According to industry experts, high-demand products such as namkeen, confectionery, and sweets showed strong sales during the Diwali season, despite a slower recovery in under-pressure rural markets.
Manish Aggarwal, director, Bikano, Bikanervala Foods, said that the company saw extraordinary sales this holiday season. He added that the sweets and namkeen maker recorded a hike of 20 percent in sales and is growing at 18 percent year-on-year in this post-pandemic phase.
Desmond D’souza, senior director of sales at Mondelez India, also stated that during both Rakhi and Diwali, they saw strong offtakes across channels that were higher than last year, with premium leading the way.
Ironically, while key industry players claimed strong sales, data has shown a slowdown in demand.
As per the data shared by retail intelligence platform Bizom, packaged food sales value growth declined 8.3 percent in October this year when compared to October 2021. For the same period, value growth for confectionary fell by 16.7 percent.
Overall, the packaged foods did not live up to their potential for festival sales, even when compared to last year. This does seem to be the effect of consumers focusing on essentials more than ever in this festival season,” commented Akshay D’Souza, chief of growth and insights at Bizom.
At the same time, there was a Diwali ‘dhamaka’ in sales of branded commodities as well as chocolates & confectionery, but there’s a word of caution for categories like home care, personal care, beverages, and packaged foods, as sales of these have shrunk during October 1 to 24, on a month-on-month (MoM) basis.
When asked about how the rural market performed, Vinay Shrivastava, head of FMCG business at Udaan, said that the platform witnessed 2X growth on a YoY basis, primarily driven by sales from retailers across tier 2 and tier 3 cities and beyond.
Speaking on rural demand, Aggarwal said that the recovery process in rural markets will be gradual, adding that the company is positive that these markets will bounce back to pre-COVID levels.
D’Souza from Bizom said that rural consumers are buying cautiously due to the impact of inflation and lower agri-incomes driven by erratic monsoons affecting consumption. He added that the growth in the discretionary products category has been slow, and going forward, brands may need to shift their focus from price-led growth to growing by building consumption.
Also, the e-commerce platform saw a huge response and many repeat orders for combo and value packs from smaller cities and towns.Bikano’s Aggarwal also shared similar trends and said that consumers opted for smaller-priced packs since inflation pushed several manufacturers to hike prices and reduce the weight of the packs. They had deals where the selling price of combo packs was made more attractive than smaller packs. As a result, demand for combo packs was higher than that for small packs.