With the 21 day lockdown coming into effect, people have been rushing to stock up on essentials and groceries in bulk. As a result, fast-moving consumer goods (FMCG) have been witnessing an unprecedented surge in demand in India. To ensure there is no shortage of essential supplies from the biggest FMCG brands to niche startups, all have beefed up their production.
But these players are constantly posed by multiple challenges. From manufacturing to distribution and even delivery roadblocks. There are challenges of third party manufacturers with limited capacities, supply chain, staggering shifts and most importantly ensuring safety protocols.
PC Musthafa of ID Fresh believes that the only way to cope with these hurdles is to focus on key products. "We decided to focus on key SKUs in key markets in key stores. Thereby reducing the number of hours and ensuring that safety of employees and customers are taken care of. Overall, we have seen 60-70 percent growth in sales but that is not something we should celebrate. It's not numbers but how many lives we have touched on a daily basis that gives us motivation. So last Saturday, for example ,we touched close to around 3 million people," Musthafa said.
While this is not the time to celebrate the growth in sales, Anuj Rakyan of Raw Pressery said company saw a 60 percent jump in revenues from February to March 2020 and a 120 percent growth in online grocery sales, believes that spike in numbers is only temporary.
He said, "These are early spikes that we are seeing right now in March because we fall into a healthy product category. And more consumers are flocking to stock up on goods that they consider to be nutritious. There is a lot of awareness about boosting immunity. These are early numbers though, fantastic to have an increased revenue but don’t think this will last very long."A rational take given the current scenario!
New FMCG Mantra: Take Each Day As It Comes
However for smaller players like Delhi-based Sleepy Owl, it’s all about taking each day as it comes. "We have shut down operations in terms of new manufacturing, but in the week leading up to the lockdown, we did ramp up manufacturing in the last week to ensure that there is a lineup of stocks and we continue our online supply as far as possible", says Arman Sood, co-founder of the coffee startup.
But this continuous supply of goods is only good if there is a continuous pick up from logistics partners. With every state imposing a different set of rules for delivery players, these are extremely trying times to be an FMCG entrepreneur who are in the business of producing perishable inventories that have limited shelf life. "My logistics partner managed to pick up orders but other partners did not pick up the orders. So we are taking each day as it comes," said Sood.
The Last Mile Speed-Bumbs
For most players, getting goods to the customer has turned into a nightmare. Even as the Centre and various states have assured essential service providers of cooperation by local authorities, there are still some gaps on ground.
While most states have decided to issue curfew passes, Delhivery’s CEO, Sahil Barua says going digital is the only way forward. "Local authorities are proactive in issuing guidelines and we have been able to open up most of our facilities again. However, going forward, authorities have to rapidly digitise this process as physical verification is extremely time consuming," Barua told CNBC-TV18.
Companies Don’t Work in Isolation
But the big question for the FMCG players remains, what happens once they run out raw materials and stocks. What happens to manufacturing facilities? "From manufacturing perspective, we keep getting different regulatory government orders on a daily basis and the situation changes everyday. For instance, we cannot manufacture in Mumbai, whereas Bengaluru and Hyderabad we are up and running," Musthafa said.
One thing is loud and clear, there is uncertainty around manufacturing and companies have to wait to see how this unfolds. While founders at this point unanimously feel that a short term pain is better than long term damage. Challenges aside, the main focus of the ecosystem to ensure that the supply of essential services and goods to the customer does not stop, through this 21 day lockdown.
First Published: IST