The third wave did little to lower demand for packaged goods

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Out-of-home demand for packaged goods exceeded expectations in the quarter ended March despite the third wave of Covid-19 in January, according to companies reporting their fourth quarter results.

“Despite the third wave of Covid which impacted January sales, the out-of-home business delivered better than expected results in the first quarter, mainly due to faster channel openings,” said Nestlé India. in its results update.

The country’s biggest food maker said growth for Maggi sauces and seasonings had been hurt by a high base and a gradual shift from home cooking to out-of-home consumption, with offices and restaurants gradually reopening. schools.

Out-of-home channels, including school and college campuses, offices, restaurants and bars, cinemas, airports and entertainment complexes, serve as crucial outlets for the impulsive or discretionary categories. They have been hit hard by lockdowns, closures and other restrictions since the outbreak of the pandemic in March 2020.

In his quarterly earnings call for investors after the March quarter, Coca-Cola Chairman James Quincey said, “In India, we drove integrated execution as consumer mobility improved across all channels by increasing product availability, adding approximately 240,000 outlets and over 50,000 coolers.”

Ice cream, which relies heavily on impulse consumption, saw healthy demand not only with the early onset of summer, but also the return of forklift vendors to cities, and the revival of tourist travel. business and leisure as well as general mobility.

A spokesperson for Mother Dairy said its ice cream sales were up more than 50% from pre-Covid levels. “While the increase in demand is across all categories, we are seeing demand shift more towards the impulse category,” the person said. Sales of major consumer packaged goods manufacturers have been stressed due to lower rural demand and inflationary pressures, which have caused consumers to shift to cheaper products in both urban and rural markets. However, normality and the reopening of out-of-home channels have brought some relief to the sector, analysts said.

Brokerage Motilal Oswal wrote in a recent report on PepsiCo bottler Varun Beverages that the soft drink category is an outlier and expects further recovery in out-of-home consumption as business operations resume and travel activities.


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