They say that gold is the only commodity whose value is burnished by grim news. That’s because in response to any generalised fears of socio-economic turmoil, people always prefer to have a claim on gold in a vault to one on cash in the bank. Which, of course, adds to the allure and appeal of gold and makes it ever more valuable as an alternative store of wealth. No wonder that the value of gold has been steadily ratcheting up to climb the rarefied stratospheric airs over the past few days as news of the Coronavirus-COVID-19 rampage turned more apocalyptic.
Along with gold, one more commodity to have succeeded in adding more lustre to its sheen since the virus contagion began rippling dangerously across the world, has been our everyday food staples. At a time when there are very few fundamental growth acceleration stories in any industry other than the fast-gaining-notice bankruptcy industry, the food sector has been the one to buck this downward slide and has in fact seen demand for many food categories shoot up in the wake of the COVID crisis.
“Sales of food items have increased by about 40 percent during the lockdown period. Product categories such as basic food and grocery items have seen a 40 percent spike, our own labels have seen a sales jump of 30 percent whereas organic foods and ready to-eat have seen an increase in sales to the tune of about 25 percent. This spike in sales has been fairly uniform across all our 10 stores in Delhi and Gurgaon. Also, the average ticket size has increased due to the additional quantities of food that families are purchasing mainly for two reasons: first to have adequate stocks at home and second to avoid frequent visits to the store during the time of lockdown. As such, average bill amount is now between Rs 2,000 and Rs. 2,400 across all our branches, up from Rs 1,400-Rs 1,600 in the pre-lockdown days,” says Kunaal Kumar, Owner, Modern Bazaar.
The trend in stoked up demand for food finds widespread resonance across geographic frontiers. Hyderabad-based supermarket chain Q-Mart has seen food items fly frenziedly off the shelves during the ongoing lockdown period compared with food sales in the pre-lockdown phase. “Ready to eat foods, ready to cook, frozen & chilled products have seen a doubling in sales at our Q-Mart stores. Fresh meats and seafood and fresh produce too have seen a more than doubling of sales since the lockdown began. Health foods and organics too have seen a substantial increase during the lockdown but due to erratic supply issues, product availability has been hit for these items,” says BVK Raju, Joint Managing Director of Q-Mart.
In putting a number to the increase in the average food basket size since the lockdown came into force from March 24, Raju says: “Yes, there has been an increase in the average basket size. The average ticket size has seen an increase by about 15-20 percent. Some part of this can be attributed to the closure of restaurants, eateries and people staying at home and preferring more home cooking. Secondly, the uncertainty due the lockdown is resulting in some panic buying and stocking up on food items.”
Buoyancy in food sales, even in the categories like health and organic foods that are widely perceived to be pricey and heavy on the wallet, have seen a surprising uptick at a time when the consumer mood is circumspect with people preoccupied with tightening their purse strings in an economic climate that is decidedly downbeat and down in the dumps. Brands like Just Organik, which supplies all kinds of organic pulses, cereals, millets, flours, edible oils, spices, sweeteners and also vegan, gluten-free ready meals, has seen the demand for its products zoom during the current lockdown period. “We have seen an almost threefold increase in the demand for our products in both online and offline marketplaces. There are many reasons for the increase in this demand. Some of these are short term but many are medium to long term. The biggest short-term reason is the limited availability of many other organic brands and delivery options. The long-term reasons that might drive the demand to an inflection point are: an increased concern and hence awareness towards the health benefits and attributes of organic produce such as no chemicals, greater antioxidants, better for immunity, etc.; organic products come from a verified source/origin and that has become the order of the day; a general increase in vegetarianism; a lot of cooking is happening at home and mostly without the aid of maids and domestic helps, which is causing the demand for organic ingredients to increase in general,” says Owner Pankaj Agarwal.
Just Organik products can be found at all prominent Modern Trade retailers such as Spencer’s, More, Food Hall, Modern Bazaar, among others and it has also a robust supply chain in place to serve the general trade. After tapping the offline market, the brand has taken the online route and is now available on e-commerce portals like Amazon.in, Flipkart, Justorganik.com in India and Amazon.com in the U.S. “The ongoing Covid scare has impelled consumers in the country to wake up to the importance of immunity and eating food with a verified supply chain, leading to a surge in the demand for organic and healthy food. Despite the limited availability of organic brands and products in this period, people are willing to try out new brands and products, which leads us to believe that health and organic foods and other immunity boosting products are here to stay. In terms of organic food as a category, we feel that this is the right time to focus on increasing the level of awareness among the masses in general, so as to be able to transform organic consumption into a regular habit and sustain the current surge in demand,” opines Agarwal.
