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Impulse food supply runs dry on lack of clarity over government rules


Impulse foods such as instant noodles, soft drinks, frozen snacks, cream biscuits and salty snacks have gone off the shelves in many states with intermittent supplies by companies and lack of clarity over government notifications. Demand for such items have shot up as the second week of the nationwide lockdown gets underway, with people working from home and children being kept indoors.

“On the field and on ground, the multiple advisories issued by government authorities are being interpreted in many markets as being limited only to essential food products,” said a letter that The India Beverage Association has sent to all state chief secretaries, signed by Arvind Varma, secretary general of the industry body.

The association represents companies such as Coca-Cola, PepsiCo, Bisleri and Red Bull.

Focus on Basic Products
The government only allowed transportation of essential products initially. It subsequently allowed non-essentials as well but that doesn’t seem to have percolated through to the ground level. Matters have been worsened by a shortage of workers, with thousands having been forced to trek home as they faced a loss of livelihood during the lockdown. Others are staying away as travelling to work has become impossible.

The letter has sought amendments in advisories to cover all manufacturing, warehousing, transportation, distribution and sales channels servicing all foods and beverages. Most foods come with a shelf life and stopping them from being distributed and sold will lead to wastage, it said.

While different ministries have issued various guidelines to allow transportation of foods in general, these don’t mention specific categories. Hence, district-level authorities have only been allowing movement of essentials such as rice, edible oil, sugar, salt and pulses. That’s despite fresh guidelines having been issued by the food processing ministry and the Food Safety and Standards Authority of India (FSSAI).

Supermarket chain More Retail deputy managing director Mohit Kampani said the stock situation for impulse food products is dire with no supplies except nonpremium biscuits.

“Confectionery, instant noodles and soft drinks are almost sold out and we have very little stock of packaged snacks,” said Kampani. “The demand is huge for these categories since these are stay-at-home consumption, which is high right now.”

Impulse food supply runs dry on lack of clarity over government rules

Company officials said the reduction in production, shortage of labour and confusion over government notifications have all led to impulse foods running out. Some companies such as PepsiCo and Nestle have restarted manufacturing lines on a very limited basis in some plants, while others like ITC and Parle Products have restricted themselves to manufacturing non-premium products for the time being.

Parle Products, India’s largest biscuit manufacturer by volume, is focusing more on producing basic products such as glucose and salt biscuits along with their variants, said category head Mayank Shah.

“We are running a very small operation for premium products like centre-filled cookies and cream biscuits since consumers want to store the basic products by buying them in large quantities,” he said. “It’s also a kind of a tradeoff at a time when labour has become skeletal and it’s possible to manufacture more basic products instead of premium ones in the same time given the constraints.”

Shah added that premium products also require some merchandising activity at the retail store, which is not possible now, hence the focus on basics, which consumers buy from force of habit.

ITC, which makes Sunfeast biscuits and pasta and Bingo chips, has curtailed the production of premium foods and even personal care products to make the maximum of the worker pool. A company spokesperson said it was critical to ensure adequate availability of essential foods and hygiene products.

“The focus is on essentials and while we are well stocked for now, we are working with essentials brand manufacturers, so the supply chain for next few weeks is in place,” Spencer’s Retail and Nature’s Basket chief executive Devendra Chawla said.

This could mean smaller batch sizes or relaxing some manufacturing efficiencies for a while besides managing logistics to navigate through the next few weeks smoothly, Chawla said.

On the other hand, supplies of vegetables, grains, pulses and sugar remain steady, though mandis have been restricting crowds by limiting the number of trucks.

Source:-Economic Times