectively. As 200
150
50
balanced food, it is expected to increase the milk FAO Standard Bangladesh India Pakistan
consumptions day by day.
*Source: Daily Star, Dec 2016; Dhaka Tribune, June 2017; Department of Livestock Services, 2017
10 http://www.dhakatribune.com/opinion/op-ed/2017/06/24/milk-money/
24.8%
35. 0%
15.3%
25. 0%
15. 0%
6.1%
5.0 %
1.5% 1.0% 1.5% 2.0% 0.5% 1.0%
-5.0%
Milk Vita Aarong Pran Milk Akij Milk Amo Milk Ultra Milk Aftab milk RD Milk Army milk Pabna Dairy
Source: citeseerx & EBLSL Research
known brands of the country. At present, the annual market for branded biscuits is nearly BDT 30 billion 12. Demand
for biscuits is growing as entrepreneurs have shifted to automation in baking and consumers are looking for a variety
of quality foods at low prices.
Market Share of local and Imported Biscuits Major Classification Market share
The local manufacturers now meet 90% to 95% of the Local Biscuits 90% to 95%
domestic demand and the rest is imported 13. The local Imported Biscuits 5% to 10%
manufacturers have been able to win the confidence of Source: Daily Star, March 27, 2017
consumers by improving food quality and keeping prices
11
http://www.thedailystar.net/business/biscuit-market-grows-fast-demand-rises-1381864
12
http://www.thedailystar.net/business/biscuit-market-grows-fast-demand-rises-1381864
13
Source: http://www.thedailystar.net/business/biscuit-market-grows-fast-demand-rises-1381864
14 http://www.grandviewresearch.com/industry-analysis/frozen-food-market
15 https://www.alliedmarketresearch.com/frozen-food-market
9 EBL Securities Limited Research 21st June, 2018
Market of Ready-to-Cook & Processed Meat
The rising demand for easy and hygienically- The market is
prepared foods among the urban middle class Market size for growing for last
is pulling in large investors to the processed ready-to-cook 10 years and
The market is
food and frozen Industry experts
chicken and ready-to-cook frozen foods sector. growing at 20%
snacks is around believe that the
The growth is initiating due to people’s rising per year.
BDT 2,000 growing trend
interest in convenient foods16. million. will sustain in
coming years.
MARKET SHARE
25%
25%
20%
15%
15%
13%
10%
9% 8% 8% 9%
7% 6%
5%
0%
16
http://www.thedailystar.net/business/processed-chicken-market-heat-71871
•Crispy Chicken, Hot •Fried Chicken •Plain Paratha, Family •Paratha, Aloo Puri,
Crispy, Hot Wings, Paratha Potato Smiles, Roti,
•Chicken Sausage,
Chicken Pop, Burger, •Chicken Sausage, Singara, Samosa, Breaded Chicken
Drumsticks, Nuggets French Fry Fillet, Chicken
•Chicken Sausage, •Chicken Nuggets, Singara, Chicken
Chicken Ball, Vegi Chicken Ball, Wonton,
Burger
Nuggets
Chicken Pop
•Beef Singara
Igloo Foods KFC Bangladesh Rich Foods Lamisa Foods Bengal Meat
Limited
0.069%
Bellissimo currently holds 13% of the market 0.064% 0.0 70%
share. The entry of Bellissimo has altered the 0.0 60% 0.053%
dynamics of the industry as it presented many
0.0 50%
the market in the 1st week of April, 201318. The Bangladesh India Europe World
ice cream industry of Bangladesh relative to the Source: Euromonitor & EBLSL Research
GDP is on par with global market and higher than some of its neighbors.
Major Market Players
17
http://www.thedailystar.net/news/brand-war-heats-up-in-ice-cream-market
18
https://www.coursehero.com/file/p7kumb7/The-current-size-of-the-ice-cream-market-of-Bangladesh-is-over-BDT-500-crores/
Kwality 11%
Bloop 12%
Bellissimo 13%
Polar 26%
Igloo 36%
0% 5% 10% 15% 20% 25% 30% 35% 40%
An oligopolistic market, where only four companies control the total market
The tobacco industry of Bangladesh is controlled by British American Tobacco (BATBC), Dhaka Tobacco (under Akij
Group), Abul Khair Tobacco and Nasir Tobacco. BATBC is the only multinational cigarette producing company having
the leadership position in the market while others are local conglomerate having diversified business presence in
the country. BATBC has active presence in all four categories of cigarettes in the market while Abul Khair Tobacco
Company goes for the medium and lower segments and Nasir Tobacco Industries competes only in the lower
segment. BATBC is specialized in producing cigarette only while other manufacturers also produces bidi.
19
https://www.tea.globaltradeconcern.com/
Bottled Water
Mum is the market leader in bottled water segment.
Moreover, Pran, Fresh, Jibon, Aquafina, Kinley,
Shanti, Acme, Muskan, Ifad & Spa are the popular
and available bottled water brands in Bangladesh.
Top three brands of bottled water of 2017 are on the
chart.
Partex Beverage Ltd Meghna Group of Industries Pran Foods
Transcom Beverage The Coca Cola Company The Coca Cola Company
Salt
Salt Industry is the largest labor oriented cottage industry
in Bangladesh. In 2017, 1.4 million tonnes of salt was
produced in Bangladesh against the annual demand of 1.6
million tonnes20. Salt is produced from sea water by solar
and lixiviation process (separating soluble from insoluble
sunstances) in the seaside areas of the districts of ACI Limited Meghna Group Molla Group
Chittagong, Cox’s Bazar, Noakhali, Barishal, Khulna and
adjoining off shore islands. Cox’s Bazar produces 95% of the total production of salt in the country. The key brands
of the salt market are ACI Pure Salt, Molla Super Salt, Fresh Super Salt, Confidence Salt and others. The top three
brands in this segment of 2017 are on the diagram.
