FMCG companies ramp up supplies across channels amid fresh covid curbs
Premium- Several states have announced night curfews. In Delhi, shops in all markets are open on odd and even days though essential shops in all states continue to remain open
New Delhi: Packaged goods companies are ramping up supplies and stocking up products across distribution networks, retail stores and e-commerce channels amid fresh covid-linked restrictions in several large states.
Chennai-based fast-moving consumer products company CavinKare said basis its past experience it is proactively stepping up production and ramping up stocks across retail outlets.
“In case there is a sort of spike in the third wave and resultant lockdowns, we are ramping up our production capacities, ensuring that for the quarter ahead, which normally is a good season quarter for FMCG, particularly personal care, and the beverages, we are able to get supplies to the market on time," said Venkatesh Vijayaraghavan, CavinKare’s, CEO and director.
Vijayaraghavan said the company has increased stock levels across the board—in e-commerce, modern trade, as well as in the general trade business, he added.
Several states have announced night curfews. In Delhi, shops in all markets are open on odd and even days though essential shops in all states continue to remain open.
Parle Products said it is increasing the buffer stock at its depots as well as manufacturing locations pan-India.
"What we have learned from the first two rounds, all those learnings are being put in place. Right from ensuring buffer at all the levels - from distributor who is closest to the market, asking retailers to buy more and stock more because we anticipate, some kind of increase in demand," said Mayank Shah, category head at biscuit maker Parle Products.
Shah said the company is ensuring buffer stock of raw materials like packaging materials to avoid any unexpected supply and commodity disruptions linked to the ongoing wave.
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Shahrukh Khan, executive director for operations at Dabur India Ltd, which makes Vatika hair oil and Real juices, said it has started building requisite inventory to maintain continuity of supplies.
CavinKare’s Vijayaraghavan expects the uncertainty in the spread to continue for at least a quarter. So far, the company has not experienced an impact from a business perspective.
Companies said they experienced supply chain and manufacturing constraints in the first half of last year that dampened sales.
ITC Ltd., the maker of Aashirvaad atta, Bingo chips and Vivel soaps, said micro-lockdowns are expected to be the norm if omicron-led restrictions increase. The company has been continuously taking stock of operations and monitoring market developments, a company spokesperson said.
The omni-channel presence by companies and brands has now become more important than ever, especially, in urban areas. “Apart from big e-commerce players, most brick-and-mortar retail chains and even local modern format stores and supermarkets have strengthened their e-presence given the reluctance of people to physically visit stores during the peak of covid," the ITC spokesperson added.
Manish Aggarwal, director, Bikano, Bikanervala Foods Pvt Ltd, too, expects e-commerce to structurally become a bigger channel where consumers are inclined to make their contactless purchases.
He said the company is “monitoring" the situation closely. “We have also ensured enough inventory in our manufacturing plants and stress-tested contingency plans across manufacturing and distribution. We have developed several muscles in the last two years—in terms of agility, resilience, healthcare, vaccination. Infrastructure has improved significantly. Now we are much better prepared," he said.
Retailers, on the other hand, are experiencing the impact of night curfews. “I hope that the lockdowns will not be very severe as timing retractions, for instance, can affect business hours. This can impact sales and footfalls by 10-15%," said Arvind Mediratta, managing director and CEO, Metro Cash and Carry, India. Mediratta said that with seating restrictions and timing curfews, the retailer is seeing a dip in its HORECA , that is, hotels, restaurants and café business.
The kirana business, that the retailer caters to, is unlikely to get impacted as several of its core customers are now digitized, Mediratta said. A third of its kirana business is coming from orders online.
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