The December quarter earnings of India’s top FMCG companies have given a sense of how in-home consumption has shifted as the country opened up and consumers bought more than just essential goods.
Companies reported moderation in growth of packaged biscuits, flour and sanitizers as consumers went easy on such purchases and expanded their shopping basket to include personal care and discretionary products during the October-December quarter.
“The significant surge in demand for staples and convenience foods witnessed during the lockdown phase ebbed during the quarter with consumers broadening their purchase assortment and lower ‘at-home’ consumption on the back of increased mobility,” ITC Ltd said in its December quarter earnings.
As a result, ITC’s Savlon range of health and hygiene products sustained its high growth trajectory, albeit at a relatively lower pace as compared to the previous two quarters. Its Aashirvaad flour and Sunfeast biscuits, which had witnessed significant surge in demand in the first half of the year, moderated during the quarter.
Meanwhile, YiPPee! noodles and Bingo! snacks reported strong growth in the quarter. Marico’s Saffola cooking oil and oats reported strong growth during the December quarter helped by household penetration.
Heightened demand for staples and convenience foods benefitted companies in the first half of the year.
Britannia Industries reported a 6% growth in third quarter revenues, a climb down from the 26% year-on-year surge in sales reported in the first quarter.
“This reversed in just two quarters as Britannia reported a 6% growth in the third quarter due to increased mobility and lower consumption in offices, stations, etc,” said analysts at Jeffries. However, the company drove impressive margin expansion resulting in a strong earnings growth, they added.
Sale of hygiene products was more broad-based, with branded sanitizers reporting a sharp dip in sales growth.
Dabur India said the sanitizer category has become “commoditized” over the last few months and the momentum is lost.
Marico said launches in the hygiene segment – sanitizer, vegetable cleaner and out-surface disinfectants, etc – contributed to 1% of revenue till the third quarter of the current financial year.
However, going forward, the company has consciously withdrawn investments and defocused from this segment, it said.
Godrej Consumer Products, that rolled out over 10 new products in the hygiene and home cleaning segment, said the hygiene trend is more “broad based”. The company expects demand for cleaning products to sustain. “We just had the world’s largest master class immunity and hygiene, and we will see that play across a number of categories,” Nisaba Godrej, Chairperson and Managing Director, GCPL, said during the company’s quarterly earnings call.
Consumers are also back to buying more discretionary items as well as personal care products as markets opened up and festive-led movement prompted them to spend more.
Hindustan Unilever’s beauty and personal care segment witnessed a 9.7% y-o-y revenue growth in the December quarter aided by price hikes taken in the personal wash category. In the June quarter, category sales growth was down 12%.
Discretionary and ‘out-of-home’ consumption products witnessed smart recovery buoyed by pent-up demand and increased availability across channels, ITC said.
Marico’s value added hair oils saw a 21% volume growth in the third quarter.
The company’s more premium personal care products such as hair nourishment, male grooming and premium skin care, reported sequential revival in demand during the quarter, but posted a 4% volume decline year-on-year.