FMCG companies log sales growth after Unlock 2.0

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New Delhi: FMCG companies are witnessing an increase in sales after Unlock 2.0 with easing of curbs on trading and movement by state governments and local authorities due to falling number of Covid cases. States began lifting restriction in the first week of June.

Companies are witnessing a tailwind in sales, particularly in their health & hygiene portfolio – both in urban and rural markets.

Unlock 2.0 has also increased the convenience of business for companies as earlier distribution was limited to certain hours in a day in several states due to restrictions and filling up the empty shelves was a challenging task. Moreover, some players also expect the current quarter to be a better one for the FMCG industry, helped by an increase in sales and convenience of business.

Dabur India CEO Mohit Malhotra said as several states are unlocking and local markets are opening up, consumer demand is showing an uptick.

“The drop in Covid cases has not only boosted consumer sentiments but also helped the supply chain recover from the Covid-19-induced disruptions. We are seeing a tailwind for our healthcare portfolio, particularly in rural India, with demand growing for Chyawanprash, Honey and immunity-building Ayurvedic products,” he said.

Jyothy Labs Joint Managing Director Ullas Kamath said from the FMCG perspective, most of the goods were in the essential category and our business was normal.

“After lockdown has been opened, we are seeing a better traction,” he said adding “Now a feel-good factor has come though there is a fear of a third wave”.

Now products from health & hygiene such as personal care products, body wash, soap and dish wash are doing well.

“These products were doing well even in lockdown but ease of doing business has become better and that is an advantage,” he said adding that now operating hours of stores has been extended which allows the company to refill stocks.

Ease of doing business has been increased post unlock as in several cities, the distribution time to the store for refilling the stocks was limited to few hours during lockdown.

“For example, in Bengaluru distribution time was 6 to 10 in the morning and our people use to struggle in that time. Now the time has been extended up to 5 PM, and we would have some breathing time,” Kamath added.

According to him, even in the last quarter, FMCG companies did well with double-digit growth and should do well in this current quarter also.

“Rural and urban – both are doing well and modern trade would take time as a big portion are not open yet. E-commerce and general trade are also doing extremely well,” he said. Echoing similar views, Edelweiss Financial Services Executive Vice President Abneesh Roy said “ it had to happen”.

“It was not a demand issue in May but got impacted due to high Covid cases leading to the closure of many shops and lesser number of opening hours for shops. Both have now reversed. Sentiments are sharply improving as Covid cases have fallen, apart from good rainfall, hike in MSP etc,” he said.

Roy further said discretionary food and personal care will see the sharpest recovery, though other product segments will also grow.