FMCG
Risks and Crisis Issues for
International Corporations in the FMCG
Sector – BRICS Countries
The fast-moving consumer goods (FMCG) sector in BRICS countries presents significant volume-driven growth opportunities, bolstered by rising disposable incomes, urbanization, and evolving consumer preferences. However, international FMCG companies face complex risk environments shaped by protectionist policies, volatile supply chains, and price-sensitive markets. Regulatory inconsistency, sudden changes in labeling laws, import restrictions, and localization mandates often increase operational costs and complicate market entry strategies. Government pressures to support domestic producers can tilt competition unfairly against foreign brands, particularly in food, beverage, and hygiene segments.
Over the past five years, market outcomes have diverged. Nestlé has seen sustained success in India and Brazil through localized product innovation and rural penetration strategies, while Procter & Gamble expanded in China by aligning with digital distribution platforms. Conversely, Danone exited its dairy business in Russia in 2023 under mounting regulatory pressure and political intervention—losing control of assets amid post-sanction economic restructuring. South Africa’s economic stagnation and energy crisis have disrupted FMCG logistics and chilled consumer spending, impacting multinationals like Unilever. In China, rising nationalism and data security laws have created reputational risks for several Western brands, driving increased scrutiny and online backlash.
The FMCG sector is especially vulnerable to macroeconomic shocks and shifting consumer sentiment. Inflation, currency devaluation, and political instability can erode margins and force companies to reprice, repackage, or exit segments entirely. Operationally, unreliable infrastructure, inconsistent cold chains, and regional disparities in consumer access can impair distribution efficiency. Furthermore, rising ESG expectations, plastic packaging bans, and supply traceability requirements are placing pressure on foreign firms to adapt quickly to evolving regulatory and social standards.
5 Key Risks
to Consider before Entering BRICS FMCG Markets:
1. Regulatory and Compliance Risk – Frequent changes in standards for labeling, packaging, ingredients, and advertising.
2. Supply Chain and Infrastructure Risk – Poor logistics, regional disparities, and unreliable energy or cold chain support.
3. Macroeconomic Instability – Inflation, currency volatility, and low consumer resilience to price fluctuations.
4. Nationalist and Political Risk – Preference for domestic brands, social media backlash, or state interference in foreign operations.
5. ESG and Sustainability Pressures – Rising demands for environmental responsibility, waste reduction, and ethical sourcing in local markets.
TO GO FURTHER
CRISIS MANAGEMENT
Know-How, Tools & Resources for Crisis Resolution
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Crisis Assessment & Source Identification
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Crisis Management Coordination
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Crisis Containment & Damage Control
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Crisis Communication & Media Kit
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Crisis Cell Infrastructure
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Crisis Simulation Training [New]
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Business Recovery Plan & 361° Review