A conversation with the marketer reveals consumer sentiments are changing, and that there are holes in the supply chain.
After spending nearly a decade as a marketer in the hair care category, Gurpreet Amrit decided he needed a change of scenery. He says aims that it was becoming monotonous, and expressed a desire to move out of his comfort zone and do something different. His early marketing career included stints at Dabur, Wrigley India, Reliance Entertainment and Bajaj Consumer Care. Amrit also worked at Emami, before joining Mrs. Bector’s Food Specialities as chief marketing officer. The company was founded in India in 1978 and sells a range of products including biscuits, bread, and ice cream under the brand name Cremica. It has a strong presence in North India. All Cremica products are classified as 'essentials' in these times of a nationwide lockdown. So, how is the marketer handling the ongoing crisis? Here are edited excerpts from a conversation with him:
Both biscuits and bread are essential commodities in these times of lockdown. How is the company keeping up with the supply of these products now?
For the first few days after the lockdown was announced, it was very difficult, because it was sudden. If we’d had the opportunity to plan, we could have done something. Being an essential service, we took a few days to get curfew passes, and figure out how to navigate the various rules and regulations. It’s not just our employees and suppliers, we’ve also made sure that our distributors have access to curfew passes, so that we can keep the supply chain working smoothly. Right now, there’s a tremendous amount of labour shortage and things are not operating at full capacity, so we’re doing what we can to ensure that supplies are not affected.
How will you deal with the extension of the lockdown?
It will be a challenge, and we may have issues with the availability of a lot of raw materials. I’m sure the government is also thinking on these lines, and trying to figure out. Ultimately, food is one of the most basic needs a human being can have. If we can’t ensure that the supply of food is in place, then we can’t guarantee the success of the lockdown in the first place.
How has consumer behaviour changed after the lockdown was announced?
Due to the lockdown, larger packs are now doing well (in terms of purchase). Earlier, the point of purchase used to be the point of consumption as well (for example, when people buy a Rs 5 biscuit pack and consume it straightaway). Now, because of at-home consumption and the phenomenon of stocking up, people are preferring 200 or 500 gram packs.
There may also be a lot of consumers who may not consume this category regularly, but are stocking up in case of emergencies induced by the lockdown. This means that the category penetration is going to increase, as will as segment-wise penetration within the category. For example, if you consume glucose and don't have access to powdered glucose at this point of time, then you might buy digestive biscuits. This may induce trial, potentially changing a consumer's taste preferences.
How much traction are you seeing from e-commerce based delivery platforms (like Grofers and BigBasket) vs kirana stores and supermarkets?
Overall, the distribution has collapsed because of the lockdown. At first, the rules were not clear, so the supply chain of e-commerce platforms also took a hit and many are not yet fully operational. They are also facing a labour crunch right now. Modern trade, luckily, has gone up and continues to operate well, despite the circumstances. What’s happened with traditional trade is that where a chain has 10 outlets, there are only 2 or 3 operational ones. What we’re seeing is a change in the shape of the business itself.
Earlier, if a consumer didn't prefer a Cremica product, he’s more likely to have picked it up if a Parle or a Britannia product was unavailable in stores. Right now, grocery shops are also operating at different timings.
Right now, the consumer sentiment is at an all-time low. Does that affect you?
Being a food company, it will affect us to a lesser degree, but overall, the consumer sentiment is going to change because spends will go down. The salaried class may not feel the hit so soon, but daily wage labourers – their income will suffer. As a result of which, a lot of the basic products will be affected. Each and every segment will definitely get affected.
We are also suppliers to QSR outlets. We’ve been a supplier to McDonald’s for the last 25 years, and our QSR business is completely at zero right now.
Do you think the QSR business will pick up once the lockdown lifts and people get out in the open again?
People’s habits will start changing, now that the lockdown has been extended till the end of April. We’re in completely unchartered territory right now. It could be that people are sick of cooking and eating at home, and might want to eat food from outside after the lockdown ends – that can cause the pendulum to swing the other way. It’s a once in a lifetime opportunity in terms of what is happening – it’s a rare crisis. As a country, as a human race, we were not prepared for this crisis. We’ve seen wars in India, but we’ve not seen such a severe situation before.
Last, how do you deal with maintaining productivity in these trying times?
When you're working from home, distractions are inevitable. Everybody has families, and you are all confined to the same space. I don’t think the productivity can be the same as opposed to spending eight hours working in an office space, so I’ve reduced those expectations.
The other aspect is that the business is not operating at the same level. This means that productivity requirements are also not at similar levels, right? Most of our marketing and advertising activities are on hold right now, so realistically, there’s nothing much we can do about that, in terms of implementation and execution.
Since most people might have more time on their hands, I’ve been pushing them to read more books and discuss what they’ve read on these calls. We’re also planning to do a ‘book club’ type meeting with the team where we jointly review learnings from a book – the first one we’ll be discussing is a book titled ‘The Power of Habit’. As long as we have technology, distance is the least of our worries.