FMCG firms increase shipments as coronavirus-induced restrictions return



NEW DELHI : Packaged goods companies resume inventory and store products in retail stores and e-commerce channels as Covid-related restrictions emerge in several large states.

Chennai-based fast-paced consumer goods company CavinKare said it is proactively increasing production and increasing inventory in retail stores.

“In the event that there is a kind of peak in the third wave and the resulting lockdowns, we will increase our production capacities and ensure that for the coming quarter, which is usually a good seasonal quarter for FMCG (Fast Moving Consumer Goods), especially personal care and beverages, we can deliver to the market on time, “said Venkatesh Vijayaraghavan, CEO and Director of CavinKare.

The company has increased inventory levels in all areas – e-commerce, modern retail, and general retail.

Several states have announced nightly curfews. For example, in Delhi, stores in all markets open on odd or even days, although important stores remain open in all states.

Parle Products said it is increasing buffer stocks in its depots and manufacturing facilities across India.

“What we have learned from the first two rounds, all of these findings will be implemented. Starting with ensuring a buffer at all levels – from the dealer closest to the market to asking retailers to buy more and store more as we anticipate some surge in demand, ”Mayank said Shah, Category Leader at the biscuit company Parle Products.

Shah said the company is ensuring a buffer inventory of raw materials such as packaging material to avoid unexpected supply and raw material disruptions related to the ongoing wave.

Shahrukh Khan, executive director of operations at Dabur India Ltd, the maker of Vatika hair oil and real juices, said the company has started building the necessary inventory to keep supplies going.

CavinKare’s Vijayaraghavan expects the spread uncertainty to persist for at least a quarter. So far, the company has not experienced any impact from a business perspective.

Companies experienced supply chain and production constraints in the first half of last year that dampened sales.

ITC Ltd, the maker of aashirvaad atta, bingo chips and Vivel soaps, said micro-lockdowns are expected to be the norm as omicron-led restrictions increase.

A company spokesman said the company is continuously taking stock of business operations and monitoring market developments.

Omnichannel presence is more important than ever, especially in urban areas. “Aside from major e-commerce players, most brick-and-mortar retail chains and even local shops and supermarkets with a modern format have increased their e-presence as people are reluctant to physically visit stores during the height of Covid,” said the ITC- Speaker added.

Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt. Ltd also anticipates that e-commerce will structurally become a more important channel on which consumers will tend to shop without contact.

Retailers, on the other hand, are experiencing the effects of the nightly curfew. “I hope the bans won’t be very severe, as withdrawing schedules, for example, can affect business hours. This can impact sales and footfall by 10-15%, “said Arvind Mediratta, Managing Director and CEO, Metro Cash and Carry, India. Mediratta said the wholesaler is seeing a decline in its hotels and restaurants with seating restrictions and time curfews and cafe business.

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