With restrictions easing across the country from June, sales of fast-moving consumer goods (FMCG) have seen a sequential jump of 23 percent in the first three weeks of the month, signaling a sharp revival in consumer demand in India.
This, after FMCG sales, declined by around 16.2 percent in April and by 31.6 percent in May 2021 when most states imposed stringent restrictions, according to data from retail intelligence platform Bizom. The bounce back in FMCG sales, Bizom said was driven by a 33 percent jump in active kiranas with them being allowed to remain open for longer hours.
Also, FMCG majors said they are seeing an upward trend as suggested in Bizom's data. Dabur, for example, said it is seeing an uptick in consumer demand with local markets opening up.
"The drop in coronavirus cases has not only boosted consumer sentiments but also helped the supply chain recover from the COVID-19-induced disruptions. We are seeing a tailwind for our healthcare portfolio, particularly in rural India, with demand growing for chyawanprash, honey and immunity-building Ayurvedic products," Dabur India CEO Mohit Malhotra told CNBC-TV18.
Bizom's data points towards a strong bounce-back in categories hurt during the second wave. Akshay D’Souza, chief marketing officer, Bizom said personal care, which saw the biggest drop in May 2021, is seeing the strongest recovery with sales up by over 50 percent on a month-on-month basis.
Another category that is seeing a strong bounce-back is confectionaries, sales of which are up 41 percent. Parle Products said it is seeing a very healthy demand for confectionaries, typically an out-of-home category, despite schools and colleges being shut.
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Krishna Rao, senior category head at Parle Products said the company is expecting a growth of higher single digits across categories in June both sequentially and on a year-on-year basis. This is despite the company seeing a steep rise in sales in June last year as unlock began, post the first set of lockdowns.
In fact, Bizom's data shows that confectioneries are showing a very strong bounce back, up 41 percent driven by in-home consumption. Beverages, which saw an abrupt halt in sales during their peak season in May 2021, bounced back registering a sequential growth of 30 percent. This has been evidenced with snacks and beverages major PepsiCo India saying that it has seen an increased demand for its product portfolio be it foods and beverages.
"While in-home consumption continues to remain strong, out-of-home or on-the-go consumption is reviving as the country continues to unlock. At PepsiCo India, adaptation and re–strategising of price-pack programmes, enhanced consumer engagement initiatives, doubling down on both B2C and B2B distribution models while maintaining 100 percent safety will be key drivers to meet our consumer needs to suit different occasions," a PepsiCo India spokesperson said.
Coming to packaged foods, this segment has shown a strong MoM double-digit growth in June 2021 on the back of a surge in 'Ready to Cook' products driven by in-home consumption.
Snacks major Bikanervala Food's Bikano which saw sales fall by 20 percent in May, is now seeing a recovery at par with last year in June. Manish Aggarwal, director, Bikano, Bikanervala Foods said the company is looking to close the quarter at Rs 200 crore.
However, in rural India, which was hit significantly in the second COVID-19 wave, Bizom said there is a shift towards lower price point products across all categories except commodities.
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"High-value products have seen a drop in share across all categories except commodities. There's been a significant price rise of up to 60 percent in various edible oil products which has increased customer price of products significantly leading to them having to buy higher-priced products. It does seem like the rural consumers are saving for emergency spending on healthcare while being cautious about all other spends currently," D’Souza said.