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Business News/ Industry / Retail/  Consumer trends to sustain, say FMCG cos
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Consumer trends to sustain, say FMCG cos

Companies have had a tumultuous year as changing consumer habits prompted them to readjust their portfolio and offerings in line with what users sought during the lockdown

The slowdown in consumer goods has been sharper than expected.Premium
The slowdown in consumer goods has been sharper than expected.

New Delhi: Packaged consumer goods companies on Wednesday said buying trends that emerged in the aftermath of the pandemic such as a shift to online shopping and a surge in demand for packaged foods and hygiene products will continue for now, albeit at moderated levels.

For makers of fast-moving consumer goods certain categories, especially branded snacks, soaps, immunity boosters, sanitizers, cleaners, staples, grew disproportionately. However, with mobility improving following the unlocking of normal and economic activities and easing of consumer anxiety about the disease, some categories are likely to experience moderation in growth.

Also Read: A silent crisis is creeping up on India’s retail borrowers

Categories apart, consumers also changed the way they made purchases, including shifting online shopping and relying on local grocery stores.

“To my mind, will it stick? Absolutely. It will may not stay at the same heightened levels but when people have experienced the convenience, people have experienced the ease and people have been happy with the experiences, there’s no reason why they will not stick with it. But yes, as behaviours change, as they get a little more secure, you start going out so on and so forth," Bharat Puri, chairman, Confederation of Indian Industry's (CII), national committee on FMCG and managing director, Pidilite Industries, said at a virtual event on the sector organised by the industry body on Wednesday.

Companies have had a tumultuous year as changing consumer habits prompted them to readjust their portfolio and offerings in line with what users sought during the lockdown.

Britannia Industries emerged a winner as food consumption shifted from out-of-home to in-home, helping the company that sells cookies and packaged cheese clock strong numbers in the June quarter.

Varun Berry, managing director at the packaged foods company, said some of recent changes in consumer behaviour will remain. “I don't think the pendulum is going to swing all the way to where it was. People will remain cautious. While yes, people are now sitting at home and they're tired of sitting at home, so there will be a little bit of whiplash people going out and, you know, getting back to normal life. But I do think that cautiousness is going to remain," said Berry.

Britannia’s consolidated operating revenues for the June quarter grew 26.4% year-on-year (y-o-y), the best performance among consumer goods companies at that time, Mint had reported earlier. However, with the easing of lockdown, its September quarter revenue growth slowed down to 11%.

The lockdown also pushed several Indian consumers to buy more goods online for the first time.

Hindustan Unilever Ltd, the country’s top FMCG company, said the share of online retail to its total sales volume is close to 6%, up from 3% in 2019. E-commerce sales at Nestle India Ltd surged 97% in the September quarter, comprising 4% of its local business.

Britannia Industries also said its e-commerce sales grew “aggressively" in the September quarter while modern trade sales have been slow to catch up.

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ABOUT THE AUTHOR
Suneera Tandon
Suneera Tandon is a New Delhi based reporter covering consumer goods for Mint. Suneera reports on fast moving consumer goods makers, retailers as well as other consumer-facing businesses such as restaurants and malls. She is deeply interested in what consumers across urban and rural India buy, wear and eat. Suneera holds a masters degree in English Literature from the University of Delhi.
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Published: 09 Dec 2020, 05:46 PM IST
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