So what exactly does an FMCG company refer to? Well, FMCG stands for fast moving consumer goods, and encompasses all types of goods. So basically, any good that can be manufactured quickly and is generally mass produced is considered to be FMCG and the company producing them known as an FMCG company. The FMCG sector can encompass several industries including cigarette and tobacco, food (which is perhaps the biggest industry within FMCG), beverages, toiletries and batteries among many others. Hence, you can agree that the FMCG sector is quite diverse, and one of the most important sectors in the world as well, which is perhaps why it is worth approximately $15 trillion globally.
While it may be a huge sector, being an FMCG company is not an easy thing. Margins tend to be extremely low with low barriers to entry and hence high competition. In fact, the profits of an FMCG are rather reliant on volumes rather than high prices as many of these goods, barring cigarettes of course, tend to be price elastic, and hence can put off people with a price rise. Furthermore, many of these goods generally tend to have a short shelf life and hence, have to quickly get their product out and sell it to avoid expiration costs as well as warehousing costs. So basically, for an FMCG company to grow and earn profits, they need to sell as much volume as they can, and quickly and consistently, otherwise they’ll be in a bit of trouble. In addition, now that the world has grown environmentally conscious and realized the damage that packaging does to the environment and the fact that it is not sustainable, FMCG companies are under pressure to provide environmentally friendly packaging, which is also raising costs. This increase in costs is affecting the already low margins in the industry, though the 15 largest FMCG companies in the world are unlikely to face such issues, considering their profits are already in billions of dollars.
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Of course, the strength of the FMCG sector, and any other sector in the world basically, has been significantly impacted by the Covid-19 pandemic. Originating in China, the virus spread across the world and has infected over 60 million people, killing more than 1.4 globally as well. To prevent its spread, most countries across the world went into lockdown, with all businesses other than essential businesses being closed down, affecting billions of people. These lockdowns have affected many FMCG companies as well, but mostly those who are in the non-essential category. Many companies, especially food and beverages companies, have also seen a major jump in demand as people increased their consumption while in lockdown, though other industries such as the alcohol industry still face a long recovery, as it has been weighed down by travel retail exposure and on-trade exposure. Many countries blocked alcohol sales, including India and South Africa to allow for a smoother lockdown.
The largest FMCG companies in the world include companies which are among the largest beverage companies in the world and the largest dairy companies in the world. These companies have accumulated assets of over $1.2 trillion while the market cap was nearly $1.9 trillion as well. The total revenues of these companies are over $670 billion and the total profits are worth nearly $81 billion. These are also some of the most well known companies in the world, owning brands which you are more likely than not to have in your own house as well. These companies are from the food and beverages industry, cigarette and tobacco industry, meat industry and household products industry as well. So let’s take a look at the companies responsible for most of the products in our households, starting with number 15:
15. Kraft Heinz (NASDAQ:KHC)
Total market cap of the company (in billions of dollars): 39.78
Total revenue of the company (in billions of dollars): 18.2
Total assets of the company (in billions of dollars):): 22.9
Total net profit of the company (in billions of dollars): 1
Headquartered in the US is one of the biggest American food companies in Kraft Heinz, where in addition to Kraft and Heinz, there are at least 20 additional major brands including Boca Burger and Gevalia.
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14. JBS
Total market cap of the company (in billions of dollars): 11.7
Total revenue of the company (in billions of dollars): 51.8
Total assets of the company (in billions of dollars):): 31.4
Total net profit of the company (in billions of dollars): 1.5
It is the second biggest processor of meat, beef and pork in the world, and is headquartered in Brazil, with over 150 plants across the world.
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13. Heineken
Total market cap of the company (in billions of dollars): 22.4
Total revenue of the company (in billions of dollars): 26.8
Total assets of the company (in billions of dollars):): 52.2
Total net profit of the company (in billions of dollars): 1.2
One of the most well known beer brands in the world is Heineken, which is headquartered in the Netherlands.
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12. Tyson Foods (NYSE:TSN)
Total market cap of the company (in billions of dollars): 23.7
Total revenue of the company (in billions of dollars): 43.1
Total assets of the company (in billions of dollars):): 33.8
Total net profit of the company (in billions of dollars): 2
Tyson Foods was founded 85 years ago in 1935, and is the biggest processor of chicken, been and pork in the entire world.
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11. Danone
Total market cap of the company (in billions of dollars): 45
Total revenue of the company (in billions of dollars): 28.3
Total assets of the company (in billions of dollars):): 50.9
Total net profit of the company (in billions of dollars): 2.1
Danone is one of the biggest dairy companies in the world and is headquartered in France, with products sold in 120 countries.
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10. Mondelez (NASDAQ:MDLZ)
Total market cap of the company (in billions of dollars): 82.2
Total revenue of the company (in billions of dollars): 26
Total assets of the company (in billions of dollars):): 63.6
Total net profit of the company (in billions of dollars): 3.7
Mondelez is a food, beverage and snack company in the US, and owns some of the most famous brands in the world including Chips Ahoy!, Oreo, Ritz, Tuc, Toblerone, Cadbury and numerous more, some of which may be in your pantry right now.
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9. Phillip Morris (NYSE:PM)
Total market cap of the company (in billions of dollars): 119.7
Total revenue of the company (in billions of dollars): 30.2
Total assets of the company (in billions of dollars):): 37.5
Total net profit of the company (in billions of dollars): 7.6
Phillip Morris is the biggest cigarette manufacturer in the US, and has products in around 180 countries, and if you’re a cigarette smoker, you must have at least once tried its most recognized brand, Marlboro.
