Increased demand for groceries lifts household consumption to a two year high in April-June

Source: ETRetail.com, Aug 11, 2020

MUMBAI: Household consumption of groceries and home and personal care products surged to a two-year high during the April-June quarter, according to a research firm, as consumers stocked up on these products while hunkering down in their homes due to Covid-19-related restrictions.

The fast-moving consumer goods market expanded 4.3% in volume and more than 8.5% by value during the quarter, according to data from Kantar Worldpanel. Kantar’s numbers contrast with data from market researcher Nielsen, which showed the market declined 18%. This is likely because Nielsen mainly covers retail sales of packaged goods while Kantar tracks household consumption of both branded products and those from the unorganised segments.

“From a household purchase lens, FMCG overall seems fairly strong. While out of home consumption may have seen a sharp drop, the household view is one of positive growth,” said K Ramakrishnan, the South Asia managing director at the company owned by communications and advertising giant WPP.

At an overall level, most listed companies have either posted a decline or stagnant sales growth during the quarter, hurt by falling out-of-home consumption. Also, there is a lag effect with companies posting primary sales data which were impacted by supply-chain disruptions compared with Kantar’s numbers which show actual consumption.

“With people staying at home, both household consumption by volumes as well as frequency was higher across food and non-food products, which reflected in published results. Companies which have lower dependence on out-of-home categories posted good results,” FMCG company Marico’s managing director, Saugata Gupta, said.

For instance, Britannia, maker of Good Day and Tiger biscuits, expanded sales by 25%, while Hindustan Unilever said there was a big burst of demand for jams and ketchup as people were cocooned in homes. ITC, which makes Sunfeast biscuits and Bingo Chips, said staples, noodles, biscuits and dairy products saw healthy demand in the June quarter. Marico too said demand for its Saffola cooking oil grew 16% due to an increase in home cooking. It also reported higher in-home consumption of hair oils.

Kantar’s data are heavily skewed toward the food and beverages segment, which accounts for nearly 70% of the overall volume of products covered and has a higher proliferation of items from the unorganised end of the business. Within F&B, foods grew 5.7% but beverages dropped 19% largely because hotels, restaurants and caterers – popularly called HoReCa and account for almost a third of the overall business for beverages companies – were shut.

“Despite the fact that across the globe and across different states and cities in India, on-premise and out-of-home consumption is getting eased out, we still see a challenge which consumers are still very, very hesitant to step out,” Tata Consumer Products managing director Sunil D’Souza told investors last week.

FMCG stocks on a roll as household binge during lockdown drives valuations

Source: ETRetail.com, Aug 06, 2020

New Delhi : Stocks of fast-moving consumer goods (FMCG) companies are on a roll since the lockdown in March as increased consumption at home and lesser disruption in demand compared to other sectors have boosted valuations.

The FMCG Index grew 32 per cent from March 23 till now. Among the consumer stocks, several have seen massive rallies during the period with Tata Consumer Products up by 98 per cent, Britannia up by 80 per cent, Godrej Consumer by 56 per cent, Marico by 52 per cent, Colgate by 32 per cent, Dabur by 27 per cent, ITC by 25 per cent and HUL up by 18 per cent, according to Religare Broking.

Ajit Mishra, VP-Research, Religare Broking, said that with the easing of the lockdown measures, resumption of factories and easing of the supply chain of essential products, the companies present in the essential commodity segment as well as in the health and hygiene segment clocked significant revenue as they kept on picking up pace with higher demand.

Products such as biscuits, bread, milk, tea, coffee, food packets, detergents, floor cleaner and hygiene products (sanitisers, hand wash, soaps etc.) were in high demand.

Mishra said that companies such as Britannia, Dabur and Tata Consumers reported strong performance as a large part of their portfolio is present in the essential products segment while that of HUL, Marico, Godrej Consumers, ITC and Colgate reported mixed numbers.

Further, most of these FMCG companies benefitted from benign material prices as well as lower advertisement spends which led to improvement in margins.

The Covid-induced lockdown also impacted FMCG companies’ sales and demand initially as they faced disruption in distribution due to restrictions in the supply chain as well as closure of factories.

Notably, demand for essential commodities started to increase while that of premium products and discretionary items were adversely impacted as strict lockdown was imposed which restricted their movement.

