Seeing, sampling, and smelling rice, wheat or sugar before buying was common in India’s hinterland. The Covid-19 pandemic is altering this purchasing behaviour.
Consumers in tier-2 and 3 cities and rural areas are now afraid to stand in queues at the grocery store during the pandemic, Anshu Mallick, deputy chief executive of Adani Wilmar Ltd., told BloombergQuint over the phone. Even retailers don’t want them to wait for too long and, instead, pre-pack loose staples, he said.
Consumption of packaged staples grew 11 times faster in rural areas compared to metropolitan regions in the quarter ended September, according to Nielsen Retail Intelligence. The pace at which consumers are moving to packaged staples nearly doubled after Covid-19 in smaller towns and rural India, it said.
Rural India recovered from the economic disruption of the pandemic and one of the world’s strictest lockdowns earlier. That’s because when the nation imposed curbs on all forms of movement, agriculture—a mainstay in rural India—was classified as an essential service.
Rural India is recovering faster than urban centres, Nadir Burjorji Godrej, non-executive chairman at Godrej Agrovet Ltd., said during an earnings call in November. The recovery, he said, has been supported by a good monsoon, leading to a fairly good kharif crop and high reservoir water levels and remunerative crop prices.
Consumers no longer take foodgrains like wheat to flour mills, according to Mallick. The mills have also started packing flour, reducing the number of customer visits.
Adani Wilmar, which sells packaged oils, sugar, wheat flour and rice, witnessed a 20-22% rise in consumers migrating to packaged wheat flour, compared to 10-15% before the pandemic, Mallick said.
Rice hasn’t seen much of a shift as consumers still prefer to smell it before buying it, he said. The number of buyers shifting to branded rice is growing 6-8% compared with 4-5% prior to the pandemic. For sugar, the pace has surged threefold from 5% to 15%.
“We have all types of stock-keeping units. During Covid we focused on smaller packs,” Mallick said. The affordable packs, he said, are more popular in the eastern region of India, Uttar Pradesh and Bihar.
ITC Ltd., one of India’s largest consumer goods maker, said in its second-quarter earnings presentation that its staples portfolio witnessed “robust growth” in the second quarter. Queries emailed to ITC remained unanswered.
Amul, India’s largest dairy maker, saw demand for its ghee in affordable packs rise 20% during the pandemic, RS Sodhi, managing director, told BloombergQuint. Adoption of packaged milk increased 14-15%, with Rs 5-10 and Rs 15-20 being popular price points.
