Demand has surged in states where strict measures have been imposed to contain the virus
Curbs to ensure social distancing are driving demand for staples as well as packaged food.
NEW DELHI :
Consumers in some of the major cities in India are starting to stock up on essential items, such as staples, packaged food and cooking oils, amid concerns that the government may intensify measures to battle the Covid-19 outbreak.
Fast-moving consumer goods (FMCG) companies and their retailers said demand has surged over the past few days, mainly in states where strict measures have been imposed to contain the outbreak. The number of confirmed Covid-19 cases has risen to 124 in India, with two fatalities.
Companies are monitoring trends in Mumbai, Bengaluru and Delhi, where the government has ordered the closure of shopping malls, cinemas and schools. Such steps, the companies believe, would drive demand for staples, such as rice and wheat flour, as well as packaged food, such as pasta and noodles, as more people are forced to cook at home.
“People are buying basics like sugar, salt, rice, atta, pulses; apart from noodles, pasta; things they can cook at home. In home and personal care, people are buying products like sanitizers and floor cleaners," said Kamaldeep Singh, president, Future Group-owned Big Bazaar’s food business.
Singh said people are stocking up on essential items as “more cases emerged, and some state governments announced closure of malls, and restricted movement".
“It is still early, but we expect people to start stocking up on staples like rice, flour, oil and other essential items. At the moment, there is a scare that things will go from bad to worse," said Ajay Motwani, head of marketing, consumer business, Adani Wilmar, which sells staples under the Fortune brand. Motwani said Adani Wilmar is closely tracking online sales to ensure adequate supply of stocks.
Packaged consumer goods firms have so far struggled with lower sales growth, as a slowing economy had crimped rural demand for daily use goods. In 2019, FMCG sales grew 9.7%, lagging the strong double-digit growth in the previous year, market researcher Nielsen India said in its sector update in January.
Analysts tracking the sector said the Covid-19 outbreak could help packaged foods and personal hygiene goods makers. “In the short-term, fast moving consumer goods in the personal hygiene and packaged foods category will do well as consumers rush to stock up on such products," said Naveen Trivedi, assistant vice-president, institutional equities, HDFC Securities. “We can see this benefit companies with a large basket of such goods, as households cook more at home, and consumers eat less food outside with partial lock downs in some states."
Orders on online grocery stores have also surged as shoppers stay indoors to maintain social distancing.
Online grocery retailer Grofers said consumers from Mumbai, Bengaluru, Pune, Hyderabad and Delhi-NCR were ordering more essential items. “Lately, we are also seeing panic buying and hoarding of essential commodities like atta, sugar, pulses and rice," said Albinder Dhindsa, co-founder and CEO, Grofers. The Covid-19 outbreak saw an upsurge in sales of personal hygiene items at Grofers thanks to demand for sanitizers, soaps and floor cleaners. Brands are also closely monitoring online sales.
Navin Tewari, CEO, Capital Foods Pvt. Ltd, the maker of Ching’s Secret brand of packaged foods and condiments, said orders from online retailers have jumped 25-30% in the past 3-4 days. “The real impact is in seven to eight cities in Maharashtra, Delhi-NCR, Hyderabad, and parts of Karnataka. We are still seeing high footfall and stocking up of food articles such as noodles, atta, sugar, tea, and biscuits—these are moving at a fast pace. In other cities, it is business as usual."
Families are also stocking up to avoid repeated purchases, especially at a time when the government has urged residents to maintain social distancing. “The biggest concern is to avoid going out to crowded markets," said Tina Goel, a resident of Noida who bought enough groceries, such as pulses, rice, toiletries, biscuits and noodles, to last a month.