When the going will get robust, the robust will get going — it’s in all probability the most overused phrase amongst millennials, however by no means has it carried the weight that it does in the present state of affairs the world is caught up in. Almost a worldwide lockdown and a relentless risk to life has pushed everybody inside 4 partitions of their houses and made individuals rethink their actions and actions. Brands aren’t unscathed both. Some of the prime enterprise organisations and retail chains have crumpled beneath strain, leaving many questioning if these company giants even had any plan of motion for such an emergency. Surprisingly, some of the native and fairly new-age corporations have risen as much as the event and managed to ship properly.
“Local brands have a more local supply chain – that makes it easier for them to manage disruptions in times like these. I believe it is not a matter of less or more trusted choice, but the fact that there was no choice in some cases. Hence, availability trumped everything else,” Abheek Singhi, senior accomplice and managing director at The Boston Consulting Group tells Brand Equity.
In India, the sudden enforcement of nationwide lockdown on March 25, left many massive brands with shares caught in the pipeline.
Gaurav Baheti, founder and CEO of provide chain administration firm Procol, says, “Considering the fact that more than 95% buyers purchase essential goods through their network of sellers and brokers, there is a need to discover new reliable vendors who could help with required fulfilment. Availability is the key right now. Smaller brands have been able to capture that aspect well.”
Retailers say smaller and regional client items merchandise have been outpacing bigger market chief brands in gross sales in practically a dozen key classes as customers decide availability on cabinets over loyalty. Be it the city-based snacks corporations or some higher identified ones equivalent to Garden (owned by CavinKare) and Baggrys, munchies and able to cook dinner objects have been flying off the cabinets quick. With most meat outlets shut and customers turning into more and more hygiene aware, demand for packaged and frozen meat from corporations equivalent to Mumbai-based Zorabian Chicken has additionally seen a big surge in demand. Easier availability of native gamers at the subsequent door kirana shops has performed a giant function on this demand and consultants really feel this might result in a bigger shift in consumption patterns as individuals might get used to a relatively decrease priced model.
According to Nielsen, share of the prime three brands in the hand sanitiser phase dropped from 85% in January and February to 39% in March after 152 new gamers entered the phase. In packaged rice in trendy commerce, prime three brands cumulatively misplaced their share from 72% in February to 64% in March.
“What worked for us is that we own our entire supply chain and have a robust distribution network. One of the key decisions we made during the lockdown was to scale down the operations and provide only the essential products, like idli dosa batter, chapati, parotta, paneer etc in all markets,” says PC Musthafa, co-founder and CEO, iD Fresh Food.
Brand positioning and social picture, too, has been a spotlight space for many of these corporations at this level because it might go a good distance in making a optimistic impression on the client’s thoughts.
Rohan Mirchandani, co-founder and CEO of yogurt model Epigamia says, “We realised that despite the restriction imposed on the movement of people and goods, we had to resume our supply lines to ensure the availability of food in the retail stores. We re-engineered our operation and resources and worked closely with state authorities to gain the requisite permission to run our supply infrastructure to service the stores. Realising that many of our consumers are still unable to find us in-store, we set up a direct to consumer platform for them to order from us directly.”
Even meat supply platform Licious has been fairly lively when most e-commerce chains have been dealing with supply challenges. “Given that we own, control and manage the entire supply chain, Licious has been in a position to respond swiftly to the changing ground realities in the wake of the pandemic. We have been airlifting some part of the raw material, especially for cities where local sourcing is difficult at the moment. Across Bengaluru, Hyderabad, Delhi-NCR, Chandigarh, Mumbai, Pune and Chennai, we have witnessed a 200 per cent surge in demand during the lockdown period,” Licious co-founder, Vivek Gupta, tells BE.
Startups equivalent to meals model Soulfull, owned by Kottaram Agro Foods, have introduced tech into use to work round the state of affairs properly. Says Prashant Parameswaran, MD & CEO, Kottaram Agro Foods, “As a startup, we wouldn’t have regional HR groups for each metropolis/state and our leaders from the gross sales crew moved into being the CEO’s for the area and took on the spot choices. Our gross sales crew not solely collected orders by way of cellphone or with our app but additionally ensured supply by taking their autos or distributor autos. We had set ourselves right into a war-zone mentality. Some of our areas delivered gross sales which had been as a lot or if no more than the pre-Covid instances. We even enabled a retailer locator on our web site for our prospects to know which shops are open of their space and what merchandise of the model they’d in inventory.”
Snacks firm True Elements’ co-founder Puru Gupta, who anticipated the disaster says, “Thanks to our China learnings and connections, we anticipated this situation to some extent in the middle of January itself (though not this level of scale.) We worked out a detailed business continuity plan. From the first week of March, we moved our migratory population to live inside the factory with their food and entertainment taken care of. As a result, we had zero production loss in our plant – the only loss was due to a broken logistics system which we managed in Pune and Mumbai through our vehicles.”
But the query to be requested is whether or not customers would proceed choosing these newer brands in the future or is that this surge in demand only a manifestation of the panic in the air?
