FMCG products sell out quickly and their short shelf life is attributed to higher demand due to frequent consumption.

Consumption in Bangladesh, despite the tensions caused by the war in Ukraine, remains above 66% of GDP.

The annual size of the FMCG market has already reached around $4 billion, according to industry experts. They believe that the current tension will not last too long and that the growth potential of the consumer goods market remains intact.

The intact margin

With strong GDP growth and rising income forecasts, Bangladesh is expected to become the ninth largest consumer market by 2030.

The demand for FMCG products has been growing steadily until the post-2022 global crises.

“The current economic crisis may only delay the journey by a few years,” said Syed Alamgir, managing director and CEO of the FMCG arm of the Meghna Group of Industries, citing the resilience of Bangladesh’s economy.

Apart from the potential for wider economic growth, it also counts on a growing population preference for branded products.

According to him, FMCG brands now cater to a quarter of the demand in the FMCG food segment, indicating a lot of room for maneuver for brands as they have a long track record of taking market share away from traditional players operating without widely recognized brands, he said.

However, market behavior varies from segment to segment.

For noodles, people rely on brands, while traditional bakers across the country meet the bulk of the demand for bread and biscuits.

Over the past decade, brands have also attracted consumers to assorted, packaged, staple food products, such as packaged rice and lentils.

“It’s still a long journey,” said Md Mustafizur Rahman, PRAN’s head of marketing for rice, salt, flour, lentils and agribusiness companies.

People prefer bulk rice bags from trusted business groups, but premium retail packaging that costs more is not yet a daily need for the masses, he said.

Premium packaged rice accounts for no more than 1% of national consumption, he said, adding that major players are intensifying efforts to increase the share of the packaged segment.

The interest of local and foreign brands in this growing market is a testament to the potential of FMCG as they continue to invest millions of dollars for scale, market share and expansion into new segments of products in a competitive market.

Besides, some 4-5 lakh jobs have already been created by the FMCG industry, where more people are indirectly dependent on the sector for their livelihood.

The FMCG market is broadly divided into three segments: food and beverages, personal care, and various frequently consumed household products, including those intended for cleaning.

Food and drinks

As might be expected, food and beverage accounts for the lion’s share of the FMCG market – about two-thirds of the $4 billion – as the average consumer spends most of their money in food.

Urbanization and consumers’ busy daily routine influence people’s preference for branded food and beverage products. Bakery and snack products are the most popular among the long list of FMCG food products.

PRAN, Square, Meghna Group of Industries, City Group, ACI are the major players in the food segment.

Additionally, more than a dozen companies also have a strong presence in various sub-segments of the market.

The multinational Nestlé has a dominant share in the market for noodles, baby food, coffee and chocolate.

The beverage segment includes soft drinks, flavored drinks, energy drinks, electrolytes and dairy-based drinks, having reached $204 million in the country, according to Statista. This share is expected to exceed $400 million by 2029.

Local Akij, with its remarkable marketing and wide distribution network, has emerged as the largest player in the beverage market, followed by PRAN, Meghna Group of Industries, and multinationals Coca Cola and Pepsico.

The multinational brand Horlicks is a leader in the health drinks market. Olympic is the market leader in biscuits, while locals Igloo and Polar dominate the ice cream market.

Personal care

According to Allied Market Research, the estimated personal care market size – which includes cosmetics and toiletries – reached over $1 billion in 2020 in Bangladesh and could reach over $2 billion by 2027 .

This growth is attributed to increasing awareness of personal hygiene and hygiene among the middle class, who had seen their incomes rise until post-2022 inflationary pressures.

Unilever Bangladesh, Marico, Square Toiletries, Keya and Kohinoor are the major local manufacturers. The market also depends on imports of premium soaps, shampoos and skin care products.

Consumer products for the home

FMCG household products which include all fast-moving goods used to clean the kitchen, toilet and floor, alongside hygiene brands like Dettol, Savlon and Lifebuoy, had a domestic market of over 100 million dollars in 2023, according to industry insiders.

With an increasing number of families using these products, the market has the potential to double over the next five to six years, they added.

ACI, Reckitt Benckiser, Unilever are the main players in the segment.