Consumers give food companies sweet Diwali surprise | Economic Times

New Delhi: Unexpected last week surge in festive gifting as pent up demand kicked in; companies said they had to rush to ramp up distribution while distributors faced stock-outs for certain fastest moving categories such as chocolates, biscuits and soft drinks gifting packs. “We ran out of stock of brands like Cadbury Celebrations and Ferrero Rocher chocolates during the week, and had to ask companies for replacements. Some replacements were done, but some have not been possible because production cycles are planned many weeks in advance. Given the pandemic situation, a lot of companies had planned for conservative production and it’s been an opportunity lost for some,” said Arvind Mediratta, managing director of the India unit of German wholesale retail chain Metro Cash & Carry. Executives said demand for chocolates, cookies and sweets gift packs surged at the expense of costlier dry fruits and gold coins as consumers downtraded and opted for lower priced gifting options.Last week, premium packaged salty snacks maker Cornitos got an unexpected call: a large IT company placed orders for over a thousand gift packs requesting the company to deliver these directly to consumers’ homes. Cornitos managing director Vikram Agarwal said: “This is just one example of the surge in demand we witnessed through the past few days. Our distributors have met their targets more than two or three times.” Agarwal said even if people chose not to meet amid the ongoing pandemic, they exchanged gifting packs either through online deliveries, by shopping at supermarkets or sending gift packs directly at people’s homes.The country’s biggest biscuits maker Parle Products senior category head Mayank Shah said: “The last three-four days in the run-up to Diwali were extremely good; we too were not too optimistic but took additional production over the last few days.” He said Diwali gave people a reason to spend after seven months and that they shopped according to their spending capacities, even if they bought more low-ticket products.Others like Haldiram’s and Bikano too reported similar surge in demand for gift packs of sweets and snacking packs, leading to stock-outs at retail stores and on e-commerce platforms.Trade executives said a lot of companies expected Diwali sales to be lukewarm and had taken conservative estimates and trimmed down production runs. With value sales of non-essential products in urban Indian tapering off over the past few months, companies had scaled down manufacturing cycles of gifting packs Diwali staples such as chocolates, dry fruits and gourmet foods, in anticipation of lower demand, and uncertainty from retailers about how the consumer cycle would pick up in the run up to Diwali. 79237918 However, the trend reversed in the past one week-10 days as the consumption momentum picked up. Indian consumers are experiencing a significant decrease in anxiety levels, and have increased in-store visits in the festive season, and are scouting for better deals and bargains, Deloitte said in a report late last week. The report said the overall anxiety index of Indian consumers has reduced by 17% compared to July. Deloitte India partner and consumer industry leader Porus Doctor said: “There is a decline in people’s concerns over the fear of losing jobs. This could be attributed to positive sentiment, reduced anxiety levels and prioritising non-discretionary expenditure.”