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This week in FMCG: COVID-19 impacts peak season sales of ice cream, cola makers while essentials witness surge

The second wave of the pandemic has impacted the consumption of discretionary products such as ice cream and non-alcoholic beverages, while products such as soaps and sanitisers have found a new lease of life.

May 23, 2021 / 01:56 PM IST
B.athing soaps registered an 11 percent month-on-month (MoM) growth in April

B.athing soaps registered an 11 percent month-on-month (MoM) growth in April

 
 
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Much like the first wave of the pandemic, the second wave, too, has impacted the consumption of various FMCG products across the country. Though the sales of personal care products such as shampoos, conditioners have been hit, sanitisers and soaps have witnessed an uptake again, shows data from Bizom, a retail intelligence platform.

According to the company, bathing soaps registered an 11 percent month-on-month (MoM) growth in April, while sanitisers and handwashes grew 22 percent MoM during the period, revealed data from Bizom.

The sales of overall personal care products, however, declined 33.8 percent month-on-month (MoM) in April.

In the foods and beverages portfolio, ice cream makers and cola makers such as PepsiCo and Coca-Cola are struggling during their peak season, for the second year in a row.

Coca-Cola, Pepsi lose fizz

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Crisil Research in a report released on Friday said that the second wave has flattened the fizz for non-alcoholic beverage makers.

“India’s non-alcoholic beverages industry, led by cola giants Pepsi and Coca-Cola, is unlikely to reclaim pre-pandemic levels this fiscal. Indeed, despite some claw-back after an estimated decline by a fifth last fiscal, revenue will still be 10 percent short of the fiscal 2020 mark,” the ratings agency said in the report.

However, it added that the credit profiles of players remain resilient because of their cost-control measures, strong balance sheets, and ample liquidity.

Last fiscal, too, the sales of Pepsi and Coca-Cola were impacted due to nationwide lockdown, which coincided with their peak season that alone accounts for two-thirds of their annual sales. Crisil Ratings says with the recent curbs, these companies are bound to see a repeat of the last year.

Dismal summer for ice cream

Ice cream makers Amul, Arun Icecreams, Naturals Ice Cream also are sailing the same boat and are witnessing a slump in sales due to the second wave. The companies operating in the segment are in for another bleak summer as lockdowns in many parts of the country have wiped out 35-40 percent of peak-season sales.

Summer months are the peak season for ice cream sales in the country and according to industry estimates, most companies draw about 40-60 percent of their entire sales and 80 percent of profits during the period.

RG Chandramogan, Chairman of Hatsun Agro, said the peak summer season is expected to be a complete washout this year too. The company expects to clock 40-45 percent of its pre-pandemic business for ice cream in FY22.

Q4 earnings: A mixed bag

Unlike most FMCG companies, Jyothy Labs reported muted results earlier this week on Wednesday for the fourth quarter ended March (Q4). It registered a 2.59 percent rise in consolidated net profit at Rs 27.28 crore for the March quarter of the last fiscal year, on account of the exceptional expense of Rs 23.5 crore.

It had posted a net profit of Rs 26.59 crore in January-March 2019-20. Revenue from operations was 26 percent higher at Rs 495.11 crore during the period under review as against Rs 393 crore in the same period a year ago.

Dairy player Heritage Foods, meanwhile, fared better during the quarter.

Heritage Foods on Thursday reported a net profit of Rs. 24.28 crore in Q4 as compared to a net loss of Rs. 209.21 crore in Q4 FY20. Its sales during the period stood at Rs 619.36 crore as against Rs 652.65 crore during the quarter ended March 2020.
Devika Singh
first published: May 23, 2021 01:56 pm

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