Further, local kirana shops gained more as compared to branded stores as they had varieties of products available and were also able to deliver products on time. Besides, impulsive buying, bulk and economical options and move towards e-commerce and digitalisation was the new trend among the urban consumers during the lockdown period as consumers were afraid of contracting the virus.

As a result, FMCG companies tied up with delivery agents and also launched their own e-commerce apps for reaching out to the customers.

FMCG companies are continuing to focus on their core brands, managing distribution and supply chain and efforts towards growing digitalisation and e-commerce sales. These steps would help them overall the recent challenges and are expected to post decent numbers in the coming quarter.

Nielsen expects FMCG sector growth to be flat in 2020

Source: The Hindu Business Line, Jul 30, 2020

New Delhi: Nielsen has slashed its growth forecast for the FMCG sector in the country and expects it to be nearly flat in the range of 1 per cent to -1 per cent for the full year 2020.

The markets research and insights firm had in April said it expected the FMCG value growth to be in the range of 5-6 per cent for the calendar year.

In the April-June period (Q2), the FMCG sector’s value growth declined by about 17 per cent, due to the strict lockdown imposed to curb the spread of Covid-19 pandemic adversely impacted supply chain and consumer demand, it added.

While in the April-May period, value growth for the sector was down by 27.7 per cent, as the country gradually began unlocking economic activities in June, the FMCG sector saw some recovery with a value growth of about 4.5 per cent. The insights firm said that this was fuelled by recovery in rural demand and added that growth in rural markets outpaced urban markets.

Nielsen expects consumer spends in the second half of the year to revive due to the festival season besides other macro-economic factors such as good monsoon. However, this will also depend on Covid-19 infection cases and the strategy the country adops in further unlocking of economic activities.

“We expect to see some recovery in the July-December period.We are expecting to see some growth in Q3 but we expect to see even better growth in Q4 due to the festival season.” said Prasun Basu, South Asia Zone President, Nielsen Connect

FMCG sales in fast lane in rural areas; hygiene, immunity products in demand

Source: The Economic Times, Jul 12, 2020

New Delhi: Leading FMCG players such as ITC, Godrej, Dabur, Emami and Marico are witnessing robust sales in rural and semi-urban markets, bolstering hopes of a speedy recovery from the impact of the COVID-19 crisis. Interestingly, the companies are also reporting a spike in sales of health and wellness, hygiene and immunity-boosting products in these markets, apart from the food products category.

The firms have started to offer these items in value packs and are also expanding their network in rural and semi-urban markets.

“Rural has been growing much ahead of urban and it’s actually performing better than the pre-COVID days,” Godrej Consumer Products (GCPL) CEO India and SAARC Sunil Kataria said.

This is largely due to the fact that the lockdown has been less intense in rural India than in urban areas, he added.

Dabur India Chief Executive Officer Mohit Malhotra said his company has also witnessed a similar trend where rural demand has been growing ahead of urban demand.

“Going forward too, I think rural demand will continue to outpace urban demand. With migrant workers shifting back to their hometowns and the government announcing additional spend on MNREGA and higher MSPs, rural consumption would surely see an uptick,” he said.

Moreover, expectations of normal monsoon this year would further improve sentiments in the hinterland, he said.

According to a recent report from Edelweiss Research, several government initiatives and a good monsoon will supplement farmers’ incomes, which should prop up rural growth from Q2 FY21.

“Overall, with supply chains restored and a likely rural recovery, we expect the sector to record positive growth beginning Q2 FY21,” it said.

Homegrown FMCG firm Emami is seeing stable growth in rural demand post-March, which is overall at par with last year. It expects to clock double-digit growth in these markets this year.

“Smaller packs across our brand portfolio are growth drivers for the rural market. New launches like sanitisers and soaps from our personal hygiene range are showing early signs of good demand,” Emami Director Harsha V Agarwal said.

The Kolkata-based company has launched initiatives like loyalty programs in these markets.

“We are also investing in digital marketing to connect with our rural consumers,” said Agarwal.

According to ITC, in terms of food consumption, it has been witnessing encouraging demand for Sunfeast biscuits, Bingo! range of snacks and Yippee! noodles in the rural markets.

