In an interview, Paras Budhiraja, Director of Paras Spices Private Limited, explains the impact of COVID on the FMCG market in India.
How do you see the impact of COVID on the FMCG market in India?
It would be incorrect to characterise the entire FMCG market as a single entity. However, major disruptions are clearly visible in the FMCG space. Categories where the consumption is led by health & nutrition, stay at home lifestyle, indoor games/sports, hygiene & sanitation are clearly witnessing an upturn. People spending more time at home is clearly a major demographic variable here. Established brands with higher trust factor and strong supply chain linkages will have a clear edge. Consumers are spending less time in retail stores. Start-up brands relying heavily on modern trade formats are likely to face more difficulties, however. The pace of technology adaption by consumers and retail stores have accelerated like never before, bringing in a likely long term shift in our shopping behaviour.
You being into essential category, did you see any negative impact?
Our business is segmented into B2B, food service and retail. Food service is down as hospitality, tourism and events are adversely affected. However, we see a clear improvement in our b2b and retail space.
Kindly shed light on your foothold? What would be your distribution strategy going forward?
We have a strong presence in India’s b2b space.We are working with majority of the big food brands in India like Nestlé, Pepsi and Domino’s, etc. With all the major food brands focusing more and more on food safety, sustainability and traceability, we pitch in as a strong ingredients partner as a one-stop solution for these specific needs.
From a retail perspective, the focus is on expanding the last mile presence to ensure a smoother supply chain at the lowest cost to serve. This is only possible with strategic distribution partners with strong regional presence and experience.
The role of distributors is also changing with emergence of e-commerce and Modern trade. With size of FMCG on e-commerce expected to touch $375 billion by 2030, we may see more and more FMCG brands having a dedicated e-commerce distribution network with more technological interventions and synergies.
What were the top 3 learnings that you acquired out of Covid 19 lockdown?
1. The contingency plans and crisis management planning is a must for every business, now more than ever before. We can never be over-prepared for this.
2. Every crisis brings with it opportunities. Your success depends on your preparedness and agility.
3. Work from home is doable even if you are working in pyjamas. What matters is the task in hand and not the physical presence. I’m sure a lot of companies will opt for work from an approach for a larger number of employees even when the lockdown situation is over.
At last, kindly highlight your growth plans?
In next 3-4 years, we are planning to double our sourcing and processing capabilities with deeper penetration in existing territories and better presence outside our strongholds.
Housing a complete spice processing facility, the company has always been proactive in adopting the latest technologies. While our capacity and product portfolio expansion is an ongoing activity, our road to expansion routes through two important pillars, enhanced R&D and enhanced sustainable sourcing processes.
With enhanced R&D, we are able to add more innovative and novel products that add value in the kitchens. Through Sustainable sourcing, we ensure digitally farm traceable ethical, unadulterated and transparent sourcing of spices throughout the value chain while complying to International Quality standards.