Home >Industry >Retail >Lockdown hurt liquor, cigarette, skin care sales: Report

Demand for packaged essential foods, household insecticides, along with health and hygiene products such as household cleaners and anti-bacterial soaps is expected to benefit listed fast moving consumer goods company in the June quarter, even as weak demand for skin care, cigarettes, ice-creams, liquor and hair care products could drag revenues at some FMCG firms, according to a research note on the consumer goods sector by Edelweiss Securities.

To be sure, FMCG companies faced severe disruptions in the months of March and April when India moved to impose a strict lockdown. The effects of the lockdown and the subsequent demand for household essentials will be visible in the first quarter of the current year.

The numbers will also help gauge overall consumer demand for packaged consumer goods in Asia's third-largest economy.

Consumers stocked up on essentials while postponing more discretionary spends on categories such as personal care.

"The lockdown hurt liquor, cigarette, skin care, hair care, and ice creams, but benefitted biscuits, noodles, branded essentials in food, health & nutrition, household insecticides and hygiene," according to authors of the report.

In April, market researcher Nielsen slashed its 2020 growth outlook for India’s fast moving consumer goods sector—to 5-6% from its earlier projection of 9-10% on the back of covid-19 led disruptions. Nielsen follows a January to December calendar.

In their June quarter updates earlier this month, packaged consumer goods companies Marico Ltd and Godrej Consumer Products Ltd., whose portfolios span cooking oil to hair color observed similar trends.

Marico's portfolio of Saffola cooking oil benefitted with consumers cooking more at home; while its oats business too had a "good run".

"Saffola Edible Oils posted healthy volume growth, partly attributable to increased in-home cooking and consumption. Similarly, the foods business also continued its good run, backed by its twin proposition of health and taste," the company said in a filing to the exchanges on 3 July.

GCPL said that its household insecticide category witnessed strong consumer demand. The same wasn't true for its hair color brands that hold a dominant position in the market.

"In India, resurgence of Household Insecticide category continued with strong underlying consumer demand. We did witness strong momentum in the Hygiene category, however saw muted demand in Hair Colour and Air Freshener, which were temporarily impacted by the lockdown," GCPL said in its Q1FY21 update. The maker of Cinthol soaps expects close to mid single-digit volume driven sales growth in the quarter.

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