Besides food, health and wellness, hygiene and immunity-boosting products are now at the forefront of consumer demand even in the rural markets, it said.

“Awareness amongst consumers on health and hygiene has got heightened across both urban and rural India. Hand hygiene and specifically handwashes have seen an exponential rise across India and penetration has increased significantly,” an ITC spokesperson said.

ITC has launched its hand sanitiser pack priced at just 50 paise to target these markets.

Marico is also extending its network in rural areas.

“At present, sales from rural India contribute to about 31 per cent of our domestic sales, and we reach approximately 58,000 villages through our stockist network.

“As the rural demand continues to grow, we aim to drive direct distribution and value to consumers, as they will be the key growth drivers in rural markets, while continuing to focus on increasing market share and maintaining volume growth which is independent of category growth,” a Marico spokesperson said.

Dabur is also investing to expand its rural coverage and expects to connect with 60,000 villages by the end of this fiscal.

“We had invested ahead of the curve in building our rural footprint with our sub-stockist network going up significantly. This investment paid off as rural demand continued to grow ahead of urban for Dabur,” Malhotra said, adding its rural network has grown from 44,000 villages in March 2019 to a little over 52,000 villages in March 2020.

“With the lockdown easing now, we are restarting the expansion of our rural footprint and will take it up to 60,000 villages by the end of 2020-21,” he added.

However, experts said the urban markets will bounce back once the situation normalises.

“With the prediction of a normal monsoon, the rural market should do well in the future. However the urban markets should bounce back once the COVID cases are under control in the urban markets, lockdowns are eased and uncertainty levels reduce,” EY Partner and National leader, Consumer Products and Retail, Pinakiranjan Mishra said.

In April, market insights firm Nielsen had slashed the growth forecast for FMCG sector by almost half to 5 to 6 per cent for 2020, citing impact of the coronavirus pandemic and subsequent lockdowns.

FMCG firms report sales growth in June as supply chains stabilise

Source: ETRetail.com, Jul 08, 2020

New Delhi: Several FMCG companies have reported sales growth in June and expect the momentum to continue in Unlock 2.0, though some challenges persist.

Firms such as Godrej Consumer Products Ltd (GCPL) and Marico expect overall growth in the April-June quarter, which was severely impacted due to the coronavirus lockdown.

GCPL expects a “mid-single-digit, volume-driven sales growth” in April-June, the company said recently in its quarterly update for Q1 FY21.

The Godrej group firm has seen a “strong recovery” from mid-May and June across most of the markets where it operates.

It is witnessing robust demand in the household insecticide category, while the hygiene segment too saw strong traction, GCPL said.

The company has a range of brands across personal and home care segment, such as Cinthol, Protekt, Ezee, Godrej No 1, Hit and Good Knight.

Another homegrown FMCG firm Marico, sharing its quarterly update, said it witnessed significant disruptions during the first fortnight of April but since then, has been able to steadily scale up operations to near-normal levels in June.

While edible oils and foods businesses resumed operations in early April as per government guidelines, hair oils and personal care segments could only commence in late April and early-May, it added.

“With the Q1 top line translating into a single digit growth over the annual run rate of FY20, the company expects to bounce back to posting volume and value growth during the rest of the year,” said Marico, which owns brand like Parachute, Saffola, Hair & Care, Nihar and Livon

According to experts, FMCG companies have seen an improvement as production and supply chains have stabilised.

“Several FMCG companies have seen a marked improvement in the last month as production and supply chain is stabilised and lockdown restrictions are lowered across states,” EY Partner and National Leader – Consumer Products and Retail Pinakiranjan Mishra said.

Some consumer durables companies have also reported growth in sales of refrigerators, vacuum cleaners, microwave ovens and washing machines.

According to Panasonic India Divisional Head – CSD Suguru Takamatsu, people confined within their homes have developed greater regard for appliances that help them multitask and make their lives easier.

“Since easing of the lockdown, and allowing sale of consumer electronics, we at Panasonic India, are starting to inch towards steady sales,” Takamatsu said.

Fuelled largely by rural demand, “y-o-y for month of June, our refrigerators (sales) grew by 40 per cent, vacuum cleaners by 20 per cent, microwave and washing machines (top-load) too saw an uptake of 44 per cent and 24 per cent respectively”, he added.

