Home > Finance > Hygiene check: Companies cut sanitiser, mask output

Hygiene check: Companies cut sanitiser, mask output

54 Views

New Delhi: Large companies have either halted or reduced their output of sanitisers, disinfectants and masks as demand has fallen in line with Covid numbers and the vaccine rollout. These categories had surged in the March-September period as the pandemic took hold.

“Recent months have seen a drop in demand for hand sanitisers, and even related categories around sanitisers have not moved well in the last quarter,” said

chief executive Mohit Malhotra. Dabur is considering exiting sanitisers and some hygiene-related products it had launched in the middle of last year, adding that some of these had been “tactical and would be rationalised” with time, Malhotra said on an earnings call.

ITC, which has seen its consumer goods business surge in the December quarter, said in a quarterly earnings presentation that branded sanitisers have seen a sharp dip in sales growth.

“We will retain flexibility in the supply chain to match demand trends — there might be some formats which may do better than the others,” said Sameer Satpathy, ITC chief executive, personal care products.

Online retailers said sales of sanitisers and masks have dropped by almost 50%. “We have seen about 48% decline in the sale of hand sanitisers and masks from the post-lockdown period,” a Grofers spokesperson said.

ETD-1-17022021

Losing Momentum

However, there hasn’t been a significant drop in the sale of disinfectant sprays, the person said.

Retail chains also said demand for sanitisers has dipped sharply.

“Consumer offtake of sanitisers has come down significantly from the peak days of the pandemic though it’s more than pre-pandemic given the low base of the category. Some brands are now pushing promotions to create long-term consumption by incentivising consumers,” said Devendra Chawla, managing director at Spencer’s Retail and Nature’s Basket, which runs 200 retail stores across India.

From a category that was estimated at Rs 100 crore in sales in February last year, the sanitisers market skyrocketed to Rs 1,000 crore within eight months. The first four months of FY21 saw about 350 new launches of sanitisers and hygiene products, in basic and diverse formats such as sprays, anti-bacterial wipes, fruits and vegetable washes, and fabric disinfectants. Of these, 152 were from manufacturers that entered the hand sanitiser category in March last year, according to data by Nielsen.

Even liquor, packaged foods, paint and sugar companies such as Diageo, Parle Products, Asian Paints and Dalmia Sugar had entered the space. But company executives said the sanitisers category had become commoditised over the past three months and momentum has faltered.

Marico is “defocussing” on hygiene products launched in the middle of last year, including sanitisers, vegetable cleaners and surface disinfectants and withdrawing investments in these categories.

“Our focus remains on immunity building products,” Marico managing director Saugata Gupta said. “We are defocussing on some hygiene products and disinfectant washes, with falling demand of these categories.”

While overall health and hygiene is a long-term trend, companies that have now identified sanitisers as a non-core business are exiting the space, analysts said.

“Demand for sanitisers, the hero product of much of last year, has plunged; reasons include shift to soaps and handwashes, overstocking by consumers and panic easing off,”

Securities wrote in a report last fortnight. “We expect most new entrants to eventually exit the segment, and consolidate in favour of Reckitt Benckiser and HUL which have stronger and sustained brand equity in this space.”

Outdoor apparel company Wildcraft, which had invested in excess capacity for manufacturing premium masks and PPE kits, has significantly reduced production, with demand for masks and hygiene kits declining quarter on quarter, cofounder Gaurav Dublish said.

“The branded penetration of sanitisers is declining. With excess supply and limited margins, the segment is becoming less focused,” analysts at CLSA wrote in a report last month.

India has seen a steady fall in daily average Covid cases, with new active ones falling below 10,000 for the fourth time this month, the health ministry said in an update on Tuesday, adding that the national recovery rate has reached 97.32%.

However, health experts said masks and hygiene products should continue to be used. “People have almost stopped wearing masks and that’s why the cases are rising again. Don’t let your guard slip —double mask,” Joyeeta Basu, cofounder of multi-speciality chain Doctors Hub, tweeted on Monday.

Source link

TAGS , , , , , ,
Hi guys, this is Kimmy, I started LicensetoBlog to help you with the latest updated news about the world with daily updates from all leading news sources. Beside, I love to write about several niches like health, business, finance, travel, automation, parenting and about other useful topics to keep you find the the original information on any particular topic. Hope you will find LicensetoBlog helpful in various ways. Keep blogging and help us grow as a community for internet lovers.