FMCG businesses have seen an increase in demand over the past two weeks as consumers stocked up on the rise in COVID-19 cases across the country, and increased the supply of their stockists to avoid a supply shortage.
Companies such as Parle Products, Dabur India and ITC, which are already facing inflationary pressures on inputs, are keeping additional stocks of raw materials to avoid supply chain disruption due to the new wave of the pandemic , building on their lessons from the last two waves.
FMCG makers also expect a sudden increase in COVID cases and some restrictions imposed by local authorities in some states to once again impact demand for out-of-home chain products, which is on the rise. was recovering from recent months, although the demand for home consumption and immunity products will gain for a few weeks.
Also read: Tata Consumer Products, Dabur and other FMCGs Expect Better Growth in 2022
Businesses expect even further accelerated digitization – e-commerce and omnichannel presence with technology platforms that are expected to play an important role in ensuring a continuous and uninterrupted supply of FMCG products.
âOver the past two weeks, we’ve seen a 10-15% increase in demand in the market. We understand there is a bit of a load in the pantry because customers don’t want to venture out, Mayank Shah, senior product category manager at Parle, told PTI. .
The main cookie company has kept buffer stocks ready, he said.
Moreover, we have even asked our reseller partners to keep more stock in order to ensure supply. In our factories too, we have kept an extra stock of raw materials in case there are any disruptions in the supply chain, âadded Shah.
Expressing similar views, Dabur India CEO Mohit Malhotra said the company has also ramped up supplies and increased pipeline inventories in anticipation of any disruption due to the rapid spread of the Omicron variant.
We are also applying lessons from last year on streamlining the supply chain to ensure minimal disruption in supplies and have already started building the required stocks to avoid disruption of supply and commodities due to the wave in progress, he said.
Dabur has already strengthened COVID-safe behavior, safety and hygiene standards within its manufacturing operations to keep employees and workers safe.
âOur units are also equipped with oxygen concentrators to deal with any emergency in the event of a third wave. We will take all necessary measures to protect the health of our employees, he added,
An ITC spokesperson said the company continually provides updates on its operations and monitors market developments.
The robustness and agility of our supply chains along with our distributed manufacturing footprint along with accelerated digitization allow us to ensure a continuous and uninterrupted supply of our FMCG product line and meet the needs of consumers in all areas. changing circumstances, âadded the spokesperson.
All strict hygiene precautions and protocols remain in place both in ITC offices and factories, including all-time masking, disinfection, safe removal, and quarantine in the event travel or contact.
Noting that the omnichannel presence of businesses and brands has become more important than ever, especially in urban areas, the ITC spokesperson said, âEmerging channels like e-commerce are gaining ground with penetration and increased adoption. “
Aside from the big e-commerce players, most brick and mortar retail chains and even modern-sized local stores / supermarkets have stepped up their electronic presence given the reluctance of people to physically visit stores during the peak of COVID-19, the spokesperson added.
Emami Agrotech, the edible oil maker and part of the Kolkata-based Emami group of companies, said the surge in the current COVID wave with the spread of the Omicron variant is a major concern for all.
“In anticipation of stricter measures from the relevant local government and a disruption in the supply chain due to large numbers of infected people in the value chain, the storage of pantries by consumers at Over the past week has been observed for commodities, packaged foods including our edible oil, âsaid Emami Agrotech director N Krishna Mohan.
The company takes all measures to ensure that deliveries are smooth and that our products are available both on shelves and on e-commerce platforms, he added.
âHowever, consumption on the HORECA channels (hotel, restaurant and catering) is experiencing a bit of rigidity as out-of-home consumption has decreased considerably,â added Mohan.
Edelweiss Financial Services executive vice president Abneesh Roy, however, said the pantry load level this time around will not be as heavy as in the previous two waves.
âThere won’t be much pantry loading because there is unlikely to be a full strict lockdown. (In) wave 2, pantry loading also barely took place, did he declare.