Consumers are opting for large-screen TVs to binge on entertainment which is driving the growth across markets, he said.

“Grooming products, especially the trimmers have seen a 5X growth during this period, as consumers are depending less on salons to ensure safety and hygiene. We are quite hopeful that the festive season will help us recover some of the losses incurred during lockdown,” he said.

FMCG revenue to fall 2-3 per cent this fiscal: CRISIL

Source: The Hindu Business Line, Jun 02, 2020

Mumbai: Revenue of the fast-moving consumer goods (FMCG) sector is expected to de-grow 2 to 3 per cent this fiscal, a drastic change from its estimate of 8-10 per cent growth made before the pandemic struck, CRISIL Ratings said on Tuesday.

While the demand and supply shock induced by the Covid-19 pandemic have derailed sales, CRISIL said that softer input prices and pruned ad spends will cushion the impact of the sharp revenue drop on operating profitability, which will still remain healthy at 18-19 per cent (estimated at ~20 per cent in fiscal 2020).

That, along with well-capitalised balance sheets, the limited need to add capacity, and the largely negative working capital nature of the business will ensure credit profiles of FMCG companies remain stable in the current fiscal, the credit rating agency noted.

The assessment is based on an analysis of 57 CRISIL-rated FMCG companies that account for ~50 per cent of the sector’s revenues. It assumes staggered relaxation of lockdown from June 2020 onwards, gradual recovery in sales thereafter, and normalcy in operations from the second half of the current fiscal.

Rural India

Rural India should fare better than urban areas because of higher proportion of essential products consumed, government doles, eased restrictions on agriculture activities, and likelihood of a normal monsoon, it said.

What also augurs well is that prices of key inputs used in packaging, as well as sugar, wheat and palm oil have softened recently on lower demand, it said. Besides, selling and ad spends are likely to be kept under check, with lower discounts and innovative use of cost effective digital advertising. Firms are also focusing on streamlining operations and distribution channels to rein in costs, it noted.

Hence, despite a sharp decline in revenues, operating profitability for the sample set is still expected to remain healthy at 18-19 per cent in fiscal 2021 with marginal moderation of 70-100 bps, said CRISIL.

FMCG sector

The sector has been one of the most resilient among consumer-oriented sectors in terms of credit quality, found CRISIL. “Despite declining revenues, credit profiles of large FMCG companies are likely to remain stable, supported by well-capitalised balance sheets and healthy, liquid surplus. Small firms with lower liquid surplus may resort to higher dependence on external funds to manage additional working capital requirements arising out of the crisis, and their credit metrics are expected to moderate,” said Gautam Shahi, Director, CRISIL Ratings.

Revenue impact

The impact on revenue will vary across FMCG product segments. The proportion of essential products in a segment (foods and beverages, personal care and home care), downtrading, and supply disruptions will determine the extent of decline in revenue, said CRISIL.

“Growth in the food and beverage segment (accounting for ~50 per cent of revenue) will mirror the overall sector’s performance,” said Anuj Sethi, Senior Director, CRISIL Ratings.

Some segments such as ice cream and beverages would see a steeper fall because of revenue loss for the major part of summer, said Sethi.

“The personal care segment (~25% of sector’s revenue), which has the highest proportion of discretionary products, will witness the steepest decline, while the home care segment (~20% of sector’s revenue) will be the least-affected because of its high essentials quotient, and rising hygiene awareness,” he added.

FMCG companies open links with retailers to ensure supply

Source: LiveMint.com, May 06, 2020

NEW DELHI: Several fast-moving consumer goods (FMCG) companies have stepped up deliveries of their products to neighbourhood grocery stores that are struggling with supplies of essential goods.

Marico has launched telephone services for retailers and even rolled out a dedicated app that lets shopkeepers place orders. Dabur, too is reaching directly to retailers. The companies said this will help ensure supplies do not run out at a time when distributors and wholesalers, key suppliers of packaged goods to retailers, have been immobile because of lockdown restrictions.

“We have commenced tele-servicing and introduced an app for retailers. This enables retail partners to feed in their requirement and place orders digitally or through a phone call at their convenience,” said Sanjay Mishra, chief operating officer, India sales and Bangladesh business, Marico Limited. The facility is available for 80,000 top retailers of the company, which makes the popular Saffola cooking oil and oats.

