FMCG COMPANIES IN A POST CORONA WORLD

IMPACT OF PANDEMIC
Like all the other sectors, the consumer goods industry will also be significantly
impacted simply because the markets have been shut down over the last 10 days or
so. There has been no distribution in the market and consequently productions have
also been shut down. At this stage, availability takes precedence over pricing. . In
recent days, the supply chain has been disrupted, considering the unprecedented
nature of the lockdown across the country. The government is well aware of the
challenges and in line with its commitment to ensure uninterrupted supplies of
essential items; it is working closely with the industry to get the supply chain back
on track. So, after a shutdown of a few days,

Fast Moving Consumer Goods(FMCG) companies ITC, Nestle and Dabur etc.
they are producing only the essential items at their manufacturing units. FMCG
sector, which is producing beverages and foods as well as essential personal
hygiene products such as hand wash, soaps and sanitizers that are needed to fight
COVID-19

 Pantry-loading of daily essentials:- such as infant food and formula, shelf-

stable groceries, daily hygiene products, and bottled water. These products face
constrained supply and below-average stock levels.

 Short-term declines in household discretionary products:- such as

traditional dairy, soft drinks, snack foods, personal care and pet care.

 Intense declines in nonessentials and luxury products:- such as

cosmetics, luxury beauty and skin care, confectionary, and alcoholic beverages.
 FMCG COMPANIES
Growth in India's fast moving consumer goods (FMCG) sector is declining as
lower spending in urban centres and slowdown in rural growth. Consumer facing
companies forecasts are lower than what they expected earlier. Even shortage of
Fast-Moving Consumer Goods (FMCG) and essential commodities, and a sudden
increase in demand for certain medical and healthcare products.

Demad
supply
imbalance

Impact on Prices to
Labour
shortage FMCG remain
companies stable

shifts
towards
local
production

 The companies are facing the dual challenge of acute labour shortage
because of migration and fear of the Covid-19, which are creating demand-
supply imbalance, leading truckers and loaders to charge exorbitantly.

 To de-tangle growth from the grip of a slowdown, fast-moving consumer

goods (FMCG) companies are redefining their product and marketing
strategies, depending on their stage of evolution.
 Shifts are happening in atta, pulses, spices and edible oil with local brands
and some who are able to supply gaining share as their supply chains have a
fair degree of flexibility. Consumers bought the popular brands in early days
of panic buying and then settled for whatever was available in stores.

 FMCG industry has petitioned to remove GST on amount received by

dealers as reimbursement against discounts.

IMPACT OF COVID-19 ON AMUL

 Shortage:- From expected shortage, it is now a situation of a lot of milk

everywhere. After the lockdown was announced, on the first three days there
was panic buying as people were afraid that there would be shortage of milk
or milk products. But after three days, the reverse happened and demand
declined by around 30%.

 Migration:- People are migrating from bigger urban centres like Delhi,
Mumbai, Ahmedabad, Kolkata to rural India and so milk consumption has
declined in the cities. But now demand is picking up gradually. Last
Thursday, Amul sales had declined by 30%. Today, sales are around 12%
lower than the average.

 Closure of markets :- One development which has really caused a lot of

impact on the dairy industry is the closure of hotels, restaurants and tea
shops because these segments used to consume around 12 to 15 % of the
total milk produced.
 STEPS TAKEN BY AMUL

Amul to take precautions against the novel virus, and indulged in wordplay - better
‘saaf’ than sorry.

Amul increased production by 15-20 per cent for its biggest-selling products such
as tetra pack milk, paneer, cheese and butter. As milk and its products are
perishable, Amul doesn’t hold inventory beyond seven days, may it be milk, curd,
and cottage cheese or butter milk. In the changed scenario due to coronavirus,
GCMMF is seeing growth in e-commerce business.
 CHANGE IN CONSUMER BUYING BEHAVIOUR

 Emphasize quality and efficacy:-

consumers seeking for greater assurance that the products they buy are free of risk and of
the highest quality when it comes to safety standards and efficacy, particularly with
respect to cleaning products.

 Online Transactions:-
consumers are beginning to fear crowding and lack of inventory, shopping
less at wholesale and retailers due to which online shopping has increased 31
percent .

HOW TO REACH THE CONSUMERS

 Establish a remote work option : Where to expect your team to be online

or available, how to communicate what deliverables each team member is
responsible for completing.

 Sales strategy to online: So that consumers can order online.

 Provided goods at door steps:
Everything from groceries to personal care items and meals at your front
door in under an hour..

 D2C model:
D2C is a business model which allows buyers to get goods directly from the
seller/manufacturers without the help of any middlemen. Several e-
commerce websites are set for this purpose which helps buyers save money
as well as time.

PROBLEMS FACED OF FMCG COMPANIES

 Restriction :- Movement of products remains restricted because of the

paucity of trucks and restricted movement due to the lockdown.

 Approvals:- For some of their facilities, and process of resuming

production.

 Supply :- Supply of packaged essential goods could take a few more days to
stabilize .
 Manpower :- Less availability of manpower.

 Transportation :- For transportation of goods in market.