What you need to know about FMCG Sector in UAE

The FMCG (Fast Moving Consumer Goods) / Consumer Packed Goods (CPG) represents one of the largest industries worldwide. Companies involved in FMCG sector supply low-cost products that are in high demand. The sector is characterized by low margin & high volume. FMCG Sector in UAE is facing a challenging environment with recent changes in the market including implementation of VAT (Value Added Tax) and excise progressive pricing. FMCG Volumes are dipping down YOY by 3.2 % in UAE since last 2 years, which caused aggressive promotional campaigns by manufacturers and retailers to compensate for their sales losses and maintaining market share. The total sales of goods sold through discounts and special offers have reached 47% of total volume sales in the UAE, levying of the excise tax to reduce consumption of unhealthy/ harmful commodities such as energy drinks and carbonated drinks, cigarettes, etc. For markets that have been enjoying a decade of double-digit growth, it has been a challenge for manufacturers and retailers to adapt quickly to this new competitive intensity. The overbidding war on promotion has led companies to take quick, short term, decisions in order to defend their position: Recent Trends:

• Omni Channel Retail expanding
• Greater focus on healthier products. More emphasis on health and wellness product
• Upscale packaged food and drink that are ready to use and offer speed scratch is on rise
• Increase in disposable income and consumers
• Millennial consumers are creating their own impact on FMCG market
• Demand Driven by population Density

MBG Strategy: We will deliver value to business by managing spectrum of business issues and assist clients in identifying and developing potential solutions to the challenges by reducing the risk and maximizing the profit: Minimizing Risk – By providing a bouquet of services, we help client to better manage risk by addressing areas of:

• Regulatory Compliance
• Ownership Governance
• Crisis Management
• Fraud

In doing so we provide the following services: Control and Governance, Stakeholder Management, Risk management , Board Structure and effectiveness, Dispute Analysis and investigations, Litigation Support, Internal Audit, Policy Documentation Maximizing Profit – With the focus to increase shareholder’s wealth an organization is always focused on maximizing profit and that can be achieved by strengthening the areas of:

• Finance and Accounts, Taxation
• Operational Efficiency & People
• Operational Performance
• Revenue Analysis

In doing so we provide the following services: VAT/ Health checks, Excise Readiness, Finance and accounts review, Compensation & Benefits and HR compliance review, Operational/Performance Management and reviews. How we help Our Clients: MBC supports various clients: Manufacturers of consumer products, Distributors, Retailers, Agro and foodservice industries, through various service prepositions, from:

• Operating Model Design Enhancement – Internal audit
• Performance Assurance/ Performance Improvement Programs
• Supply Chain Audits and Optimizations
• Workforce framework review to meet industry standards – Organization Change, HR Transformation & Talent Management.
• Managing Integrated Categories (e.g. pricing, assortment management, promotions)
• Sales and marketing effectiveness
• Profit margin improvement
• Enterprise Resource Planning system implementation – Finance and ERP consulting

To know more about our implementation phases, contact us.