FMCG cos put covid learnings to practice
- Companies are examining redundancies in operations to eliminate delays
- Covid-19 prompted firms to ramp up supplies online and forge tie-ups with hyperlocal delivery partners
India’s top packaged consumer goods makers are imbibing lessons learnt from the covid pandemic to try and make their businesses more efficient. Executives at top FMCG companies said the disruption caused by the pandemic has prompted them to look at redundancies in operations and reduce the time taken to roll out new products and reach markets.
FMCG firms in India rely on extensive market research and a massive network of distributors and small shops to ensure products reach shoppers, but the lockdown upended their links to the markets.
However, with a surge in demand for packaged foods and personal hygiene products, companies have set up teams, created links with hyperlocal delivery partners, and helped get their products to stores.
While not all associations and learnings will stick, especially as markets gradually open up and stocks start to move, several firms will look at imbibing some of these changes in the way they function.
Chennai-based CavinKare, which launched new products such as sanitizers and a vegetable cleaner in record time, said it could look at cutting timelines for new product launches and even narrow lengthy test marketing processes going forward. The maker of Chik shampoo typically takes 18 months to launch a new product.
“Even before covid, one of the endeavours of the company was to cut this time frame. We had actually initiated internal action to be able to look at whether we are able to cut the period to a substantially lower time. To the extent that some of the categories we’ve been able to do in a month, that’s also probably to do with the formulation of the products. But now we are looking at the time frame where we can quickly crunch the 18-to-24 month period down to much shorter periods,” said Venkatesh Vijayaraghavan, director and chief executive officer-personal care and alliance at CavinKare. He said the firm allowed cross-functional teams to work together, thereby reducing duplication.
“One of the things that this particular experience of covid has done is bring the entire cross-functional teams, i.e. marketing, production, packaging, supply chains and R&D together, so we’re able to crunch timelines, eliminate some of the duplications that happened,” he said.
Covid also prompted firms to ramp up supplies online and forge tie-ups with hyperlocal delivery partners and even assist retailers by opening up helplines as the lockdown crippled the movement of goods.
More such direct-to-consumer, online-to-offline and vice versa, and hybrid models are likely to come into play, Russell Reynolds Associates, an advisory firm, said in a research note this week.
Moreover, there has also been a quick adoption of e-commerce channels to buy groceries. Typically, 87% of FMCG sales in India come from traditional or kirana stores. But covid is likely to change that.
Beverage maker Coca-Cola India said adoption of digital tools—both remote working as well as scaling up presence on e-commerce, at a time when out-of-home consumption of beverages remains disrupted —has been accelerated.
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