The All India Consumer Products Distributor Federation (AICPDF) said most companies are unable to service the order generated by the distributors and if the situation continues, then panic buying would begin again, like when the lockdown was first imposed in March.
Distributors of FMCG products say there could be a shortage of biscuits, noodles and chips in the next 10 days if companies are not able to ramp up production and if transportation remains constrained by the paucity of labour.
The All India Consumer Products Distributor Federation (AICPDF) said most companies are unable to service the order generated by the distributors and if the situation continues, then panic buying would begin again, like when the lockdown was first imposed in March.
“Companies usually have stock for 15-20 days in their facilities, while distributors for a month. Today, companies have stock for just 2-5 days and distributors have for a maximum of 4-5 days. If we ask for 100 boxes of a product, the company will send us 10-20,” said Dhairyashil Patil, national president of AICPDF.
The reason, Patil says, is because in the initial days of the lockdown, FMCG companies were stuck with stock which was difficult to transport to the stores because trucks were stuck at state borders and drivers left the vehicles stranded. “Now, those stocks have come to distributors and gone to the market, so the pipeline has become dry. Most companies are working with 33% labour and they are operating at not more than 50% capacity,” Patil added.
The situation is especially worrying for noodles, for which there is no stock even for a day. While premium cookies is available, regular biscuits are not. One reason for the shortage also is that consumers are stocking up more than during normal times.
ITC said it has seen a surge in demand for essential food items including Aashirvaad atta, spices, salt, Sunfeast biscuits and Yipee noodles. “Such food products have been flying off the shelves. Our teams are working tirelessly to ensure that our diverse range of products reach the markets, despite supply chain challenges,” said Hemant Malik, divisional CEO of foods.
There are still lot of issues around inter-state passes, which is increasing the time the products take to reach distributors.
“Demand for all sorts of food has more than doubled in the last few months because that is the only expense bucket for a family right now. On the other hand, companies have not been able to cope with this as no one is operating at full capacity,” said Krishnarao Buddha, senior category head of marketing at Parle Products.
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