Home >Companies >News >Household expenditure on FMCG went up 4.3% in March-May: Kantar report

Household expenditure on fast-moving consumer goods (FMCG) rose between March and May, compared to the year-ago period, something that appears counter-intuitive during the prolonged nationwide lockdown, according to a report by data, insights and consulting firm Kantar.

Expenditure on food, health and homecare products by Indian households grew 4.3% during the covid-19-induced lockdown. The pandemic and the fear of catching the infection, led to the number of trips to grocery stores decline from 34.3 in March to 30.5 in May, indicating pantry loading, Kantar added.

Fewer trips, however, translated into bigger ‘trip size’, described as volume bought per trip, resulting in value growth for companies.

“Households definitely spent more on FMCG products during the lockdown as compared to last year. The money was spent on food, beverages, health and hygiene, and even homecare products," said K. Ramakrishnan, manging director, worldpanel division, Kantar. Personal care categories, however, took a hit both in urban and rural India, the report said.

Among packaged foods, Parle Products, the maker of Parle-G biscuits, reported a surge in sales during the lockdown. The company’s market share in the packaged biscuits category expanded by 5 percentage points and it registered better-than-expected growth from March to May, Mayank Shah, category head, Parle Products, said earlier.

Consumption was high as people bought more during the lockdown and hoarded food items.

Britannia Industries, too, sold more biscuit packs in April and May, posting 20% and 28% growth in sales, respectively. This was on account of increased in-home consumption of the company’s brands.

Marico Ltd’s Saffola cooking oil also registered strong growth during the quarter as consumers cooked more at home during the lockdown. Other FMCG firms also saw shoppers hoarding large packs of staples and homecare products during the first phase of the nationwide lockdown, Adani Wimar’s deputy chief executive officer, Angshu Mallick, had said in an interview earlier.

Initially, consumers were stockpiling, so bulk packs did better. Later, the company’s ratio of consumer packs and bulk packs changed from 65:35 to 85:15. “This is because we are seeing more people buying smaller packs and also because restaurants and hotels are closed," he added.

“While FMCG companies saw increase in home consumption of staples and other essentials, for them the revenue from the hospitality segment or HORECA (hotel, restaurants, cafes) remained nil," said Ramakrishnan.

Interestingly, experimentation among categories dipped during the pandemic as consumers stuck to basic needs; trying out limited new brands in hair oil, washing powder and cooking oil categories. This was especially true for urban markets.

The drop was triggered by a combination of factors such as an initial shortage of products in the market, consumer apprehension to spending more time inside a store, and consumers buying only those packaged goods that are necessary during the long hours spent at home currently.

For instance, the number of categories bought between March to May in personal care dipped 15% compared to the year-ago period; while those in household care were up 20% in the same period showing consumer preference for items such as floor, toilet and utensil cleaners.

shuchi.b@livemint.com

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