FMCG Logistics Market Size, Share & COVID-19 Impact Analysis, By Transportation Mode (Railways, Airways, Roadways and Seaways), By Product Type (Food & Beverages, Personal Care, Household Care, and Other Consumables) and Regional Forecast, 2021-2028

The global FMCG logistics market size was USD 103.57 billion in 2020 and is projected to grow from USD 105.85 billion in 2021 to USD 131.54 billion in 2028 at a CAGR of 3.15% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a growth of 2.20% in 2021. The slow growth in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Fast moving consumer goods is the largest collection of consumer goods with the different product categories including health, home, personal care, food, drinks & daily needs and many others. FMCG logistics is the process of transporting daily usable consumer products from one place to other. Proper management through the supply chain activities in each region, storage and transportation services helps this industry to achieve their business goal.

Owing to the increasing consumer demand, the FMCG industry needs to achieve rapid supply chain cycles. Yet, at the same time, the industry has to exert tight price monitoring to compete and manage fluctuating warehousing needs caused by seasonal trends. With fierce competition among consumer goods, the logistics companies are required to provide cost-effective and professional logistics solutions to supply chain operations.

Supply Chain Disruption Due To COVID-19 Impact to Impede Market Progress

The global impact of the COVID-19 disease has had a severe impact on the supply chain and logistics industry, as it had been stalled due to the rapid spread of COVID-19 in the world. The lockdowns and halt in production of many automotive sector has caused severe impact on the industry and all other industrial value chain members involved. According to Institute for Supply Management research, supply chain disruptions have sprouted up all over the globe, and 76% of businesses have had to reduce revenue targets by an average of 23%. Companies who never gave a thought of going online now have to go online. At the same time, some retailers were prepared with an established online presence to meet this new reality. The major leading player operating in this business are actively involved in activities to overcome the uncertainty caused by the pandemic by incorporating safety and precautionary measures into the consumer goods logistics business.

It is worth noting that considering the type of the industry, companies are optimistic that once the pandemic situation eases out, this market is set to rebound rapidly. Although it is difficult to anticipate the pandemic's span, the arrival of the COVID-19 vaccines in early 2021 is likely to favor the logistics and supply chain industry.

LATEST TRENDS

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Increased Diffusion of E-commerce in FMCG Business to Set a Positive Trend for Market Growth

Buying and selling of goods using the internet is referred to as E-Commerce. E-commerce currently contributes approximately 7% of the global FMCG market. It alters the global retail industry by providing various shipping options, including tracking options and easy returns, and visibility of inventory status and expected delivery time. Additionally, online grocery stores and retailers, such as Flipkart, Big Basket, and Amazon, help fast moving consumer goods be readily available with different discounts, festive sales, and same-day delivery options.

Moreover, due to the introduction of the ‘direct-to-consumer initiative by FMCG companies, a consumer can order fast moving consumer goods direct to the home through an online channel, the market growth is propelled. For instance, in May 2020, PepsiCo launched two direct-to-consumer websites where shoppers can order the company's products. In August 2020, Storia Food & Beverages also launched shop.storiafoods.com, a direct-to-consumer e-commerce initiative. Therefore, consumer goods companies and e-commerce platforms tie-up with logistics providers to deliver goods quicker and more cost-effectively, thereby driving the growth of the FMCG logistics industry. 

DRIVING FACTORS

Rising Use of Advanced Technology in logistics To Drive Market Growth

Advanced technology such as IoT, robotics and their use in fast moving consumer goods applications have entirely changed this industry. Companies have started equipping their FMCG supply chain by incorporating these technologies, including machine learning, big data and many others. Further, implementation of such technologies has resulted in reduction in lead time.  

For instance, in September 2019, FedEx company collaborated with more than 2 companies including Wing Aviation LLC and Walgreens, a retail pharmacy company, for the launch of drone based delivery service in Virginia, U.S. Moreover, as internet of things (IoT) has helped many freight forwarding companies and consumers by providing them direct real time access of information. Therefore, their implementation is expected to propel the FMCG logistics market growth.

Changing Consumer Habits And Lifestyles Coupled With Rising Disposable Income To Boost Market Growth

Earlier, the trend of shopping with the physical visit has seen changing due to the online shopping facility and online processes. Changes in consumption patterns and lifestyles, growing disposable income, and improved purchasing power ensure exciting growth opportunities for this industry. Furthermore, rapid urbanization, increase in income, and growth in the organized retail sector drive consumers' food & beverages consumption. Hence, these factors are anticipated to boost the consumption of consumer goods, products, and services, thereby offering extensive opportunities for this market.

