FMCG cos see customers pantry loading as COVID-19 cases spike; say ready with stocks

FMCG companies witnessed an increase in demand in the past two weeks as consumers stocked up in the wake of rise in COVID-19 cases across the country, and have ramped up supplies to their stockists to avoid supply shortage.

Companies such as Parle Products, Dabur India and ITC, which are already facing inflationary pressures on inputs, are keeping extra stock of raw materials to avoid any disruptions in the supply chain due to the fresh wave of the pandemic, putting in use their learnings from the past two waves.

The FMCG makers also expect that a sudden increase in COVID cases and some restrictions imposed by local authorities in some states would again impact the demand for out of home' channels products, which was recovering from the last few months, though demand for home consumption and immunity products is going to gain for few weeks.

The companies expect further accelerated digitalisation -- e-commerce and omnichannel presence with technology platforms expected to play a strong role in ensuring continued and uninterrupted supply of FMCG products.

"In the last two weeks,  we have seen a 10-15 per cent increase in demand in the market. We understand there is a bit of pantry loading as customers do not want to venture out, Parle Products Senior Category Head Mayank Shah told PTI.

The leading biscuits company has kept buffer stocks ready, he said.

In fact we have even asked our retail partners to keep more stock in order to ensure supplies. Also at our factories, we have kept extra stock of raw materials just in case there are disruptions in supply chain," Shah added.

Expressing similar views, Dabur India Chief Executive Officer Mohit Malhotra said the company has also ramped up supplies and increased pipeline inventory in anticipation of any disruptions due to the rapid spread of the Omicron variant.

We are also applying learnings from last year on streamlining the supply chain to ensure minimal disruption in supplies and have already begun building requisite inventory to avoid any supply and commodity disruptions due to the ongoing wave, he said.

Dabur has already reinforced COVID-safe behaviour, safety and hygiene norms within its manufacturing operations to keep employees and workers safe.

"Our units are also equipped with Oxygen Concentrators to meet any emergency in the event of a third wave. We will take all necessary steps to safeguard the health of our employees, he added,

An ITC spokesperson said the company has been continuously taking stock of operations and monitoring market developments.

The robustness and agility of our supply chains as well as our distributed manufacturing footprint together with accelerated digitalisation enable us to ensure continued and uninterrupted supply of our range of FMCG products and serve the needs of consumers under all evolving circumstances," the spokesperson added.

All precautions and stringent hygiene protocols remain in place both at ITC office premises and at factories, including masking at all times, sanitization, safe distancing and quarantining in case of travel or contact.

Stressing that omnichannel presence by companies and brands has now become more important than ever, especially in urban areas, the ITC spokesperson said,"Emerging channels like e-commerce are gaining traction with increased penetration and adoption."

Apart from big e-commerce players, most brick and mortar retail chains and even local modern format stores/supermarkets have strengthened their e-presence given the reluctance of people to physically visit stores during the peak of COVID-19, the spokesperson added.

Emami Agrotech, the edible oil maker and part of Kolkata-based Emami Group of Companies said the steep increase in the current COVID wave with the spread of Omicron variant is a major concern for all.

"In anticipation of stricter measures by the concerned local administration and disruption in the supply chain due to a large number of people getting infected in the value chain, pantry stocking by consumers in the last one week has been witnessed for staples, packed food items including our edible oil," Emami Agrotech Director N Krishna Mohan said.

The company is taking all steps to ensure that deliveries are smooth and our products are available both on the shelves and on e-commerce platforms, he added.

"However, consumption across the HORECA (hotel, restaurant and catering) channels is seeing a bit of stiffness as out of home consumption have drastically fallen," Mohan added.

Edelweiss Financial Services Executive Vice President Abneesh Roy, however, said the level of pantry loading this time will not be as heavy as in the previous two waves.

"Not much pantry loading will happen as there is unlikely to be any total strict lockdown. (In) Wave 2 also pantry loading hardly happened, he said.