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Health, hygiene, organic products to drive consumer demand post-coronavirus

Coronavirus impact: One key trend is that affordable health, hygiene, and organic products will see an unprecedented surge in demand. More than 60% of consumers say they are willing to pay up to 20% more for healthier products

Sonal Khetarpal | June 22, 2020 | Updated 16:30 IST
Health, hygiene, organic products to drive consumer demand post-coronavirus
Coronavirus crisis: Consumers will choose brands they trust

The outbreak of coronavirus has changed consumer buying behaviour drastically. It has made people conscious about what they are buying and consuming. They are questioning their consumption pattern. There is a significant movement towards healthier 'good for me' products.

The report 'CPG Perspectives: How brands can thrive in the new normal' by management consulting firm Kearney observes the trend in its study done on 30-plus CXOs and operations leaders across FMCG firms.

One key trend is that affordable health, hygiene, and organic products will see an unprecedented surge in demand. More than 60 per cent of consumers say they are willing to pay up to 20 per cent more for healthier products. Companies that can position health branded products in the affordable, mild-premium range of 10 to 20 per cent are likely to win in the new normal.

Also read: Coronavirus crisis: E-commerce sales volumes back to pre-lockdown levels

Rajat Tuli, Senior Principal, Consumer and Retail Practice for Kearney, said, "We expect health, hygiene, and organic products to see an unprecedented surge in demand provided they are affordable or charge a marginal premium up to 20 per cent. Further, reaffirming the value offered for the price charged will now be more important to retain customers and attract new ones."

Consumers will not want to experiment and will choose brands they trust. They will seek more information and expert opinion rather than a celebrity endorsement. 

Also, home-based indulgence will rise as consumers spend more time at home. Indulgence which earlier involved eating out and travelling will not grow but consumers will spend on premium products to pamper themselves at home.

Also read: Save MSMEs campaign! Easier access to Rs 3 lakh crore loan scheme, GST rebate among top demands

Earlier consumers preferred brand that resonated with their personal choices and values. But, post-COVID-19, as household finances take a cut, consumers will spend more on 'value for money' products instead of focussing on its values. Also, consumers will be more open to try new products where they find lower price alternatives of the products they buy.

Online delivery will continue to play a crucial role. Following the announcement of lockdown, demand across e-commerce platforms saw a dramatic surge in volumes and value. Grocery platforms such as Grofers and Big Basket saw a three to five times increase in daily demand. New players have also arrived in the form of hyperlocal delivery experts such as Zomato, Swiggy, and Dunzo expanding their services to the grocery category. Now FMCG players will look for direct-to-consumer channel and doorstep delivery will become essential here.

Also, digitisation will get increasing attention. This would include front-end automation in taking orders, mechanisation in manufacturing and warehousing, and use of the latest IT tools to enable dynamic demand sensing and scenario planning.

Also read: Border backlash on trade! Duty hike coming on all Chinese imports except medicines

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