Distributors of fast moving consumer goods (FMCG) are finding it hard to get stocks of daily essentials, especially packaged foods, such as noodles, certain brands of biscuits, pasta, salty snacks, and small packs of dish-washing products, as lockdown-related hiccups in supply of goods continue to impact stocks, said All India Consumer Products Distributors Federation (AICPDF).
“There is a lag between production and supplies and it is hitting the market now," said Dhairyashil Patil, national president, AICPDF.
The situation has been aggravated as FMCG firms have resumed production, but have not returned to full capacity utilization. Some are operating at 50-70% of pre-covid production capacity.
“As production was shut in March and April, many people used their buffer stock. So, April was good for all distributors, because they were still receiving stocks. However, since 25 April, supplies have fallen, especially in food." The situation will improve in eight to ten days, Patil added.
The problem is greater in the processed food segment, where consumption has been high during the lockdown, said Subhashis Basu, chief operating officer, Prataap Snacks, which makes namkeen and chips.
Food accounts for roughly 58% of the value of FMCG goods sold in India. Consumers stocked up on such items, given the pivot towards home-cooking during the extended phase of the lockdown.
Basu said the stock pipelines dried up and as production and logistics are not yet in full swing, “there are some shortages in the market". The company is trying to ramp up production and supply chains, he added.
When the lockdown started on 25 March, shoppers rushed to stores and bought household staples such as packaged flour, rice, cheese and breakfast cereals, Nielsen said in the second edition of its covid-19 impact report on retail and FMCG in April.
Companies were also forced to temporarily suspend operations in some plants and warehouses. This disrupted supplies of essentials during the first phase of the lockdown.
FMCG distributors complain of shortage in supplies of essentials.