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8. L’Oreal
Total market cap of the company (in billions of dollars): 162.5
Total revenue of the company (in billions of dollars): 33.4
Total assets of the company (in billions of dollars):): 49.2
Total net profit of the company (in billions of dollars): 4.2
L’Oreal is the biggest cosmetics company in the entire world producing hair color, sun protection, skin care, perfume and make-up. The company is headquartered in Paris, France.
7. British American Tobacco
Total market cap of the company (in billions of dollars): 88.8
Total revenue of the company (in billions of dollars): 33
Total assets of the company (in billions of dollars):): 186.8
Total net profit of the company (in billions of dollars): 7.3
It is the largest cigarette manufacturer in the entire world, and has operations in over 180 countries with its biggest brands including Dunhill, Pall Mall, Lucky Strike and Kent.
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6. Unilever (NYSE:UN)
Total market cap of the company (in billions of dollars): 130.6
Total revenue of the company (in billions of dollars): 58.2
Total assets of the company (in billions of dollars):): 72.7
Total net profit of the company (in billions of dollars): 6.3
Headquartered in the UK and the Netherlands, Unilever is a consumer goods company, engaging in the production of candy, food, pregnancy tests, frozen foods and numerous other products, and has 13 brands with over a billion euros in revenue each annually.
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5. Pepsi Co. (NASDAQ:PEP)
Total market cap of the company (in billions of dollars): 199.2
Total revenue of the company (in billions of dollars): 68.2
Total assets of the company (in billions of dollars):): 85.1
Total net profit of the company (in billions of dollars): 7.2
It may have greater revenue than Coca-Cola, but Coca-Cola is still a larger company, taking everything into account. The battle between Pepsi and Coca-Cola for soft drink supremacy has been going on for decades, though Pepsi has also engaged in producing snack foods in addition to its iconic soft drink. In fact, 22 brands of Pepsi actually each earn more than $1 billion in revenue.
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4. Coca Cola (NYSE:KO)
Total market cap of the company (in billions of dollars): 227.5
Total revenue of the company (in billions of dollars): 37.2
Total assets of the company (in billions of dollars):): 94
Total net profit of the company (in billions of dollars): 10
Unless you’re living in an extremely remote tribe with no access to media or the consumer culture anywhere in the world, you are aware of Coca Cola, which is one of the biggest beverage companies in the world. It has some astounding statistics including the fact that there are approximately more than 1.8 billion servings of the drink every single day across the world. Of course, it has a major presence in more or less every country in the world, operating in over 200 companies and territories. Apart from the normal Coke drink, it also Diet Coke, Caffeine-Free Coca-Cola, Diet Coke Caffeine Free Coca-Cola, Coca-Cola Zero, Coca-Cola Cherry and Coca-Cola Vanilla among others.
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3. AB InBev
Total market cap of the company (in billions of dollars): 89.9
Total revenue of the company (in billions of dollars): 52.3
Total assets of the company (in billions of dollars):): 238.3
Total net profit of the company (in billions of dollars): 9.1
AB InBev is the biggest brewer in the world, and simply increased in size when it purchased a competitor in SABMiller. The company has tons of beer brands, with over 600 beer brands and a presence in at least 150 countries. It seems like the only countries it doesn’t have a presence in is Muslim countries, since alcohol consumption and sale is not allowed in Islam. The company has only been in existence for 12 years after the merger of InBev and Anheuser-Busch.
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2. P&G (NYSE:PG)
Total market cap of the company (in billions of dollars): 343.9
Total revenue of the company (in billions of dollars): 70.3
Total assets of the company (in billions of dollars):): 118.6
Total net profit of the company (in billions of dollars): 5
P&G is engaged in the production of consumer goods. The company was founded 183 years ago in 1837, and its products include beauty, grooming, fabric, home care, health care, baby, feminine and family care. It also used to have a foods, snacks and beverages division before selling off the Pringle brand to Kellog’s. It used to have over 160 brands, but in 2014, it got rid of over a hundred brands to focus on the remaining 65 brands, which contributed 95% of the total revenue of the company. Like most giants, it has also engaged in a lot of controversies, including price fixing, animal testing and child labor.
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1. Nestle
Total market cap of the company (in billions of dollars): 304.1
Total revenue of the company (in billions of dollars): 93.1
Total assets of the company (in billions of dollars):): 132.1
Total net profit of the company (in billions of dollars): 12.7
Nestle is a Swiss food and drink conglomerate, and one of the top 100 companies in the world, regardless of industry. Among its numerous products are medical food, baby food, breakfast cereal, tea, coffee, confectionary, milk, frozen food and ice cream. Some of its biggest brands, including KitKat, Nescafe, Nespresso Nesquik and Maggi have over $1 billion in sales each. In fact, 29 brands of the company each have over $1 billion in sales. The company is one of the oldest ones in the list at 154 years, and has grown majorly in size, with 447 factories in 189 countries and providing employment to at least 339,000 people.
Nestle has also accumulated a ton of bad press, due to some extremely controversial practices and allegations against the company include, its reliance on child labor, slavery, chocolate price fixing and numerous other acts which have seen several fines against the company being enforced by the courts.
See also: 15 largest fast food companies in the world and 11 biggest FMCG companies in the world
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Disclosure: No positions. 15 largest FMCG companies in the world is originally published on Insider Monkey.