Retail sales of edible oil saw a sharp drop in November compared with October but increased out-of-home consumption is expected to keep its demand in good stead.
With consumers stocking up larger quantities in the buildup to the festival season in October, and perhaps utilising those now, there was a drop in demand for edible oil in November.
Additionally, there has also been an increase in sales of lower-priced or mass brands during the festival season.
With edible oil forming a major portion of commodities, the segment sales declined 23.7% month-on-month in November, according to data sourced from consumer data intelligence firm Bizom.
“We are seeing consumers lowering spending on premium edible oil brands in favour of lower priced brands and this trend is being observed across the category,” said Akshay D’Souza, chief of growth and insights at Bizom.
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“November saw lower sales principally because October had three big festivals—Dusshehra, Diwali and Chatth Pooja, which led to demand throughout the month. And normally people pick up five-litre cans instead of one-litre pouch around festivals. So yes, stocking at homes is surely higher, therefore, sales at retail stores were lower in November,” Adani Wilmar MD and CEO Angshu Mallick told FE.
However, with the wedding season kicking off from November 15, Mallick said the out-of-home consumption has picked up sharply, with demand for bulk packs and 15-litre tins on the rise from caterers, hotels and banquet halls.
“With more than 30 lakh weddings scheduled to take place in India over the next four to five months, and edible oil being a principal item consumed for food, the consumption is good and steady. November saw a high double-digit growth compared with last year, although the base was lower in 2021 because there were not too many big weddings due to restrictions on the number of people attending. This year, we are back to earlier scale,” he said.
Sudhakar Desai, CEO, Emami Agrotech, said that the demand in India and other destinations has been good.
Taking advantage of the drop in prices, consumption and also the distribution channel, stock has increased in the last one month, “especially after stock controls have been removed for wholesale dealers, distributors and institutional segment”, he said.
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Company officials do not see prices as a hindrance to demand because they say prices are at comfortable levels due to the availability of palm oil from in Indonesia.
“Prices have corrected about 15-20% in the last quarter, and corrected further towards the end of November. At these prices consumers and markets are comfortable, and we are seeing higher demand as a result of that,” said Mallick.