Packaged snacks, ice cream, beverages and chocolates sales return to pre-pandemic levels

Consumption of packaged snacks, ice cream, beverages, chocolates and confectionery have bounced back to pre-Covid levels, and has even grown in some categories, top companies said.
They attributed the complete recovery of these ‘out-of-home’ categories to more people travelling on roads either for work or leisure, early onset of summer, and a rise in social events with infection rates down in most places.

As per their estimates, packaged snacks sales returned to pre-Covid levels in January-February period, while ice-cream sales increased 30% year on year during the same period and beverages are up by 10-11%.

These categories had started to recover progressively from the December quarter with a complete recovery in this quarter, company executives said.

Functions like marriages have started and the summer is early this year in several parts of the country, boosting out-of-home consumption, said R S Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation, makers of the country’s largest dairy brand Amul.

Ice-cream sales have doubled till now this quarter over a year ago when the base was low due to lockdown in March 2020, he said. Even as compared to pre-Covid levels, ice-cream sales are up by 30%, Sodhi said.

Mondelez India managing director Deepak Iyer said sales of chocolates and cookies have sequentially gained momentum, with a strong upswing in out-of-home consumption due to increased outdoor mobility.

An internal survey by the makers of Cadbury Dairy Milk chocolates and Oreo cookies showed that two thirds of Indians snacked more during the pandemic and 77% said they look forward to snacking more than their meals, Iyer said.

A PepsiCo India spokesperson said consumers are looking for convenient options while on the go and at the same time continue to explore options for at-home consumption which has been leading both food and beverage categories recovery trend over the last few months. He said demand for products across PepsiCo's portfolio, which includes brands such as Lay’s, Pepsi, Tropicana and Quaker, has been robust.

Parle Products senior category head B Krishna Rao said more people are on road this quarter compared to the previous quarters since the lockdown started, there is a disproportionate increase in personal travel, and containment zones are far and few even in affected areas like Mumbai.

Companies said growth for out-of-home categories is more in smaller cities, towns and rural areas than in the metros since the Covid-19 infection rate is extremely low in these places. Also, with most companies continuing with work from home, a lot of employees working from remote areas are yet to migrate back to cities.

Parle’s Rao said packaged snacks sales in smaller towns and rural areas have grown 10-12% over pre-Covid levels, while they have recovered to last year’s levels in metros and cities.

German wholesaler Metro Cash and Carry India, which sells to kiranas and other B2B clients, said sales of tea and salted snacks have grown 28% and 27%, respectively, year on year on the back of strong home and out of home consumption. “The average order value has also gone up in these categories,” said Arvind Mediratta, managing director of Metro Cash and Carry India.

An ITC spokesperson said its snacks business regained double-digit revenue growth while confectionery saw appreciable sequential uptick.

Out-of-home consumption was worst affected since the lockdown, delaying the recovery of most of these categories, pulling down the pace of recovery of food business across FMCG companies.

As per data from research firm Kantar Worldpanel, beverage sales in October-December quarter grew by 9.2% over the same period in 2019. Bottled soft drinks which were quite heavily hit during the pandemic (-38% and -1% in Q2 and Q3 of 2020) have seen a 15% growth in Q4, uncharacteristic of the season, Kantar data showed.

Tea and coffee, the bigger beverage categories, held on to their growth rates, while industry executives said the trend continues this quarter too.