Emergence Of Logistics Automation Coupled With Last-Mile Deliveries To Boost Market Growth

The final step in the logistics and supply chain flow of delivering goods from a distribution center or facility to the end-user is ‘Last Mile Logistics.’ The efficient last mile deliveries facility is witnessing a significant surge in the logistics industry, with the continuously increasing proliferation of e-commerce companies. In addition, getting the package delivered within the same day of delivery results in the growth of last-mile delivery services. Moreover, e-commerce industries also emphasize last-mile delivery options across logistics industries due to the rise in fast moving consumer goods, such as groceries, perishables, personal care and food & beverages. Furthermore, efficient last-mile deliveries are another opportunity for logistics companies; that is anticipated to fuel the market growth. For instance, in January 2021, Mahindra Logistics (MLL) launched a cargo last-mile delivery service under the brand name ‘EDel’ for e-commerce, FMCG, and other markets.

RESTRAINING FACTORS

Absence Of Control Of Manufacturers And Retailers On Logistics Service Can Restrain Market’s Growth

By opting for logistics service, manufacturing or retailing company has to rely on the competency, honesty, and reliability of logistics service providers, which results in a lack of direct control. In several cases, a severe threat is possessed to the quality of products, primarily for perishable goods, as the manufacturer or retailer cannot monitor the operations at the warehouse. Moreover, in case of lack of transparency, outsourcing to a third-party logistics (3PL) could potentially lead to a breach of confidentiality, resulting in the exposure of customer personal data or the sharing of commercially sensitive information. Therefore, a lack of control of manufacturers and retailers on logistics services is anticipated to hinder the growth of this market.

SEGMENTATION

By Transportation Mode Analysis

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Roadways Segment Dominates Market Due to its Extensive Adoption

Based on mode of transportation, the market is segmented into Railways, Airways, Roadways, and Seaways.

The roadways segment holds the largest share globally and is expected to retain its leading position in the market throughout the forecast period. Roadways are one of the most common modes of transportation. It is widely used in Europe, Asia, Africa, and North America. A single customs document process provides a seamless movement of goods even across various states and countries. It offers complete door-to-door service, and it is one of the most economical means of transport. However, road transport is limited by weight restrictions. Another limitation is that it is affected by weather, road conditions, and traffic. The seaways segment is expected to highest CAGR during the forecast period in the market. Seaways transportation is a less expensive method of shipping goods, but needs a longer transit time. Railways and airways, are expected to show steady growth during the forecast period. Trains burn less fuel than road vehicles and also can have multiple wagons, which only needs one driver. However, at each end of the rail transit, there will be a lift cost to transfer the container between the train & the road vehicle and also road delivery will be needed. These factors may hinder the growth of railways. In addition, airways have many advantages such as Quick transit, less documentation, enhanced level of security for the cargo. However, it is expensive than other mode of transports and also has size and weight limitations.

By Product Type Analysis

Food & Beverages Segment to Hold Huge Market Share Attributable to Various Food and Beverage Industry Segments

The market is segmented into food & beverages, personal care, household care, and other consumables based on the product type.

The food & beverages segment accounts for the largest FMCG Logistics market share in the global market. The dominance can be attributed to several different food and beverage industry segments, including dry packaged goods, beverage, cheese/dairy, frozen foods, ingredient suppliers, and meat processors. Many company sizes ranged from multi-billion dollar organizations to those with a few hundred million in revenue, with the vast majority being USD 500 million and above.

The survey done by Tompkins Associates, McHugh Software, and Symbol Technologies shows that most food and beverage executives have adopted these new supply chain processes. The corresponding investment in new technologies is a strategic priority. However, there is need to focus on operating cost reduction and functional excellence in distribution & transportation.

Climate-controlled storage and transportation, advanced warehouse management systems, advanced packaging solutions, tracking technology for product safety, etc. are some of the necessities associated with food and beverage logistics. The cost associated with these technologies could hinder the market; however, food and beverage companies are operating in a time of tremendous challenge and tremendous opportunity, which will ensure the market’s growth. The personal care products include skin moisturizers, shampoos, perfumes, lipsticks, eye and facial makeup preparations, hair colors, and toothpastes. Household care products include batteries, stationery, paper products, cleaning products, Laundry products and dishwashing products. The personal care and other consumable segment in the market is mainly driven by ageing population and increasing per capita expenditure on beauty & personal care. After the COVID-19 pandemic, consumers have become more conscious about personal & home hygiene, and the demand for laundry care, and house care products, is expected to witness promising growth. ​