“In some cases, retailers are picking up stocks, but we have gone ahead and extended the services of our third-party logistics partners to distributors also to ensure smooth movement of goods to the retailers,” Mishra said. This includes tie-ups with logistics companies such as Delhivery, Shadowfax, Lalamove and Zoomcar “to ensure products are delivered from factories to depots and thereafter to distributors”, he said.

The move, said Mishra, helped resolve problems at different levels in the distribution ecosystem and helped multiple distributors across regions to restart their business. Marico’s Saffola oils portfolio benefited in the three months ended 31 March as shoppers across India cooked more at home and stocked up on cooking oils. The company’s edible oils portfolio saw a 25% year-on-year volume, even as its personal care portfolio gave a weak performance.

“We are deploying new strategies and finding innovative solutions to ensure uninterrupted supply of essential products to our retail partners during these unprecedented times. We have tied up with online delivery service providers, besides establishing a direct contact with retailers and leveraging technology to drive sales and service demand,” said Mohit Malhotra, Chief Executive Officer, Dabur India Ltd. Constraints in replenishment of stock, disruptions in the movement of distributors that are key suppliers of goods to retail stores, and lack of retail staff had dented supplies of essential goods in phase 1 of lockdown, market researcher Nielsen said in its update on India’s FMCG sector in April.

FMCG companies take direct route to customer homes

Source: ETRetail.com, Apr 29, 2020

Bengaluru | Mumbai: More than a dozen consumer goods companies including Hindustan Unilever, ITC, Mondelez, Procter & Gamble, Dabur and Colgate have started selling products directly to consumers. That’s circumventing traditional trade and distributor networks in areas where last-mile delivery has been disrupted due to Covid-19 restrictions.

Their latest direct-to-home initiatives involve partnering startups such as Dunzo, Scootsy and Swiggy by listing brand stores on their portals and even reaching out to resident welfare associations (RWAs) through their sales staff.

While retailers have been doing this for more than a month to implement physical-distancing norms after pantry loading led to increased footfalls, it is a first for fast-moving consumer goods (FMCG) companies.

“These partnerships are a vindication of the power of collaboration as no brand alone has answers to fulfil the needs of the nation during these unprecedented times,” said B Sumant, executive director at ITC Ltd, which is also selling products through its own portal.

As companies grapple with a shortage of staff with migrant workers having left for their homes, the supply chain has been thrown into disarray across the ecosystem — from sourcing raw materials to manufacturing and delivery of finished products.

“We are deploying new strategies and finding innovative solutions to ensure uninterrupted supply of essential products to our consumers,” said Mohit Malhotra, CEO, Dabur, which has tied up with online delivery service providers for retail outlets and households.

Storefronts on Delivery Platforms
“Our sales officials are reaching out to RWAs across the country and ensuring availability of our range of immunity boosters,” Malhotra said.

FMCG companies have set up storefronts on hyperlocal delivery platforms and are servicing orders from exclusive brand stores and directly from distribution centres, using delivery partners to get items to the doorstep.

Food ordering firm Swiggy has expanded its store network to more than 200 cities, allowing consumers to order groceries from neighbourhood shops.

“Through these partnerships, we are extending our hyperlocal delivery offering to unlock a new dimension of convenience for our consumers as well as earnings for our delivery partners,” said a Swiggy spokesperson. “Considering the present situation, our primary focus has been to address customer needs and pain points and their biggest ask has been to enable easy access to groceries and essentials.”

Companies aren’t sure whether such initiatives will become established as a regular part of their supply chain, which has traditionally depended on distributors and retailers while they focus on manufacturing and promoting brands.

“We will continue to evaluate and expand such opportunities with our partners to serve our consumers during this difficult time,” said a P&G spokesperson. “In addition, we continue to make interventions to strengthen our end to end supply chain to serve consumers with our products across different channels.”

Hyperlocal partners offer consumer goods makers easier access to customers amid the lockdown.

“Dunzo ensures demand density for these brands, and as long as we are able to maintain that, brands should continue to leverage the on-demand experience of Dunzo,” said Kartik Mishra, head of strategy and new initiatives at the startup. “Direct to consumer (D2C) just becomes an additional distribution channel for brands in addition to traditional retail and ecommerce that they already have.”

