MUMBAI: The national lockdown from March 25 to combat the coronavirus pandemic left the ready-to-cook and snacks category reeling as curbs on the movement of goods and economic activities led to supply chain disruptions and caused massive production losses, posing hurdles for all stakeholders including consumers.
The government has extended the three-week lockdown by another 18 days to May 3, to arrest the spread of the deadly coronavirus pandemic that has taken close to 1.46 lakh lives globally, including close to 440 in India.
Meanwhile, the Centre has eased some curbs by issuing revised guidelines to enforce lockdown 2.0 -- allowing movement of all types of goods, essential and non-essentials, among several other relaxations.
Lack of employment and the resultant pains in continuing to live in cities have created a crisis of reverse migration as millions of daily wagers returned to their homes, bringing down production in many sectors, including FMCG companies.
Unofficial estimates say nearly half of the over 14-crore migrant workers have left for their homes and are unlikely to return soon. "Since the lockdown, our manufacturing has come down to just about 15-20 per cent as our workforce mainly comprises migratory workers, who have left for their homes. We are manufacturing with only 15-20 per cent manpower, those staying nearby," Krishnarao Buddha, senior category head at Parle Products, told PTI.
He adds that this has also caused a breakdown in supply chain as well and it has become a huge challenge to send supplies to distributors in the absence of truck drivers. Snacks and condiments are very much in demand and needed in families especially with children or senior citizens.
"The ready-to-cook, snacks and condiments makes it easy for people who are working from home and have children and senior citizens to take care. Same is the case with bachelors/students. Therefore, this category should have been in the essential goods list," he opined.
CG Corp' executive director Varun Chaudhary said since the lockdown was declared unexpectedly almost all FMCG companies are facing distribution challenges. The company sells instant noodles under the Wai Wai brand. "As state-to-state procedures are different, inter-state transportation is restrictive," he said.
"We are trying to distribute in as many cities and localities as possible by following regulations. Within each state, in certain cities we are getting permission to distribute but in some cities it is still a challenge," he stated.
He said that shortage of trucks and drivers is another challenge as many trucks were stuck at various check-points and interstate borders. "We had a good amount of stocks with our distributors. And now we are ramping up our efforts to replenish the stocks. Factory dispatches have improved in the past few days and we have been able to dispatch sizable stocks since then. We are also present on e-commerce platforms like Big Basket and Grofers. We are in the process of widening it further," he added.
With some relaxations announced from April 20 for manufacturing outside cities, he hopes supplies will improve over time. "But for complete normalcy, we will have to wait. But with gradual improvement we will be better placed to meet demand. E-commerce players like Bigbasket and Grofers, essentially servicing groceries, are ramping up their manpower, which should help fill the gap between demand and supply. Non-traditional groceries e-commerce platforms are tweaking their operations for this," he said.
He said FMCG companies are grappling with operational challenges and are under continuous pressure due to several factors like under-utilisation of capacity due to shortage of workforce along with incurring extra transportation cost due to hindrance in movement.
"However, with the revised guidelines from April 20, it is expected that we will overcome the problems of transportation to some extent, which will help ease in supply of our products," he added.
Meanwhile, Navin Tewari, CEO of Capital Foods that offers desi, Chinese and condiments under Ching's Secret and Smith & Jones brands, is expecting a V-shaped recovery if the lockdown is lifted on May 3.
"Some pockets are already showing an uptick in demand. Typically, aata, daal and chawal are looked upon as basic food items but noodles, pasta, snacks, and schezwan chutney have become equally mainstream. We have already seen a 50 per cent increase in demand for such products in some cities. We see good demand from eastern and northern states. But not elsewhere barring Bengaluru where we are seeing substantial growth in demand," he added.
He said the company is getting a very strong connection with neighbourhood stores who are catering to consumers particularly in the North and in the West. Going forward this trend may continue at least through 2020. "We are back to 75 per cent of production level in some categories even though we are employing only 45 per cent of the manpower," he said.