As FMCG makers struggle with logistics, private labels & local brands get a break

“There are some challenges in securing sufficient supplies due to production shortages from manufacturers or transportation of the products to our locations, but we are working closely with our suppliers and with the local authorities to minimise and address these challenges. In order to ensure that our members can seamlessly procure essential items across categories, we have also ramped up new product development in our private brands segment and fast-tracked commercialisation of products such as sanitizers, liquid washes and bulk packs of staples,” a Walmart spokesperson said.

Similar steps are being taken by online grocers too. Bikram Singh Bedi, president—strategy and new initiatives, Grofers, said recently that the Gurgaon-based online grocer has stepped on the gas pedal for its private label.

“We have ramped up manufacturing significantly (for our private label). With this, we are able to ensure that any shortage of supplies from large national brands is supplemented with our private labels. In times like this, direct control over supply with the manufacturer helps,” Bedi pointed out.

Smaller mom-and-pop stores and kirana shop owners are also struggling with acquiring stocks of well-known brands.

“We had ordered around 50 sacks of 5 kg atta (wheat flour) of a well-known brand. Earlier, the stock used to last a week before we had to order again. This time around, it sold out within an hour. And now that brand’s distributor has asked us to wait at least 15 days before the next stock comes,” a grocery chain shop owner in Greater Noida said, adding that locally packed wheat flour was being stocked at his shop for the time being.

The condition is the same for other items, such as rice, biscuits and even jam. Many big brands such as Dabur India and ITC have expressed difficulties in procuring raw materials and supplying finished goods to the market.

Another grocery shop owner in East Delhi said that some local brands have started pushing their products to shopkeepers, and because of lack of top brands, products like biscuits, jam, tomato ketchup, etc. of even lesser-known brands were selling
like hot cakes.

As of April 6, Dabur India had reported logistical issues, and had said that while the central government had issued guidelines to ensure smooth passage of goods, the implementation on ground was still short of the mark. “Proper implementation of these guidelines on the ground would ensure seamless movement across states and enable timely delivery of these essential products to end-consumer households across India,” Shahrukh Khan, the company’s executive director of operations, had then told The Indian Express.

Executives at other MNCs said that they were trying to onboard more local suppliers and white label production units to overcome the logistical challenges of sending their own product to all markets of the country.