Westford, USA, Aug. 25, 2022 (GLOBE NEWSWIRE) -- In the year 2021, the average R&D intensity of the Top 20 FMCG Companies is 2.9%. Ranking 8th in the Top 50 FMCG investors in R&D, L’oreal invested USD 1.18 billion in it, from the USD 33.9 billion revenue generated in 2020-21. Vilmorin & Cie SA has registered the highest R&D intensity rate in 2021, evaluating at 16.47%. V&C SA’s revenue was USD 1.7 billion and the R&D investment was USD 0.28 billion. This is followed by major players who follow closely behind like KWS Saat SE with 15.09% R&D intensity.
Our analysts observed that The Procter and Gamble Company had the highest R&D investment in 2021. The investment amounted to USD 1.90 million. The Y-O-Y growth of the R&D investment is seen to be 2.04% in the year 2021 with 1.45% R&D intensity. A total of USD 16.9 billion has been invested in R&D in 2021 where FMCG industries are considered.
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Besides, there was skyrocketing increase in R&D investment seen as Shiseido Company Ltd. has seen a growth rate of 39%, topping the list of FMCG top players between 2020 and 2022. Walgreens Boots Alliance has registered the highest growth in Y-O-Y R&D investment with around 44% investments in R&D between the years 2020 and 2021.
Research and Development (R&D) expenditure is a crucial factor in the development of any industry. While industries should focus on maximizing their profits, a chunk of it can be gained from correctly utilizing the revenue generated for further investments. R&D intensity or the ratio between a company’s investment in R&D and its revenue is the key factor for FMCG companies to stay competitive and relevant in the growing market.
The Top Global 50 FMCG Players are focusing on investing their revenue in R&D. It is important to note that R&D is the basis of the product lifecycle and in a fast-paced market with ever-growing consumer demands, aligning and remaining updated with the needs of the consumers is essential. R&D intensity is stressed in the Fast Moving Consumer Goods (FMCG) market to stay competitive by spending a good portion of the revenue on researching and developing new products and services or upgrading existing ones.
Many players are gradually starting to focus on increasing their R&D intensity as market needs are on a change post-pandemic. Many companies like Unilever, Johnson and Johnson, and Coca-Cola are spending billions a year in R&D investments alone.
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After in-depth research, our analysts found that in the FMCG industry, sustainability is the major trend that calls for R&D and subsequently investments in it. With most FMCG companies focusing on enhancing their packaging, they are increasing their interest and investment in different environmentally friendly packaging like mono-material packaging or adopting organic or bio-based ingredients to stay relevant in the market. This not only showcases the value of sustainable packaging but also compels consumers to recycle.
The major players of FMCG like Vilmorin, LO’real, Kirin Holdings, Kao Corp., Kerry Group, and Shiseido are dominating the industry when it comes to the highest R&D intensity presented as of 2021. They are focusing on highly maintaining the growth of their companies by investing in trending and innovative activities that are embracing the current market.
How to strategize your business needs and align them with an increased interest in R&D?
We at SkyQuest Technology have identified the relationship between the companies who are dominating the market as compared to the importance provided by them to R&D, and consequently the rise or fall in R&D intensity. It is paramount to identify the companies that are increasing their R&D intensity respective to the preceding years and how that is faring for their individual benefits, profits, and overall growth. Identifying the relationship between the shift in consumer demands to the R&D intensity is beneficial for the growth of a business. What M&As are targetting, and how they are playing out with the rate of the increase in R&D intensity by each company is something to be delved deep into before strategizing according to your business needs.
As per the research done by Sky Quest Technology, the year-on-year growth of the top players has been compared to that of their R&D investments, and if there is a rise or decrease in the rate of R&D by the respective companies.
Sky Quest’s research also finds that companies are more focused on investing in R&D than investing in advertising old products. Spending more on innovation and introduction of new technologies like consumer-friendly services, providing product surveys, providing online shopping support, and readiness in solving consumer issues are a few of the vast innovations that change the interest of consumers and push them towards choosing one brand over another.
Sky Quest has analyzed the global top 50 FMCG players and based on in-depth research on their activities, an analysis is prepared. Our analysts help you in benchmarking your R&D budget. We strive to provide help with the allocation of your budget, keeping in mind the recent developments and what will most benefit your business.
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Innovations from R&D that attract consumers and investors alike:
- sustainability (environment & packaging)
- tackling plastic pollution,
- IoT (Internet of Things), Digitalization, AI (Artificial Intelligence),
- retail execution,
- emerging technologies,
- improvement of existing products,
- zero waste,
- biodegradability,
- technological advancements, and
- reduction of carbon plastics.
Key Players of the market with high R&D Intensity:
- ITC
- Nestle SA
- KAO Corporation
- Koninklijk Ahold Delhaize NV
- Philip Morns
- Shiseido Company
- The Procter & Gamble Company
- Unilever NV
- L'Oréal SA
- Kinn Holdings Company, Ltd
- Reckitt Benckiser Group plc
- Palmolive Company
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