As India battles the second wave of the COVID-19 pandemic and most parts of the country is under a strict lockdown, FMCG majors claim that they are better prepared to tackle disruptions this time round. The biggest learning for them in the last one year has been to build a strong crisis management mechanism. From setting up smaller warehouses closer to market to building direct-to-consumer models and integrating technology into their distribution and supply chain network - the FMCG majors say their factories are working full time and their supply chain is fully functional.
"The learnings from last year have helped us to be better prepared and we have quickly reactivated all the initiatives and protocols on the ground. While the system is significantly stretched because of the unprecedented surge we are managing to cope with it because of our agility and resilience," says Saugata Gupta, MD & CEO, Marico. "We have re-initiated all business continuity processes such as tele-calling retail outlets for demand capture and tie-ups with logistics partners for demand fulfilment. We have also implemented a robust tracking and communication mechanism with the field team and channel partners so that information can quickly flow to the right stakeholder and quick decisions can be taken on the ground," he further adds.
In April last year, ITC had rolled out itc.in, its direct to consumer platform, through which it sells the entire gamut of its FMCG products. The e-store had also added a subscription service, through which it sells its fresh dairy products in Bihar and West Bengal. The company has now expanded its e-store across all the metro cities. "ITC has taken all necessary steps to ensure enhanced availability of products for consumers across all channels. Over the period of the pandemic we have developed strong operating policies and agile organisational structures for dealing with all types of market constraints and volatility. We are confident that our robust supply chain system will ensure that all sales channels including e-commerce are serviced adequately," says B. Sumant, Executive Director, ITC.
The FMCG head honchos unanimously say that there has been no disruption neither at their factories nor at the supply chain and distribution end. "From a business continuity point of view, this time there are no sudden shocks that have happened," says Sunil Kataria, CEO (India & Saarc), Godrej Consumer Products.
"We are not facing any challenge with migration of labour since all our operations are going on and everyone is gainfully employed," adds ITC's Sumant.
However, employees contracting the virus and the disruption thereof, is indeed a worry for all of them. Sanjiv Mehta, Chairman and MD, Hindustan Unilever claims that the company has built a robust crisis management system to ensure that the disruptions are minimal. "All our factories are operational and the supply lines are running. While our people have contracted the virus, we have a back-up plan for not just our salesforce, but for the entire company, including the management committee," Mehta said at the company's annual results virtual press meet.
Since the second wave of the virus is more lethal, most companies have asked their sales team to work from home, which according to Kataria of Godrej is bound to impact business. "We are asking our salesforce to sell remotely, that will obviously impact productivity. After all, a lot of hard-selling happens by going shop to shop," he explains.
To add to this, there are also restrictions on shop timings which limits the window to distribute products. People aren't stepping out to buy either and this is bound to have an impact on last mile sales. HUL's Mehta admits that the last two weeks of April has seen a dip in consumption, but he doesn't want to hazard a guess that the coming months would get tougher. "Even in places where there are localised lockdowns, we are able to deliver," he says.
The silver lining for FMCG companies across the board is not just their ability to spruce up their direct-to-consumer reach through their websites but also the trade's willingness to embrace digital. Apart from ITC, Marico, says Gupta, has also seen considerable traction on its Saffola Store web site. "It offers an easy and accessible platform to consumers to directly place orders from the safety and comfort of their homes. The platform provides our consumers with easy access to our portfolio of essential products, immunity-boosting foods, as well as hygiene products. Additionally, we expanded our D2C approach to some of the premium personal care and food brands in order to capture demand directly from our consumers, enabling us to service them through an elaborate e-commerce model," Gupta explains.
HUL in the last one year has got over 5 lakh retailers to order products through its Shikhar App. ITC's B2B app, Unnati, has done well too. It has also launched VIRU (virtual salesman), a digital ordering and scheme communication platform.
Mehta in HUL's results call had mentioned that in the past year the FMCG major has built resilience to combat unforeseen events such as the COVID-19 pandemic. "If there is a fluctuation in demand, we can cope with it," he said.