Experts feel single-brand stores on hyperlocal platforms will see low traction as consumers will prefer to get everything they need rather than stick to one label. “While we have cut out retailers from the equation now, we will have to wait and watch if these partnerships continue post the pandemic,” said an executive at a hyperlocal startup. “If demand drops post the lifting of the lockdown, neither us nor the brands might want to continue these partnerships.”

Consumer MNCs point to lockdown blues in India

Source: ETRetail.com, Apr 24, 2020

Mumbai | New Delhi: Chief executives of leading global consumer goods companies such as Unilever, Procter & Gamble, Coca-Cola and Kimberly-Clark said India’s Covid-19 lockdown protocols had led to severe supply chain disruptions and labour shortages, hurting business in a key market.

“When countries go through that initial government overreaction, we go and tell them, you don’t want to (cut) back on supplies of hygiene products—and then they are relaxed,” Unilever CEO Alan Jope told investors on an earnings call Thursday. “In northern Italy, there was a shutdown and within four hours, we got a relaxation order for the essential goods that we make. In India, it is taking us about four or five days to get that relaxation.”

Hindustan Unilever (HUL), the local unit of the Anglo-Dutch conglomerate, has seen production halts and transport holdups as have by most of its peers. India’s biggest consumer goods maker HUL is regarded as a proxy for consumer sentiment across the socio-economic spectrum.

Smaller Suppliers Hit Too
A three-week lockdown imposed across the country on March 25 was extended to May 3 to contain the spread of Covid-19.

“India is a big deal for us right now, which as a country (went) to a complete standstill in the last week of March. We are back selling and manufacturing in India, not at full strength, but at some good strength in a context where many are still unable to operate the business,” Jope said, echoing the sentiment of other consumer-facing firms in India that are struggling with the sporadic supply of raw materials and uncertainty over last-mile delivery.

Out of 157 units owned by listed fast-moving consumer goods (FMCG) companies, 68 facilities, or 43%, are in Covid-19 red zone districts, which means no activities barring essential services are allowed as they seek to curb the outbreak. This, in turn, has hurt smaller suppliers of products such as packaging materials and chemicals.

“In some markets like India, the severity of social distancing measures has negatively impacted consumption simply due to the significant reduction in shopping trips,” beverage maker Coca-Cola’s chief executive James Quincey said in a post-earnings call on Tuesday.

The maker of Coca-Cola, Thums Up and Minute Maid juices said unit case volume across its bottling investment ecosystem fell 5%, which it attributed to the lockdown in India. ET reported April 23 that Coca-Cola India, the country’s largest beverage maker, will write off the value of surplus inventory at bottling partners, with large quantities of soft drinks and juices left unsold during the lockdown as the company braces for its worst quarter ever.

“The more recent emphasis with Covid-19 now is making sure that we can maintain operational supply in India, and that’s been a big focus. We were down for a period of time, while we were getting the right permits to operate as an essential business,” said Michael Hsu, chairman of Kimberly-Clark, the maker of Kleenex tissues, on an analyst call on Wednesday.

While the situation has eased significantly after factories were closed in several places by law-enforcement authorities initially, many employees, especially at these units, refused to come to work for fear of catching the disease or have gone back home to their villages.

“Once we establish our ability to operate, we then have to source materials and we have to ensure that employees can get to work, which sounds simple, but is anything but,” Procter & Gamble vice chairman Jon Moeller told investors last week, referring to the Indian market.

FMCG companies stepping up production under eased norms but labour, supply chain issues impede

Source: Financial Express, Apr 21, 2020

Major FMCG players are trying to maximise production with the easing of regulations on opening of factories outside municipal limits by the government from Monday in the extended phase of lockdown despite continued constraints of manpower availability and supply chain issues.

Companies like Patanjali, Ruchi Soya, Dabur and Parle Products that have been operating their plants in a scaled down manner during the first phase of lockdown with limited workforce suggested giving manufacturing permission to their several suppliers, which are mostly MSMEs and fall within the city radius, as it is affecting smooth functioning of the supply chain.

“Factories of Patanjali and Ruchi Soya were operational even during the lockdown because we operate in food and essentials. However, there were issues regarding transportation and supply chain etc during lockdown, which I expect to ease out slowly,” Yoga Guru Ramdev told PTI.

