Fast-Moving Consumer Goods (FMCG) players witnessed a decline in sales of beverages in Q1 owing to consumers preferring carbonated drinks during the harsh summers.
“The ready-to-drink business was impacted by intense summer and our ready-to-drink business is primarily an out-of-home single-serve business. It is not a take-home business and that is why we saw the impact,” said Sunil D’Souza, Managing Director and CEO of Tata Consumer Products Ltd in an earnings call.
During the quarter, companies saw a dip in demand for ready-to-make beverages, juices, nutritional drinks and hot beverages.
“Coming to performance in Foods and Refreshment, the segment witnessed a stable performance with 1 per cent USG and flat UVG. The harsh summer season has affected sales of hot beverages such as tea and nutrition drinks in this quarter,” said Ritesh Tiwari, CFO and Executive Director of Hindustan Unilever Limited (HUL).
“J&N segment got impacted due to exceptionally harsh summers leading the consumer preference shifting to thirst-quenching products like carbonated drinks. Our drinks portfolio grew in double-digits during the quarter,” said Mohit Malhotra, Chief Executive Officer of Dabur India Limited.
E-commerce uptick
During the quarter, FMCG companies saw an uptick in e-commerce sales growth across product categories
Hindustan Unilever Limited saw growth in e-commerce, which was 3times its modern trade during the quarter.
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“Channels like e-commerce continue to grow strongly. Modern trade on the whole and in the quarter grew around the same levels, a little bit lower, but I think that’s more a blip. But generally, the fact is that it is growing much faster. And this then represents the big cities between e-commerce and modern trade. General trade, which is more the mass of the market, grew slower than the other,” said Rohit Jawa, Chief Executive Officer and Managing Director of Hindustan Unilever Limited (HUL).
Growth was also witnessed in quick commerce.
“We have seen overall e-commerce grow and within e-commerce, quick commerce grow quite significantly,” said Sunil D’Souza. He said that their e-commerce is growing 60 per cent and about 35 per cent of that is coming from quick commerce.