REGIONAL INSIGHTS

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Asia Pacific region is expected to exhibit the highest CAGR during the forecast period in the market. The sector has been witnessing steady growth, driven by higher spending power among the middle-income class and declining cost of production, which was a result of commoditization. The projection of rapid growth for the higher-end services in China and emerging markets suggests more extensive changes in the contract logistics market, including greater demand for pricier consumer goods and perishable foods that require logistics management that includes better security and handling. Southeast Asia is rapidly becoming a choice destination for growth opportunities in the consumer goods market. Indonesia is the largest market in the region, while the Philippines is the fastest-growing one.

North America holds the second-largest position in the market as the presence of a diverse coastline is sanctified with a wealth of cruising destinations. The U.S. ranks first in this regional market as significant logistics and supply chain locations are situated. As the U.S. reopened after a strict lockdown due to the COVID-19 pandemic, the logistics industry started showing signs of recovery. According to the June 2020 Logistics Manager's Index Report, the logistics industry is continuing to recover from April’s all-time low overall score of 51.3, following May’s reading of 54.5, with an overall LMI score of 61.7, the highest reading since February 2019.

Europe region is expected to be the fastest-growing region in the forthcoming years. The growing FMCG industry in Europe, growing e-commerce market in Europe, and increasing technology adoption in the logistics industry will offer immense growth opportunities. Increasing mergers and acquisitions in the logistics industry, increasing focus on truck platooning by logistics vendors, and rising adoption of sharing economy will significantly influence the market growth in this region. However, the lack of skilled drivers, high cost of operations, and high cost of technological investments may hinder the market growth. To grow more, vendors should focus on growth prospects in the fast-growing segments while maintaining their positions in the slow-growing segments.

The rest of the world consists of Latin America, the Middle Eastern, and the African region. The middle eastern region is expected to contribute significantly to the growth of the market. This can be attributed to the early adoption of advanced technologies in the FMCG sector which have sensed opportunities in the logistics and supply chain industry.

KEY INDUSTRY PLAYERS

Collaboration With Automotive Leaders By One Network Enterprises (ONE) To Brighten Its Market Prospects

One Network is an intelligent business platform for the autonomous supply chain management. This platform enables leading global organizations to achieve tremendous supply chain network benefits and efficiencies across their ecosystem of business partners. They have demonstrated the immense value to be gained from matching supply to demand and collaborating on a real-time, multi-party network.

In March 2021, One Network Enterprises (ONE) announced that its customer Cummins Inc., a global power leader, has gone live on the One Network Platform with attribute-based forecasting, multi-tier inventory optimization, and integrated inbound supply visibility. Using One Network’s platform and industry-leading Supply Chain Control Tower solution, Cummins is improving real-time visibility across European Aftermarket operations, enabling the company to identify and optimally resolve potential issues before they occur quickly.

LIST OF KEY COMPANIES PROFILED:

• DHL Group (Bonn, Germany)


• Kuehne + Nagel (Schindellegi, Switzerland)


• C.H. Robinson (Minnesota, U.S.)


• Ceva Logistics (Marseille, France)


• FedEx Corporation (Tennessee, U.S.)


• Nippon Express (Tokyo, Japan)


• DB Schenker (Essen, Germany)


• Agility Logistics (California, U.S.)


• Bollore Logistics (Puteaux, France)


• FM Logistics (Roissy-en-France, France)

KEY INDUSTRY DEVELOPMENTS:

• July 2021 – Italy-based OMLog, a third-party logistics provider for luxury fashion products, signed a 607,279-square-foot warehouse at Bridge Point 78, New Jersey, a development that straddles Phillipsburg and Lopatcong Township, commercial real estate services firm CBRE announced Wednesday.


• June 2021 – Fruit of the Loom, a textiles and sporting goods company headquartered in Bowling Green, is expanding its operations at 540,000 sq. ft. Bowling Green distribution center with a 203,000 sq. ft. addition. Founded in 1851, Fruit of the Loom has become a household brand and has created hundreds of jobs in the Bowling Green area since it first established deep roots here in 1940.


• May 2021 – SupplyOn, the supply chain business network for the automotive, aerospace, railway, and manufacturing industries, has been recognized as a Leader in Gartner Magic Quadrant “Multienterprise Supply Chain Business Networks” for the third time in a row.

REPORT COVERAGE

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This market report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, product types, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors contributing to the market's growth over recent years.

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