Coronavirus: Lockdown pushes fast-moving consumer goods into the slow lane

Several distributors and retailers said they are operating in line with orders passed by several states that are allowing sale and procurement of essential goods such as packaged foods, vegetables and medicines but were facing problems with regard to opening warehouses and movement of delivery trucks in some cities.

The Gujarat Cooperative Milk Marketing Federation, Ltd, (GMCH), which makes Amul products, has faced problems in the movement of delivery of vehicles, manpower and labour, in pockets of Delhi, Mumbai and Thane, said managing director R.S Sodhi. He has assured consumers that procurement and supply of packaged foods and beverages, especially packaged milk, will continue despite lockdowns.

Another large packaged foods company said it has faced distribution-related problems over the past two days. “We are facing issues in distribution where either the district centres or depots are being asked to close down. We are working very closely with the government, making them understand the issue and getting the required permissions," said a top executive at the firm on the condition of anonymity.

The firm is also facing problems in procuring raw material “because of the lack of understanding of orders, as authorities are not allowing things like sugar and wheat flour to be transported though they are essential and exempted from prohibitions," he said.

Distributors of fast-moving consumer goods said the orders were being misinterpreted at different local administrative levels.

Over the weekend, warehouses of online grocery firm Grofers in several states were forced to shut and delivery partner turned away. “We are noticing some misunderstanding on the ground level with respect to implementation of instructions covered in the central government directive. Our warehouses in Hyderabad, Mumbai, Pune, and Delhi have been forced lockdown and delivery partners from our local stores are being turned back. We are working round the clock to support people who rely highly on our services and are waiting for essential supplies at their homes," said Albinder Dhindsa, co-founder and chief executive officer (CEO), Grofers. This despite, the ministry of consumer affairs, last week saying that delivery of grocery should be considered an essential service.

India is in the middle of strict lockdowns aimed at curbing movement of people; however, movement and availability of essential services is exempted. On Sunday, the Centre ordered over ki to be placed under strict lockdown as the country stepped up measures to control the spread of the highly contagious coronavirus.

States are also urging people to stay at home, even as some of them have sealed their borders and halted plying of private and public transport. “We are not being able to replenish stocks," said Dhairyashil Patil, national president of the All India Consumer Products Distributions Federation. Patil added there has been some concern around movement of FMCG goods, especially in the south since Saturday. “Markets have not been replenished, Sunday everything was closed, grocery stores are open, but they will get exhausted soon," Patil said.

Ludhiana-based Bonn Industries said its delivery trucks have faced obstructions in a few states. “There are instances where we have been stopped by cops when we tried to enter states such as Haryana, Delhi, Uttar Pradesh and Himachal Pradesh. It’s a concern within states as well," said Amrinder Singh, director, Bonn Group of Industries, which sells packaged bread and cookies. This is impacting production at the firm’s plants that are running at sub-50% capacity, Singh said.

Firms that work closely with kirana stores said a recent surge in demand for packaged foods, personal hygiene products amid consumer concerns around impending lockdowns had dried up stocks at small grocery stores. “Small kirana stores typically carry 1-2 weeks of inventory, and this buffer inventory helped cater to demand in the last few days. However, this inventory won’t last forever. For a variety of reasons, products which are manufactured are not reaching these retailers, and mass-scale supply chains across the board even for essentials are operating at only about 30% efficiency," said Amit Sharma, co-founder ShopX, a business-to-business platform that supplies goods to kiranas and local traders. “This needs to increase to 70% very soon to ensure there is ample stock in the market," he said.

Sharma said there needs to be clarity with the local enforcement authorities so that they smoothly allow the movement of essential supplies.

However, large firms said they are working round the clock to match the heightened demand for packaged food products in the market.

Navin Tewari, chief executive of Capital Foods, said the company has extended shifts at its plants to cater to demand for its packaged noodles. A spokesperson for Mother Dairy said, “We are working towards ensuring and meeting the demand of consumers for milk and milk products across the region."

Packaged consumer goods company Dabur India Ltd on Monday said it has temporarily suspended operations at roughly 60% to 70% of its manufacturing units in India as it grapples with a strict lockdown in the country that has disrupted movement of people and goods here.

To be sure, the maker of Vatika hair oil, and Real Juices has 12 manufacturing units in India.

In a filing to the stock exchange, the company said it will continue operating units that produce essential products like Ayurvedic medicines, Chyawanprash, hand sanitisers, and hand washes, in public interest.

Saumya Tewari contributed to this story.