Spice
As an agriculture-based country, Bangladesh produces different spices. The market of processed spices are growing
by 15% to 20%. The estimated market size of packed spices (which has replaced fresh spices) is around BDT 9 billion
to 12 billion21. The branded spices are getting popular by branding efforts of the respective companies. The spices
of Bangladesh are now exporting to some countries
especially in Middle East, Malaysia and Australia. Radhuni,
Pran, BD, Arku are the key players in the market. Radhuni
has approximately 66% market share, Pran holds 19%
market share, BD Food Holds 7% market share, Arku holds
3% market share and other brands hold 5% market share. Square Food & Beverage Pran Foods BD Foods
The top three brands of 2017 in this segment are on the
chart.
Edible Oil
In Bangladesh, per capita edible oil consumption is Per Capita Edible Oil Consumption (in KG)
9.9 kg compared to 15 kg in India and 16.1 kg in 61
50
Pakistan22. Edible oil consumption in Bangladesh is
far below from the world average which suggests 25 25.2
9.9 15 16.1
significant considerable growth potential for the
edible oil industry.
Bangladesh India Pakistan China World USA EU
The growth of trademarked edible oils is anticipated
to persist favorable with the support of the growth of
the retail sector and increasing income levels.
Every year Bangladesh imports more than 2 million
tonnes of edible oil which costs around USD 1.5
20
https://thefinancialexpress.com.bd/economy/bangladesh-produces-14m-tonnes-salts-this-year-1503209483
21
http://www.thepages.com.bd/2017/03/17/spice-industry-great-opportunity-market-bangladesh-anika-fowzia/
22
http://bida.portal.gov.bd/sites/default/files/files/bida.portal.gov.bd/page/f40752f4_ccac_45d4_9bc4_3367eb475e8a/ValueProposition_EdibleOil.pdf
Sugar
The sugar industry of Bangladesh is highly
Sugar Production (in 000' MT)
dependent on imports. Bangladesh imports 95% of
140
its annual demand for the sweetener by importing 115 125
110
from Brazil and Argentina25. Currently, there is a
140
110
75 85
local demand for 50 to 60 thousand tonnes of sugar 65 65
80
per month26. 50
In 2017, total production of sugar was 125 2010 2011 2012 2013 2014 2015 2016 2017
thousand MT compared to 65 thousand MT a year Source: Index Mundi & EBLSL Research
earlier. The production of sugar fluctuates highly
with the availability of raw materials that is sugar Import of Sugar (in 000' MT)
cane. 2,283
2,085 1,982 2,097
In 2017, Bangladesh imported 2,097,000 MT sugar 1,700
compared to 2,283,000 MT in 2016. The import of 1,537 1,547
1,361
sugar has increased since 2010 when the import
was 1,361,000 MT.
2010 2011 2012 2013 2014 2015 2016 2017
Noodles
According to Euromonitor International the market value of the
overall packaged food industry is around USD 21.2 billion. The
Noodles and Pasta segment experienced a CAGR of 17% since
2013. The top players are Maggi (Nestle Bangladesh), Cocola
(Cocola Food Products Ltd), Mr. Noodles (Pran), Doodles (New
Nestle Bangladesh Cocola Food Pran Foods
Zealand Dairy), Ifad (Ifad Foods), Sajeeb (Sajeeb Group), Mama
(Presidents Foods), Knorr (Unilever), Chopstick (Square Foods) and others. The top three brands of 2017 in this
segment are on the chart.
23
http://www.observerbd.com/2015/12/13/125763.php
24
http://www.thedailystar.net/news-detail-173242
25
http://www.thedailystar.net/business/city-group-deshbandhu-get-nod-export-sugar-1471171
26
http://www.bizbangladesh.com/business-news-1914.php
Fairness.
27
https://tradingeconomics.com/bangladesh/imports/essential-oils-perfumes-cosmetics-toileteries
28
https://www.researchnester.com/reports/virgin-coconut-oil-market-global-demand-analysis-opportunity-outlook-2023/253
29
https://blog.euromonitor.com/2017/06/top-trends-home-care-2017.html
30
http://bpgmea.org.bd/v2/index.php/bpgmea
31
http://www.thedailystar.net:8080/business/plastic-industry-shows-promise-demand-rises-1550146
Retailer Channel
Wholesaler Channel
Shareholding Structure
The shareholding structures (as on 31 May 2018) of some selected companies are as follows:
Dividend History
300
250
200
150
100
50
14-Jul-14 14-Jan-15 14-Jul-15 14-Jan-16 14-Jul-16 14-Jan-17 14-Jul-17 14-Jan-18
180
100
20
14-Jul-14 14-Nov-14 14-Mar-15 14-Jul-15 14-Nov-15 14-Mar-16 14-Jul-16 14-Nov-16 14-Mar-17 14-Jul-17 14-Nov-17 14-Mar-18
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accurately reflect their personal views about the subject matters discussed. No part of their compensation was, is, or will
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notice. All reasonable care has been taken to ensure the accuracy of the contents of this document and the author(s) will not
take any responsibility for any decisions made by investors based on the information herein.
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