“In the first two weeks of lockdown, anything that was available, sold. Many smaller and new brands gained sales in that period. But I would wonder, if consumers were making a choice for a brand at all. People panic bought categories – atta, soybean oil, biscuits, noodles, ghee, hand wash and not brands. Some new brands ended up going to new consumer homes. Very good for them,” says Damodar Mall, CEO – Grocery, Reliance Retail.
Nielsen has slashed its 2020 progress outlook for India’s fast-moving client items sector to 5-6% from its earlier projection of 9-10%, however massive brands, with their monetary energy and bigger distribution chain, can bounce again aggressively as soon as provide chain disruptions ease. This, in flip, may once more harm the smaller brands.
“I would not see this (fall in demand during lockdown) really as an issue with big brands. They finally have the capability to reorient the supply chain quickly,” says Pinakiranjan Mishra, accomplice & sector chief, Consumer Products & Retail, EY India.
In the future, numbers will nonetheless be in favour of company behemoths, however youthful brands are properly conscious of how this case can function a chance for them to make a long-lasting impression.
Srini Vudayagiri, CEO, Unibic Cookies, says “We have been utilising this time to get back to the drawing board and come up with a sound post-lockdown plan. Our strategy is to tap into this opportunity to reinforce our brand messaging and help connect with new customers. Furthermore, the plan is to continue to stay connected, especially in these times of physical distancing. Another focus area is staying connected with over two lakh trade partners and business associates, as we help each other weather the storm.”
“Given that there are no fixed formulas to surviving a pandemic or doing business in a lockdown situation, we have to be quick on our feet … The biggest lesson has been to be adaptable to the fast-changing ground realities,” he concludes.
“There isn’t any template to observe. We needed to unfold the message of love and hope. That’s the purpose we launched an early Mother’s Day Campaign – for what may be extra comforting than a mom’s love?
The most essential lesson we’ve got learnt is to not take something with no consideration… If you had informed me two months in the past that the firm may be run remotely, I wouldn’t have believed it. But we’re doing it now! We have decentralised the decision-making course of to assist deal with the altering dynamics of every area. Flexibility has been the key.” PC Musthafa, CEO & co-founder, iD Fresh Food.
“We need to be super nimble, yet wedded to long term objectives. Our business models were re-engineered to meet the times and we did the same, be it the way we now supply to stores or the new D2C model. All of this was done with a clear thought on how it met our big picture of the long-term goals.”-
Rohan Mirchandani, CEO & co-founder, Epigamia.
“As a young company, we pride ourselves in our agility and that’s what allowed us to make a few quick amends in our delivery model to suit the situation. Other than moving to the slotted delivery models and forging quick partnerships, we also initiated consolidated delivery to large apartment complexes. This reduced the pressure on the delivery system while allowing us to serve a much larger number of consumers. Our decision to hire hotels to house all employees working in the processing plants during the lockdown, adhering to stringent safety measures, has strengthened our sense of team spirit. In fact, most of our new recruits have come through references from our current employees.” – Vivek Gupta, co-founder, Licious.
“Post the panic buying stage, things are different in our stores. Let’s talk about instant noodles as an example. As a supermarketwala, I love all the brands of noodles I sell, including our private brand SnacTac. However, as a student of consumer behaviour, I have to say, in these otherwise disturbed times, a bowl of Maggi feels safer, warmer, cosier than a bowl of SnacTac or any other brand! When many things are uncertain and tad scary, people like to reduce variables around them and seek comfort in the known and trusted. I wonder if I would go for a newbie gluten free idli mix with unfamiliar credentials, or a trusted rava idli mix from MTR.” – Damodar Mall, CEO Grocery, Reliance Retail.
“The thing that has mattered the most in these times is the 4th P of marketing – that is ‘place’. Our research has indicated that availability at the retail point has been the most important element of marketing. In light of that, all FMCG companies have pulled all stops to ensure last mile availability. Consumers are concerned and cautious about the future – due to both the virus and the economy. Our research clearly shows that they expect to spend less across most categories. Consumer choice at these times is driven by a set of interrelated factors – trust and security is more important than ever; the sense of minimalism and desire for small pleasures will co-exist.” – Abheek Singhi, senior accomplice and managing director, The Boston Consulting Group.
“I would say the winner would be the brands that can understand the shifts in consumer behaviour quickly and reorient their product range and channel to meet their demands. While smaller players are nimble in this, the big companies have an advantage now of not working full steam and hence a lot of management bandwidth available to address these issues. In fact the larger players who are cash rich have a great advantage in using their scale and might to change much faster this time.” – Pinakiranjan Mishra, accomplice & sector chief, Consumer Products & Retail, EY India.
- 5-6% – Nielsen’s progress outlook for FMCG sector for 2020
- 9-10% – Projection earlier than Covid-19 pandemic occurred
- The sector noticed early indicators of restoration in Jan and Feb
- March 25 – Nationwide lockdown got here into impact
- May 18 – Date until which lockdown is to final as per present instructions
- Possible authorities stimulus, low-cost crude oil and low inflation could assist submit Covid-19 enterprise
- Lockdown resulting in a drop-in consumption and shift in preferences
- People are shifting away from discretionary spend and specializing in monetary safety: Nielsen report
- A McKinsey research reveals about 65% of the customers have tried new or alternate brands, of which practically 10% intend to not change again