The consumption pattern of fast-moving consumer goods (FMCG) witnessed a discernible trend across two distinct phases during the lockdown that started March 25. In the initial days, people stocked up on staples and essentials, and then there was a perceptible shift with higher demand for packaged food items like instant noodles, biscuits, chips and ready-to-cook meals.
In the first ten days of the lockdown, sales of essentials such as flour, rice, sugar, salt and oil shot up due to panic buying, according to executives from a number of leading FMCG companies The Indian Express reached out to. Moving ahead, this changed over the next 30 days as supply chain and production problems led to essentials like pulses and wheat flour not being supplied sufficiently. This led to people stocking up on products with longer shelf lives mainly on account of uncertainty over when the lockdown would be lifted.
“Nearly 43 per cent of consumers started hoarding or stocking up products across all categories at home. When consumers give such an indication, it becomes all the more important that the products are available in a seamless manner, and the supply chain is completely on top of demand,” Anil Talreja, Consumer Leader and Partner at Deloitte India told The Indian Express.
For example, in the first 3-4 days, Noida-headquartered Mother Dairy saw demand for liquid milk and other dairy products such as paneer, ghee, and butter go up by as much as 10 per cent of its total sales. Similarly, sale of all kinds of edible oil rose by as much as 50 per cent in the first week. “Frozen product categories like green peas, corn, mixed veggies, snacks and jackfruit also witnessed a steep jump in demand — as high as over 100 per cent,” said Sangram Chaudhary, Managing Director, Mother Dairy.
Over the next 30 days till May 3, however, certain segments such as instant noodles witnessed an almost 50 per cent year-on-year jump.
Change in perception
When there is panic, people stock up on staples like rice, flour and other essentials. But when uncertainty is prolonged and one can’t step out, they opt for solutions that make life easier — ready-to-cook food, chips, and nachos. Non-essentials too start becoming essentials.
“In the second phase, we saw an increased demand for packaged food such as noodles, biscuits, ready-to-make products, and hot beverages. Customers continued to buy staples and personal hygiene products too. This phase also led to the growth of local-label goods as the supply chain faced disruption and several FMCG companies were unable to deliver their goods,” said Arvind Mediratta, MD & CEO, METRO Cash & Carry India.
The partial lifting of restrictions for e-commerce companies to deliver non-essentials also prompted customers to make a beeline for certain products that became essential over time. According to online marketplace Snapdeal, key items the company shipped following the partial relaxations included personal grooming products, stationery products, steel utensils, apparel, footwear and electronics like power banks, phone and laptop chargers.
“Summer products including t-shirts, Bermuda shorts, skirts, cropped tops dominated the apparel category. Nightwear items like cotton night shorts, top and pyjama sets, nighties and night-suits, figure high on the shopping lists. Simple footwear like chappals and sandals is also being picked up by users,” a company spokesperson said.
The late growth in specific categories of food and retail goods could also be attributed to the fact that online grocers, shopkeepers and other organised retailers have been limiting their stock-keeping units (SKUs) to better manage the supply chain. This has mainly been on account of hurdles in transportation, and unavailability of certain mainstream brands.
Ready-to-cook meals, a surprise entrant in the high selling food items during the lockdown period, is likely to have benefited branded labels more with people taking extra precaution about health and hygiene. Tata Consumer Products, which has a range of ready-to-cook items, saw its sales jump up to 60 per cent year-on-year, the company’s head of marketing, Sagar Boke said.
Wafer, chips and nachos, which had an average shelf life of up to seven days in stores, have been selling out faster, with customers opting for the bigger stock-keeping units. For PepsiCo’s, Lays as well as Green Dot Health Foods’ Cornitos, the average per store orders almost quadrupled to 6-8 cartons per week from two cartons a week, earlier.
“We saw sales double in Delhi, Mumbai, and Bangalore in April. Home delivery and online ordering and delivery model helped us reach our customers,” Green Dot Health Foods’ Managing Director Vikram Agarwal said.
Fresh vegetables, fruits, and milk sales remained an outlier during the lockdown period of 40 days so far. “For fresh fruits and vegetables, the average daily demand has gone up from normal 160 metric ton to 230 metric ton, registering a 44 per cent growth, but during the initial lockdown period the demand had crossed 320 metric ton,” Mother Dairy’s Chaudhary said.
“As we go through a phased opening of the lockdown, we expect that last-mile retail segment, which has been only 50 per cent open across India, will start inching ahead to a 80 per cent number,” Odisha-based company Milk Mantra’s founder Srikumar Misra said.
However, the sales of discretionary food products, such as ice-cream took a hit with some companies recording nil sales in the month of April. “The distribution has been deeply impacted, because of which delivery to retail outlets has remained a point of concern and we have recorded almost nil sales in April,” Anindya Dutta, Managing Director of Ahmedabad-based Havmor Ice-cream said.
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