Holi sales will spark bumper summer for FMCG companies as consumers return to normal life

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Consumer goods companies expect sales to rise throughout the summer season after a “positive Holi performance”. They hope up to 40% of annual sales will come from the upcoming summer season after two years of slow sales due to Covid restrictions.

FMCG companies are expecting a pickup in sales amid the Holi festival this year to lead to bumper business in the upcoming summer season. They see a likely increase, with 40% of their annual sales over the coming summers, after two consecutive years of slow sales due to Covid-related restrictions and curfews. “Around 35-40% of total annual sales comes from summer season for FMCG businesses and but this year it may be more than 40% as COVID restriction has been lifted in major states of India,” said Azaz Motiwala, Founder and CMD, IKON Marketing Consultants Pvt Ltd.

Holi to trigger the purchase of these consumer goods

FMCG companies such as Parle, ITC, Bikano, BL Agro, Modi Naturals among others are hoping for a good summer season after a likely increase of up to 20% in sales and order volumes during the Holi festival. There will be an increase in demand for daily necessities, cooking oil, packaged food, frozen food, ice cream, beverages, etc. “There will undoubtedly be spillover effects from the good sales of Holi on the summer season. Consumers are hungry for a normal and regular life and once things start to settle down with Holi as the starting point, there will be a significant uptick this summer season and the upcoming festive season. Also, with the Met Department predicting a normal monsoon, we expect the overall sentiment to be extremely positive and that there will be a very good season ahead,” said Krishnarao Buddha, Senior Category Manager, Parle Products. The major FMCG expects around more than 30% of its annual sales for the entire summer season. “We see a higher selling velocity with the rise in temperature and it usually starts with the start of Holi,” he added.

Read also: https://www.financialexpress.com/industry/fmcg-companies-expect-holi-to-bring-20-jump-in-sales-heres-what-people-will-buy-most-this-festive -season/2449248/

10 to 15% increase in sales likely in summer

“At BL Agro, we expect sales to increase by around 10-15% during the summers during the Holi festival and also during the wedding season in the coming months. Generally speaking, since we go quarterly , the percentage of sales remains more or less even. There is a 30% increase in total sales compared to the first quarter, the same 20% in the second quarter and 25% in the third and fourth quarters, “said Ashish Khandelwal, CEO of BL Agro.

However, the surge in sales during this summer will be more in value while the volume will remain more or less stable. “Due to the weak base effect due to last year’s confinement, growth seems assured during the summer season. However, with the reopening of schools and offices, the convenience and discretionary out-of-home categories will grow faster. These categories could see an overall increase of 30-40%, while the staples/grocery category will be stable in terms of volume but will see growth in value due to inflation,” said Akshay Modi, Director General Manager of Modi Naturals Limited.

Will a series of price increases put the brakes on the summer sales?

Although there have been a series of price hikes on FMCG products due to rising costs of inputs, raw materials, etc., consumer goods manufacturers are confident that this will not have a drastic impact on sales during the summer season. “We have taken significant and proportionate price increases and in some cases we have taken two price increases. Luckily, they were well accepted by consumers and it didn’t really impact the topline. However, with the current situation between Russia and Ukraine, there is a possibility of further price increases which could impact overall demand,” Krishnarao Buddha said.

Many FMCG companies are skeptical of further price increases being accepted by end consumers, even though they believe there will be a surge in sales during the summer season. “Inflation will be a bit of a drag on the momentum of Holi which will carry over into the summer season. The geopolitical situation is driving up the prices of most commodities, especially edible oil, wheat, packaging materials and fuel. We expect further price spikes in key FMCG categories. Most FMCG companies will be forced to increase their prices after Holi so that the festive season is not affected,” Akshay Modi said.

Also read: https://www.financialexpress.com/industry/consumer-durable-companies-expect-strong-summer-season-this-year-feature-rich-products-to-drive-sales/2449684/

What can be the best pivot strategies?

While further price increases due to rising input costs seem inevitable, FMCG companies will have to manage to maintain sales momentum even after Holi throughout the summer season. “Most FMCG companies expect increased sales during Holi, which will eventually trickle down to the summer season. However, with changing consumption patterns and other macro factors, consumer goods companies need to re-evaluate traditional retail models To be successful in the future, FMCG companies need to focus on three key areas: building an agile digital supply chain network, leveraging data-based decision-making, data and seize new opportunities through partnerships,” said Manish Gupta, Lead – Products, Accenture India.

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