FMCG consumers turning to value packs and downtrading amid Covid 19

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Consumers have reprioritized their purchases on their needs to reduce the monthly household expense as there has been a sharp decline in salary cuts and employment rates due to the lockdown. Non-consumable FMCG product has been seeing a sharp decline in their sales because of this consumer behaviour.

As the lockdown continues taking its toll on the economy, there have been salary cuts and job losses which are making Indian consumers less interested in the purchase of packaged foods and cosmetic products and they are opting for the purchase of low-value packs.

Fast-moving consumer goods firms had seen shoppers stockpiling packs of home care products and packed foods during the initial phase of the lockdown in India. FMCG companies say that they are now seeing customers downtrading with the extension of the lockdown.

Angshu Mallick deputy CEO of Adani Wilmar Limited who is the maker of edible oils and packaged goods under the Fortune brand has said that an increased number of people are buying smaller value packs as demand for larger bulk packs has declined drastically. He also said that their ratio of consumer packs and bulk packs has changed from 65-35 earlier to 85-15 now. This is because restaurants are closed and they are the ones who mostly purchase in such large quantity and regular consumers don’t buy that much for their homes. 

The company that sells packaged flour among some of their other food products said consumer packs or those up to 5 kg are witnessing more demand as consumers are stocking up on these packed food products.

Marico’s Managing Director Saugata Gupta said that the company is “thinking about a low-value smaller package strategy to allow consumers to purchase some of these products without having a heavy impact in their already slim wallet.

Kavita Angre who is the chief of media, consumer, and marketing insights at L’Oréal India quoted that “In FMCG, a lot of the ‘want’ or discretionary categories could get impacted, while ‘need’ categories will still see demand. She also said that downtrading could happen, i.e., consumers will shift to buying cheaper brands. Depending on the depth of their economic stress”

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