FMCG firms ramp up supplies as coronavirus-led curbs return

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

Suneera Tandon
Updated4 Jan 2022
Companies said they experienced supply chain and manufacturing constraints in the first half of last year that dampened sales.
Companies said they experienced supply chain and manufacturing constraints in the first half of last year that dampened sales.(HT)

Packaged goods companies are again ramping up supplies and stocking up products across retail stores and e-commerce channels as covid-linked restrictions crop up in several large states.

Chennai-based fast-moving consumer products company CavinKare said it is proactively stepping up production and ramping up stocks across retail outlets.

“In case there is a sort of a 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 (fast-moving consumer goods), particularly personal care and beverages, we are able to get supplies to the market on time,” said Venkatesh Vijayaraghavan, CavinKare’s CEO and director.

The company has increased stock levels across the board—in e-commerce, modern trade, and general trade business.

Several states have announced night curfews. In Delhi, for instance, shops in all markets open on either odd or even days though essential shops in all states remain open.

Parle Products said it is increasing the buffer stock at its depots and 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 the distributor, who is the closest to the market, to asking retailers to buy more and stock more because we anticipate some increase in demand,” said Mayank Shah, category head at biscuit-maker Parle Products.

Shah said the company ensures buffer stock of raw materials like packaging material to avoid any unexpected supply and commodity disruptions linked to the ongoing wave.

Shahrukh Khan, executive director for operations at Dabur India Ltd, the producer of Vatika hair oil and Real juices, said the company has started building requisite inventory to maintain 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 experienced supply chain and manufacturing constraints that dampened sales in the first half of last year.

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.

A company spokesperson said that the company is continuously taking stock of operations and monitoring market developments.

Omni-channel presence has become more critical 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 visit stores during the peak of covid physically,” the ITC spokesperson added.

Manish Aggarwal, director, Bikano, Bikanervala Foods Pvt. Ltd, too, expects e-commerce to structurally become a more significant channel where consumers are inclined to make their contactless purchases.

On the other hand, retailers 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 wholesaler is seeing a dip in its hotels, restaurants and café business.

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