Another organic brand Earthy Tales, which supplies organic food items directly to consumers across Delhi-NCR using WhatsApp as a communication tool has seen an almost a 25 percent increase in sales as well as a swelling of its customer base by 20 percent since the last week of March 2020. “Basic grocery items like staples have been brought in bulk by consumers. We have seen a huge rise in the demand for flour, sugar and pulses majorly. Also, the quantity or volume amount being purchased for these items have gone up by 20 percent in comparison to the pre-lockdown times,” says Gauri Bhatnagar, Co-Founder and Marketing Head, Earthy Tales, which works with 500 plus organic farmers across different agri-zones for sourcing its products.
Elaborating on her observations about elevated sale orders since the shutdown, Bhatnagar adds: “The average basket size too has gone up. Consumers who were earlier picking only staples are now picking up groceries as well and vice versa. The average basket increase can be pegged anywhere between 15-20 percent. We have noticed that consumers are looking for variety and the idea in looking for variety is to complete the entire range of requirements for their houses.”
Earthy Tales, launched in 2017, started by providing organic produce grown in its own farms at Pushkar to the houses of select customers comprising mainly of those within the family and friends’ orbit of its founders. “Soon we realized that the demand was high and consumers were looking for greater variety. We moved the focus towards finding farms that were pure organic set-ups and could provide a variety of products. But, in India, only 2 percent of the people are doing organic farming and so it was an up-hill task for us when it came to on-boarding organic farmers and setting up our sourcing lines,” avers Bhatnagar, adding that Earthy Tales has now grown its product footprint to 200+ organic products, including vegetables, fruits, flours, oils, spices, snacks, jams, preserves, and pickles. “We now have over 11+ types of flour, including multigrain and also gluten-free atta. Unpolished pulses are also hugely in demand apart from our sugar, which is chemical-free,” points out Bhatnagar.
The company is supplying organic food items to over 1800 families in Delhi-NCR across a swathe of locations – Gurgaon, south Delhi, Dwarka, among others – and it believes that the demand for organic food is growing rapidly not only across many more zones and pockets of Delhi-NCR but also in Tier II and III cities and in B/B+ towns, all of which have the promise of strong growth potential.
Sanjay Yadavrao, Founder Kokan Bhumi Pratisthan and Global Kokan, which seeks to promote natural and organic products from the Kokan region apart from other arts and cultural activities, affirms that the consumption organic and healthy foods during the lockdown period has seen an increase. “These categories have been doing well even before the lockdown. But the corona pandemic has brought many a thing full circle. People have started recognizing the need for natural, organic and chemical-free produce and they are now looking at these categories with renewed interest and an eager eye.”
According to Yadavrao, the coronavirus episode has, in a way, been a shot in the arm for the mango farmers of the Kokan region who usually have to go through the middlemen to be able to bring their product in the market. “This lockdown has enabled the farmers to reach out directly to customers either through Kokan Bhumi Pratisthan or social media. Mango growers from the Kokan belt of Rajapur, Vijayadurg, Pawas, Ganpatipule, Jakhadevi, Dapoli, Kelshi, Guhagar, and Shrivardhan have been able to bring their organic mango products directly to the customers and with the original taste intact – i.e, Alphanso mangoes that are naturally ripened and are completely chemical-free. This way, the short cuts and artificial methods of the ripening of mangoes have been eliminated.”
During this period of lockdown, Kokan Bhumi Pratisthan is organizing supplies to housing societies that have placed bulk orders with it. Later, once normalcy returns, it will start delivering to individuals as well and supply other goods from the Kokan region as well. “We are not involving other retailers as we will be bringing products directly from the farms to the consumers. Besides mangoes, Kokan Bhumi Pratisthan will be introducing different types of rice and rice products, ragi products, jackfruit, and other kinds of organic products from rural Kokan,” informs Yadavrao reiterating his organization’s mission of leading the way to create an organaized marketplace for the farmers to directly reach out to the consumers with their organic and other farm products.
