PBI has drawn on WealthInsight’s research to analyse a specific industry which plays a major part in driving high net worth wealth creation. This month PBI looked at FMCG in France, Canada,Turkey, India and Poland.
The FMCG sector is dominated by some major players including the companies Procter & Gamble and Unilever, which produce a wide range of products. Some other companies like Walkers and L’Oreal tend to focus on single product areas.
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The typical products of the industry include home cleaning items, personal hygiene goods and food, such as ready meals.
Lately, the sector has been facing the issue of sustainability, particularly by reducing its packaging.
Another headline is reliability. Machines have to run consistently to increase productivity and automation, robotics and programmable logical controllers are the focus. The goal of the FMCG sector is to run continuously thanks to machines, with no further human intervention.
Market Research, consumer research, segmentation and product positioning is the compulsory homework of any company in this industry. Advertising and promotions drive brand awareness and purchase.
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By GlobalDataWhen it comes to advertisement, high budgets, creativity and detailed planning are needed. TV advertising remains the most common but new solutions are spreading, including internet advertisements.
Though the absolute profit made on FMCG products is relatively small, they are generally sold in large quantities, and so the cumulative profit on such products can be substantial.
Key Figures:
– 873,600 HNWIs, or 5.2% of the global high net worth population, are involved in the media sector.
– Key geographies: countries benefiting from good infrastructures network and qualified, but cheap, workers are a hub for investors in the sector.
– In France, 14.2% of UHNWI have made their fortune in FMCG. The sector is at the 2nd rank after retail and fashion.
The FMCG industry is expected to be one of the top performing between 2012 and 2016 (with healthcare). The country’s top 20 billionaires’ list indexes three UHNWI who made their fortune in this sector: L’Oreal heiress Liliane Bettencourt, with a wealth worth $19,6bn; Italian-born Michele Ferrero, with a fortune made in confectionary worth $16,8bn; and Emmanuel Besnier, CEO of the largest dairy products group in the world, Lactalis, with a wealth worth $3,3bn.
| Name | Net Worth (US$bn) | Sector | City of Residence |
|---|---|---|---|
| Mr. Bris Rocher | 2.39 | FMCG | La Gacilly |
| Mrs. Nathalie Samani | 1.2 | FMCG | Bordeaux |
– Canadians who made their wealth in FMCG are not as many. In Canada, they are 2.4% to have this industry as their primary source of wealth. But between 2007 and 2012, the sector grew its population of HNWI by 11%.
With a fortune of $7.8bn, Galen Weston is the wealthiest Canadian in the industry. He is the second wealthiest billionaire in Canada after the media mogul David Thomson, who saw his fortune drop by 7% over the same period. If Weston’s wealth increased by a respectable 11% between 2007 and 2012, it is nowhere near Emanuele Saputo’s $3.7bn value, which increased by a massive 147% between 2007and 2012.
| Name | Net Worth (US$bn) | Sector | City of Residence |
|---|---|---|---|
| Dr. Willard Gordon Galen Weston | 7.80 | FMCG | Marlow, Buckinghamshire |
| Mr. Emanuele Saputo Sr. | 3.70 | FMCG | Sicily, Italy |
| Dr. Charles Rosner Bronfman | 2.00 | FMCG | Montreal |
| Mr. John Risley | 1.00 | FMCG | Halifax, Nova Scotia |
– Turkey‘s FMCG sector doesn’t represent a big part when it comes to primary source of wealth of UHNWI. Only 1.9% of them have made their fortune in this industry. However, this figure is expected to boom between 2012 and 2017. Indeed, the number of UHNWI having FMCG as their primary source of wealth will go from 1,923 in 2012 to 3,020 in 2017, a 57% increase.
Murat Ulker is among the top 20 billionaires’ list in Turkey. His company, Yildiz Holding, is the country’s largest food producer, making everything from biscuits, chocolate, milk to baby food and packaging. The man’s fortune is estimated at £2.8bn.
| Name | Net Worth (US$bn) | Sector | City of Residence |
|---|---|---|---|
| Mr. Murat Ulker | 2.86 | FMCG | Istanbul |
| Mrs. Ahsen Ozokur | 1.27 | FMCG | Istanbul |
| Mr. Hamdi Ulukaya | 1.10 | FMCG | Norwich |
– The FMCG sector in India is the primary source of wealth to 4.6% of UHNWI. If this figure can seem a bit little, the number of UHNWI in the industry is expected to rise significantly in the next years, driven by increased consumer spending from a growing middle class. The sector is currently the 4th largest in the country’s economy and grew by 15% in 2011. India benefits from access to key raw materials and an overall cheaper labour costs.
| Name | Net Worth (US$bn) | Sector | City of Residence |
|---|---|---|---|
| Dr. Anand Chand Burman | 2.90 | FMCG | Delhi |
| Mr. Ravi Kant Jaipuria | 1.78 | FMCG | New Delhi |
| Dr. Harsh Charandas Mariwala | 1.21 | FMCG | Mumbai |
| Mr. Vivek Chand Burman | 1.19 | FMCG | Delhi |
– Poland’s UHNWI are 11.7% to have made their wealth in FMCG. That places the sector at the 2nd rank for UHNWI’s primary sources of wealth, behind the retail and fashion industry (15%). Between 2007 and 2012, the number of UHNWI in the FMCG industry grew by 10%. FMCG is the only sector, with media, which knew growth over this period.
For more detailed reports on the countries featured above click here.
