FMCG firms bolster supply chains to prevent shortages
3 min read 16 Apr 2021, 05:10 PM ISTFMCG cos are working with sufficient inventory across trade channels, are pushing more in-demand stock keeping units and brands and have stepped up supplies to the market over the last few days in a bid to avert any supply constraints faced during India’s previous lockdown
PremiumNEW DELHI: Top consumer goods companies, facing another round of state-specific curfews, said they have enough stocks but have stepped up supplies nonetheless so that there is no repeat of the shortages and long queues seen the last time around.
Fast-moving consumer goods (FMCG) companies are working with sufficient inventory across trade channels, and have pushed more in-demand stock keeping units (SKUs) and brands into the market over the last few days.
“As of now, we have sufficient build-up of inventories at each channel member level. We do not see a challenge in supplies or logistics," said Anil Chugh, president, consumer care business, Wipro Consumer Care and Lighting, whose personal, home care and hygiene products include Santoor, Maxkleen, and Safewash.
Packaged bottled water company Bisleri said it has a widely distributed supply chain with about 150 plants spread across India.
The company has also ramped up supplies to pharmacies and vegetable sellers apart from deepening engagements with e-commerce and modern trade retailers.
“Our first priority is to ensure that our production is sustained. In certain places, we are trying to house workers closer to the factory so that their movement is contained within a safe zone, and they can reach the manufacturing facility," said Angelo George, chief executive officer (CEO) at Bisleri India.
As cases surge in the second wave of the covid-19 pandemic, India’s larger states have steadily moved toward strict curfews, spawning an uptick in demand for essentials from people stuck at home.
But unlike during the nationwide lockdown of March 2020, when stocks dried up amid panic buying in many neighbourhood shops, companies said they are better prepared this time around.
Retailer Metro Cash and Carry said all its stores are displaying covid-related goods more prominently and have ensured adequate stocks in critical categories.
“We witnessed anxiety buying in the previous weeks, with a surge in in-home consumption for processed food, ready-to-eat and deep-frozen categories," said Arvind Mediratta, managing director and CEO, Metro Cash and Carry India. “But with compulsory rapid antigen testing at malls, and now with the lockdown and restrictions in Mumbai, we have witnessed dwindling customer footfall in the past couple of days."
Mediratta said the classification of ‘essentials’ remains vague.
Companies said they had anticipated a spike in infections and the subsequent restrictions. “This time around, our system is optimized to ensure we’re producing more of those stocks," said Parle Products’ senior category head Mayank Shah. Several of the packaged food company’s factories are working with a cap on workers.
Companies are also pushing larger packs, more essentials and simplifying production by pushing out top-selling goods, said the head of food and grocery at a top retailer.
Online retailer Grofers said that this time last year, retailers faced a lot of uncertainty as well as supply-chain bottlenecks. “They are now better prepared and far more resilient," said a company spokesperson.
In the past few weeks, Grofers has reported a significant surge in demand for ready-to-eat and ready-to-cook packaged foods, packaged milk and milk products besides the usual hygiene products like repellents, floor cleaners and disinfectants.
Sunil Agarwal, chairman, RSH Global, said the company, which makes personal care products, has done a lot of stocking this time in general trade, modern trade chains and even e-commerce. “There are stocks for the next four-to-six weeks within trade. Usually, we have two-to-three weeks of stock," he said. Cosmetics stores, however, are not open as they are not part of essentials, he added.
But others cautioned that if the curfews intensify, companies could face a labour crunch.
“FMCG firms generally carry 15-to-18 days of inventory. If the lockdown extends, that’s when they will feel the heat. The major problem will come if labour starts going back to their homes," said Kumar Sangeetesh, co-founder and CEO, 1K Kirana Bazaar, an aggregator of kirana shops for rural markets.
