COVID-19 pandemic has disturbed the operations of FMCG companies in India, undoubtedly. Some of the top players having a large portfolio hassomewhat managed to deal with the pandemic. But the lock down restrictions has majorly affected the supply chain system of the companies and lower consumer demand caused the slowdown in the FMCG sector.
During the lockdown period, the food consumption at home increased and companies like Britannia Industries Ltd and Tata Consumer Products Ltd have gained from this. Industry leader Hindustan Uniliver Limited had witnessed a consumer growth decline by 7 percent. In June quarter around 80% of its portfolio, comprising health, hygiene, and nutrition products, expanded 6%. Rest 20% of its portfolio including food solutions, skin care products, and cosmetics witnessed a decline in sales.
Rise in-home consumption helped Britania Industries to achieve 26.7 % year-on-year growth in consolidated revenue. Similarly, Tata Consumer Products showed a 13% growth in revenue, and ITC’s food segment also gained growth in terms of revenue. But Nestle India Ltd’s domestic revenue growth for the June quarter slowed to 2.6%. This is because the company failed to leverage third party distribution to drive cost savings and cut down the promotion cost. Lower demand in out of the home channel and production disruption in all the factories also led to the underperformance.
The overall performance of Godrej Consumer Products Ltd saw a decline in sales because the African performance lagged whereas the Indian and Indonesian marked managed well. The Healthcare portfolio of Dabur India Ltd performed well even as foods suffered due to lower demand for cold beverages. Colgate Palmolive (India) Ltd’s revenue drop was stood at 4% as the oral care category remained unaffected by COVID. Marico Ltd’s revenues fell 11% as the Indian business was weaker.
However, the Firms launched new products suited to the pandemic across food, hygiene, and health categories to reduce the loss. Dabur had more than 50 launches in the past few months. This contribution increased to 6% of Dabur’s June quarter revenues. GCPL had about 45 launches. The stock market performance also shows some recovery in the FMCG sector. The Nifty FMCG index has gained 4.9% so far in 2020, compared to a 6.5% drop in the Nifty 50 index. Tata consumer share showed a new 52-week high on NSE and Britania showed a 20% hike in share price compared to the pre-COVID price.
