Rise in demand and production of packed food during the festive season

Updated: Nov 10, 2020 1:10 PM

As more people were working from home, the definition of basic necessity changed from basic foods to snacking and munching items.

Popular items like candies, jam, jelly and ice cream might see a rise in prices complemented by a rise in demand. (Photo source: IE)

By Raghav Gupta

Covid-19 led to a considerable shift in the buying patterns of consumers ranging from basic necessities to high-value items like processed food, snacks, packed food items, processed meat and frozen desserts. There was a significant spike in the demand for packaged food products like biscuits and instant noodles, resulting in an increase in the average purchase value per customer. As more people were working from home, the definition of basic necessity changed from basic foods to snacking and munching items. And this trend is likely to continue in the festive season as well.

Another reason for the rise in demand of packed food has been ensuring safety and hygiene in the times of coronavirus. The festive season is going to witness more vigilance among people when it came to the food they ate – be it snacks, packaged food, or sweet and savoury items. Flexible packaging is also set to increase in importance especially because of the hazards attached to non-packaged products, which in turn, would result in higher production and sales volume.

Although large players in the packaged food industry have been able to smooth down their supply chain issues, the SMEs are still treading the path carefully. The large players have been able to gain shelf-space and market share amid the lockdown, yet the SMEs are not far behind. And the festive season will have a greater number of people buying packaged items to ensure safety for themselves as well as their loved ones. As a result, the overall industry is expected to grow by 10 per cent during the season.

Among its various segments, popular snacky items like biscuits, savoury items, instant noodles and ready-to-eat products will log a fast-paced growth as compared to traditional snacks, chips and cakes. Chocolates and bread should grow decently in line with the industry.

What the Festive Season Holds in Store

Festive season is the time when brands look to ramp up their sales and make up for any losses or sluggishness in the first half of the year. However, the year 2020 has been starkly different and presents a unique set of challenges due to the ongoing pandemic and lockdown conditions induced by it. Although the first half of the year was a washout economically, the second half, which would be the season of festivities in the country, is also expected to be lukewarm. Festivals this year are going to be more of a homely affair as due to the norms of social distancing, people would not be stepping out much. Instead of being socio-religious like every year, festivals this year are just going to be religious.

The coronavirus pandemic has made the consumer more mindful of food safety because of which, while buying sweets and festive cookies, more people are going to opt for packed sweets and cookies rather than buying them loose from the market. The industry players are foreseeing this as opportunities and hence, many of them will focus on their sweets portfolio this year and plan on continuing their endeavours to expand and grow their product baskets and geographies both.

Many food industry executives also predict that the prices of confectionary items will shoot up in the run-up to the festival season driven majorly by higher sugar prices. Popular items like candies, jam, jelly and ice cream might see a rise in prices complemented by a rise in demand.

Summing It Up

As the world moves ahead and adapts to the new normal that the pandemic has brought along with it, people have become way more conscious, even borderline paranoid about food safety and hygiene. Hence, the demand for packaged food is only going to rise and industry players will have to tweak themselves to meet those demands.

(The author is Director, Kanchan Metals. Views expressed are personal.)

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