After the second covid wave, India’s FMCG market recovered faster as compared to the first wave a year ago, helped by higher sales of packaged food, commodities and discretionary categories even as growth of the home care segment slowed down.
According to the latest report by Bizom, a sales automation firm that transacts with 7.5 million retail stores, the July-September quarter saw 46% growth in total sales by value as compared with a 6% increase in the corresponding quarter last year, which marked a recovery in the segment that was affected due to supply and manufacturing constraints that began at the end of March 2020.
“Lockdown was not as stringent and the subsequent opening up saw sales rebounding quickly during the quarter despite a strong base last year. However, a dull December quarter may be expected due to alternative and home-made food products during the festive season, said Krishnarao Buddha, senior category head at Parle Products, India’s largest food company.
Also, comparatively moderate restrictions helped steady product supply and distribution of products during the second wave, with an immediate increase in economic activity after the easing of restrictions. Local control measures by state administrations helped ensure strong restrictions only in pockets that had high rates of infection.
Discretionary categories such as confectionery and packaged foods were severely affected last year, but these have shown the strongest growth this year. “The only category that seems under any kind of growth pressure this year is home care, where due to the falling number of Covid cases, the obsessive focus is shifting from health and hygiene products.
Out of home, consumption of fast-moving consumer goods products has also bounced back since August, with an increase in mobility, the opening up of offices, hotels, restaurants, and a rise in travel and social events.
Sales have been robust over the past few months, but hotels, restaurants, and caterers have come back strongly, which has led to higher growth both sequentially and year-on-year. The only challenge is increasing raw material prices, as it will be difficult to pass on higher input costs to end consumers, “said R.S. Sodhi, managing director of AMUL. He also said learnings from last year helped ensure consumers did not pantry load this time, which meant steady growth every sequential month.
The operator of the DMart retail chain said its standalone sales grew 47% year-on-year during the second quarter.