FMCG companies across India observed an increase in demand in the past two weeks as consumers stocked up in the wake of the rise in Covid-19 cases and have ramped up supplies to their stockists to avoid supply shortage of goods and services. There are a few FMCG companies like Parle Products, Dabur India, and ITC, which are already facing inflationary pressures, are keeping extra stock of raw materials to avoid any disruptions in the supply chain during the new wave of the pandemic.
The FMCG makers also expect the ongoing increase in Covid cases, and the restrictions put by local bodies in some states would again impact the demand for ‘out of home’ channels products. However, demand for home consumption and immunity products will increase for a period.
Leading FMCG companies to rely on the eCommerce platform completely
Most of the major FMCG companies are planning to fully digitize themselves and trying to promote their products on the different eCommerce platforms. They are aware that very soon, Indian consumers will be purchasing the products online for their convenience.
While commenting on the current scenario, Mayank Shah, senior category head at Parle Products, said, “In the last two weeks, we have seen a 10-15 percent increase in demand in the market. We understand there is a bit of pantry loading as customers do not want to venture out. In fact, we have even asked our retail partners to keep more stock to ensure supplies. Also, at our factories, we have kept an extra stock of raw materials just in case there are disruptions in the supply chain.”
Having similar views, Dabur India chief executive officer, Mohit Malhotra, said, “We are also applying learnings from last year on streamlining the supply chain to ensure minimal disruption in supplies and have already begun building requisite inventory to avoid any supply and commodity disruptions due to the ongoing wave.”
To keep their staff members safe and healthy, Dabur has already reinforced Covid-safe behavior, safety, and hygiene measures at its manufacturing units.
Apart from big eCommerce players, most brick and mortar retail chains and even local modern format stores/supermarkets have strengthened their ePresence and given a path to the consumers to purchase the products online and avoid visiting the stores during the peak time of Covid-19.
“In anticipation of stricter measures by the concerned local administration and disruption in the supply chain due to a large number of people getting infected in the value chain, pantry stocking by consumers in the last one week has been witnessed for staples, packed food items including our edible oil,” N Krishna Mohan, director of Emami Agrotech said.
“The company is taking all steps to ensure that deliveries are smooth and our products are available both on the shelves and on eCommerce platforms. However, consumption across the HoReCa (hotel, restaurant and catering) channels is seeing a bit of stiffness as out of home consumption has drastically fallen,” he added.
However, Edelweiss financial services executive vice president Abneesh Roy said, “The level of pantry loading this time will not be as heavy as in the previous two waves. Not much pantry loading will happen as there is unlikely to be any total strict lockdown.”