2020-07-13 18:42:00
FMCG

NEW DELHI: It may sound counterintuitive given the prolonged countrywide lockdown, but household expenditure on fast moving consumer goods (FMCG) went up during March-May when compared to the same period year ago. According to a report by data, insights and consulting company Kantar, Indian households’ expenditure on food, health and home care products rose 4.3% during the covid-induced lockdown.

The pandemic and the fear of catching the infection prompted shoppers to make fewer trips to grocery stores, indicating pantry-loading, Kantar said. The number of trips to grocery stores went down from 34.3 to 30.5 during the same period. Fewer trips, however, translated into bigger ‘trip size’ described as volumes bought per trip resulting into value growth for companies.

“Households definitely spent more on FMCG products during the lockdown as compared to last year. The money was spent on food, beverages, health and hygiene and even home care products,” said K Ramakrishnan, managing director at the Worldpanel division of Kantar. Personal care categories, however, took a hit both in urban and rural India, the report said.

Among packaged foods, Parle Products, the maker of Parle-G biscuits, for instance reported a surge in sales during the lockdown. The company’s market share expanded 500 bps and it registered better-than-expected growth during March to May, Mayank Shah, category head, Parle Products, had told Mint earlier.

Shah said consumption was high as people bought more during the lockdown and hoarded food items.

Britannia Industries, too, sold more packs of biscuits in April and May, posting a 20% and 28% growth in sales, respectively. This was on account of increased in-home consumption of its products.

Marico Ltd’s Saffola cooking oil also registered strong growth during the quarter as consumers cooked more at home during the lockdown. Other FMCG firms also saw shoppers hoard large packs of staples and home-care products during the first phase of India’s lockdown, Adani Wimar’s deputy chief executive officer, Angshu Mallick, had said in an interview earlier.

Mallick had added that initially consumers were stockpiling so bulk packs did better. Later, the company’s ratio of consumer packs and bulk packs changed from 65:35 to 85:15. “This is because we are seeing more people buying smaller packs and also because restaurants and hotels are closed.”

“While FMCG companies saw increase in home consumption of staples and other essentials, for them the revenue from the hospitality segment or HORECA (Hotel, Restaurants, Cafes) remained nil, said Ramakrishnan.

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