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Wider reach, lower unit packs, in-home consumption: Food companies' COVID-19 strategy

With factories operations and supply chains mechanisms pretty much normal, FMCG companies, instead of re-prioritising their stock-keeping units are ensuring that they are available more widely

twitter-logoAjita Shashidhar | April 30, 2021 | Updated 19:44 IST
Wider reach, lower unit packs, in-home consumption: Food companies’ COVID-19 strategy  
Food companies have a plan to tackle COVID-19 second wave

During the first wave of the COVID-19 pandemic last year, when manufacturing and supply chain of all FMCG companies came to a halt, biscuit manufacturer, Britannia Industries had devised an 80:20 formula, and chose to manufacture only 20 per cent of its stock-keeping units (SKUs) which garnered 80 per cent of the company's revenue. It only manufactured popular brands such as Britannia Marie, Nutrichoice, Milk Bikis and Good Day. Even within Good Day, it chose to manufacture only Good Day Butter and Good Day Cashew.  

As the second wave of the deadly pandemic engulfs the country, the biscuit-maker doesn't feel the need to re-prioritise its portfolio. Despite the virus being more lethal this time round, manufacturing and supply chain hasn't derailed. Therefore, the company is making sure that all its brands and SKUs are made available to its consumers through multiple channels. "We have stocked our distributors adequately to meet any potential surge in demand. We have also implemented a new real-time dealer management system that ensures quick conversion of orders, thereby ensuring product availability at any given time. Moreover, the brand mix is also being prioritised to meet distinct requirements across regions in the country, backed by appropriate inventory management at our depots and factories," says Vaun Berry, MD, Britannia Industries.

With factories operations and supply chains mechanisms pretty much normal, FMCG companies, instead of re-prioritising their SKUs are ensuring that they are available more widely. Nestle India, which has nutritional as well as snacking products in its portfolio, has been trying to push products like chocolates, ready-to-drink coffee and other confectionery products in chemist stores where it usually sells only its nutrition portfolio. "We are continuing to work with all the channels including chemists to ensure availability of much needed food and beverage products," explains the Nestle India spokesperson.        

Mondelez India, says Praveen Dalal, Senior Director, Sales, apart from widening its distribution, has increased its focus on expanding the availability of lower unit priced offerings across the Oreo, Bournvita and Cadbury Dairy Milk brands. "By moving stocks closer to the market and building buffer inventory at our factories, we ensure an uninterrupted supply of products across channels. Additionally, we have tweaked our forecasting mechanism to make it more agile, dialed-up collaboration across the supply chained, demand and sales teams. Shorter decision cycles, data analytics at a granular level are guiding our decisions to ensure good service across channels and geographies," he said.

Hershey India on the other hand, has rationalised 10 per cent of the SKUs in its out-of-home portfolio. The company's focus in the past year has been on in-home consumption categories such as Hershey's syrup, Hershey's Milkshake, Hershey's Spreads and Hershey's Cocoa powder along with Sofit Soya Milk and Sofit Almond Milk. "With the increase in home baking and cooking with our products, we have prioritised those products to meet the substantial shifts in consumer demand, based on the new purchasing dynamics that have emerged with the pandemic," explains Hershey India spokesperson. 

Also read: HUL, Marico, ITC, Godrej Consumer say better prepared to tackle COVID-19 disruptions this time

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