The FMCG Sector in the Covid-19 Era – A Challenge of Conversion of Crisis to Opportunistic Gains
The emergence of the novel Coronavirus (COVID-19) on the world scene, no doubt, has been a destabilizing factor to the world in ramifications never envisaged by the business community or indeed, humanity in its entirety. No matter what gains there might appear to be for some industries in terms of the spike in the demand for their goods and services, the real truth is that one form or the other of the dividends of the tragedy called COVID-19 comes back haunting players in such industries in many ways than the seeming gains of increased demand and sales.
As the world continues to grapple with the COVID-19 pandemic, one unintended consequence of this high impact event is the alteration in consumer purchasing behaviour. Driven, no doubt, by survival instinct and a pervasive fear of running out of essential items required to see them through a challenging time of unpredictable duration, consumers have sporadically changed their shopping behaviour of ‘consistent periodic shopping’ to ‘stockpiling style shopping’ consumables in an unprecedented pattern. This observed change in consumer behaviour has played out since the COVID-19 outbreak in China and its attendant severe disruption of global supply chains. This situation was further aggravated by stringent measures, such as lockdowns, put in place by various governments of the world to control the spread of the virus. Whilst countries of the African continent have so far reported fewer cases than most of those of Asia, America, and Europe, they are not immune to its disruptive energy and consequential negative dividends, from an economic perspective, at the very least.
THE SEEMING GAINS OR POTENTIAL FOR GAINS FOR THE FMCG SECTOR
The challenge identified above has resulted in immediate pressure on FMCGs and their distributors as to how to cope with high levels of demand for the supply of basic foodstuff now being stockpiled by consumers. Beyond basic foodstuff, we have witnessed huge demands for essential non-food medical products such as sanitisers, medical face masks, toilet papers, amongst others.
According to Nielsen, an online market research platform, “Consumers around the world are actively stockpiling emergency supplies as concerns grow that the novel coronavirus (COVID-19) could become a worldwide pandemic. They’re also starting to think beyond emergency items, such as basic foodstuffs, including canned goods, flour, sugar, and bottled water. Concerns are having a ripple effect on non-food essentials as well. In the U.S., sales of supplements, fruit snacks and first aid kits, for example, are all on the rise”.