When CPG Categories & Kiranas Moved Faster Than Ever

2021 had a bittersweet start. Thankfully, in the CPG world, it began with hope and a lot of momentum according to our monthly Kirana report.

In the last quarter of 2020, consumer goods moved faster than ever before. In December 2020, kirana sales grew in double digits MoM despite coming on the back of the Diwali month. The count of active kiranas was 11.8% higher than pre-lockdown levels of Jan-20 (though it is +7.3% MoM).

To everyone who thought that the influence of kiranas is diminishing due to the pandemic, think again. Overall, kiranas are stronger than ever and delivered their best month of 2020.

Day-wise open kiranas

In Dec-20, the count of daily active kiranas was ~7% higher than in Nov-20.

During the month, the count of active kiranas has been consistent, unlike Nov-20 where it was high pre-Diwali and tapered off after.

Note: Jan-20 purchase value is taken as 1

Kiranas’ order size for Dec-20 was up by 8.2% MoM on the back of stores stocking up for Diwali sales. This is now 62% higher than pre-lockdown levels of Jan-20 indicating that stores have now upped their average stocking limits significantly to ensure that customers have a lesser impact from supply challenges.

Cumulatively, the spike in Kirana count and increase in their stocking levels has helped increase overall sales in Dec-20 by 12.4% MoM (equated day basis).

To summarise, 2020 brought many wonderful changes, among them:

India discovered its sweet tooth during the pandemic times. It was the only category that consistently grew past its pre-COVID levels, even during the peak of the lockdown. Chocolates & confectionery provided comfort in the absence of human connection.

Commodity products (Staples) have undoubtedly been the growth generators in the last quarter of this year. Despite the emphasis on healthful foods, consumers made traditional savories and sweets during the festive season.

Homecare products saw a flurry of new product launches with many companies capitalizing on the new demand trend for health & hygiene at home. It was also the most widely distributed category of all.

Personal Care, which is so very dependent on out-of-home consumption, has bounced back to pre-COVID levels despite the limited movement of people. 2021 promises to be a fantastic year as things get closer to normalcy.

Many consumer businesses built Direct to Retailer channels to avoid any future supply disruptions. Today, many of these businesses drive over 20% of sales through this channel.

Suburban & Rural India has helped consumer businesses with a lion’s share of growth and is finally getting the attention it deserves from consumer companies. Brands are relying on technology to drive outlet expansion across the country.

There are many more Kiranas than before and they’ve increased their average stocking levels to ensure the continuous supply of customers’ favorite products.