According to him, Patanjali witnessed almost two to three fold jump in the demand of its several products and expected that supply of such products would be increased in the market going forward. Similarly, Dabur India Executive Director-Operations Shahrukh Khan said, “Almost all of Dabur’s factories are operational today, producing a range of ayurvedic medicines, hygiene products like hand sanitisers, hand wash and daily essentials, with strict implementation of SOPs for social distancing at offices, workplace, factories, proper sanitization of buildings, factories.”

He further said, “We are now trying to maximise production, given the supply chain constraints, and material and manpower availability. The recent guidelines issued by the Ministry of Home Affairs have definitely helped ease the situation as we go forward.” Khan also suggested manufacturing permission to its several suppliers, which are mostly MSMEs and fall within the city radius, as it is affecting smooth functioning of the supply chain.

“It is our request that companies that do not have any instances of COVID cases may be permitted to operate even if they fall within the radius of a hot spot, provided they adopt and implement all safety protocols and screening measures, and follow social distancing norms. This would ease the pressure on the supply chain and ensure timely production and delivery of essential goods and hygiene products to consumers,” he said.

“It is also encouraging that the government has recognised the importance of ensuring that key manufacturing and distribution activities ume given its impact on the economy and livelihoods,” an ITC Spokesperson said. It will continue to focus on manufacturing its essential items like food products, hygiene essentials as well as paperboards and packaging solutions in select factories.

“As a company which is currently manufacturing essential items like food and hygiene products, we have ramped up production across 100 factories which are now operational with the highest protocols of hygiene and safety. With the help of state authorities and local communities around our factories, we have been manufacturing such essential items and progressively endeavouring to service the growing demand,” the spokesperson said.

Parle Products Category Head Mayank Shah said that food was exempted and factories were open but at a reduced capacity of around 40-45 per cent following the restraint imposed by the government on the number of workforce. “There would not be much change on the production part but in the supply side and availability of workforce would improve further,” said Shah, adding that “even in the market as my distributor, whose labour was not coming, this would change because of this.

” He further said, “Now more people would go out to work and it would infuse certain confidence in those who were not willing to work. It would increase further availability of the workforce.” Capital Foods , the parent company of Ching’s Secret and Smith & Jones brands, said it has received permission to operate its plants.

“We have received the nod to operate all our plants and barring one, all are operational too. Our swift understanding of the challenges elaborated above made us move quickly. Within 48 hours of receiving nod, our first plant was operational and we are currently operating at around 60-70 per cent capacity across all our products,” said Capital Foods CEO Navin Tewari. However, he also raised concerns over availability of labour force, which has migrated after lockdown.

“Migration of workers and restrictions on the movement of people across cities or towns have created a dent on the availability of human resources,” he said, adding “to overcome labour availability challenges, we are housing some of them inside the plants taking care of their lodging, food, hygiene, and entertainment. That has eased some of our challenges yet a lot of ground needs to be covered.” CG Corp, which sells Wai Wai noodles, is also trying to resume production in all of its manufacturing plants across India.

“However we are running at reduced capacity currently as we are still trying to ensure better attendance at the plants. Truck availability will improve and distribution within cities will smoothen out, which will in turn help our teams replenish stocks and bridge the gap between demand and supply,” said CG Corp Executive Director Varun Chaudhary.

Comments from other major FMCG players such as HUL, Nestle and Emami could not be obtained as most of them are maintaining a silence period ahead of their quarterly results.

The FMCG industry has also assured adhering to the Standard Operating Procedure (SOP) issued by the government during the extended lockdown and abide by the restrictions such as number of workforce and take all safety measures.

“A series of safety measures have been reinforced at our units, which include thermal screening of employees during entry and exit at the Security Gate; ensuring that employees follow a queue, adhering to the social distance norms; fumigation of all areas with disinfectant on a weekly basis; and restricting the number of employees travelling together in elevators, to name a few,” said Khan of Dabur. In fresh guidelines issued on last Wednesday for enforcing the second phase of the coronavirus lockdown, the government barred all kinds of public transport and prohibited opening of public places till May 3. However, it allowed functioning of industrial units located in rural areas from April 20 while observing strict social distancing norms.