Like other retailers and organic brands, Vakshi Organic – a retailer of organic products in Vaishali, Ghaziabad – too has seen a spurt in the sales of organics at its store during the lockdown. “Sales of ayurvedic herbs and juices have increased considerably. With the shadow of coronavirus lurking in the background, people want to enhance their immunity with more focus on ayurvedic herbs and juices,” says Owner Varun Singla, adding that his store has clocked sales of Rs. 4 lakh in just four days of operation.
Vakshi Organic sells about 900 different products of over 70 organic companies. The store deals in organic groceries, organic fruits and vegetables, desi cow milk and milk products, organic Ayurvedic herbs and herbal juices, pure clay, iron, copper vessels, organically produced cosmetics and personal care range and gluten-free products. “Although we are allowed to open the store daily but keeping in mind the safety of our staff and our partners, we have opened the store only once a week since the lockdown started. But we have continued to receive orders for the products on WhatsApp and we have been compiling all orders and delivering them on a single day per week. In just 4 days in 4 weeks until now, (opening 1 day per week), we have generated sales of Rs. 6 lakh, which is enough to meet all our monthly expenses apart from being able to provide essential supplies to our customers.”
So, while brands and retailers across the board agree that food sales including those of health and organic categories have revved up during the current lockdown, the question uppermost on the mind is whether this sales momentum will continue to drive into the future once the Covid hysteria recedes.
“We think that the Covid onslaught will prove to be a defining moment of our lifetime and will leave a few permanent changes in our lifestyle with food habits being one of those permanent changes. There will be an overall eventual realization that health is priceless and that immunity cannot be built overnight. This realization will drive a lot of consumers to move towards healthy / natural / organic food diet as part of the daily routine. People will start treating food and health as real investment for their family’s wellbeing. It may be a co-incidence but Sikkim – the only 100% organic State in India – is also the only State so far to be completely coronavirus free,” opines Bhatnagar of Earthy Tales, adding that the concerns around infections and their transmission will play on people’s buying behaviour, inducing them to prefer e-commerce and resulting in more people logging online to stock up on food and household products as well.
“The corona pandemic has brought man to his senses and there has been a significant change in our thinking process: We have become more conscious of staying away from junk or processed foods. This is going to emerge as a definitive new trend in the post-corona world and it will greatly benefit the farmers who will need to meet this demand by supplying directly to the end consumers,” believes Yadavrao of Kokan Bhumi Pratisthan. He sees the trend shifting to organic wholesome foods from junk and processed foods. “The one change I see catalyzing in the consumer purchasing behavior is the real possibility of people preferring to have their own personal vegetable or fruits supplier who sources direct from the farms without any interference from the middlemen and with the benefits going to the farmer directly. This will allow parents to get the freshest produce, reduce their children’s dependency on junk and processed foods, and get them interested in classic food recipes like aam panha, kokum sarbat, etc.”
Yadavrao’s sentiment about a shift in consumer behaviour towards organics is echoed by Agarwal of Just Organik. “From what we gather, there is a definite change in the food buying pattern with more number of consumers opting for raw ingredients or semi-cooked or ready-to-eat meals over ordering from a restaurant. This change is here to stay for sometime because in light of the corona contagion, people will like to prevent exposure to the external handling of their meals. Consumers will be more conscious in terms of verification of the sourcing to the nutritive benefits of various products, which organic certified produce can help to address. The choice towards the purchasing options is also changing with more demand getting generated from the general trade market and online/hyperlocal delivery options rather than from modern trade. Hence, we will see at least a medium-term change in the consumption habits of consumers, skewed in favour of organic even after the corona crisis recedes.”
As far as the long-term retention habits toward organic is concerned, Raju of Q-Mart believes that “in the long term, food purchasing may return to the normal once the scare of the virus settles down and social distancing norms ease. But in the short term, the adoption of organics will remain substantially higher when compared to the pre-corona days because eating out in restaurants, eateries, etc., will take time to recover. Home food will be the norm for a substantial period of time going forward, which will necessitate greater purchase of packaged food, including health and organic foods.”
According to Kumar of Modern Bazaar, “Consumers will increasingly move towards organic and health foods as health concerns will remain uppermost in their minds in the foreseeable future. We will see a marked move in consumer behaviour with shoppers clearly preferring to make their purchases from stores / shops that enjoy a perception of maintaining better hygiene, sanitisation and cleanliness. Over the past month, we have seen a shift towards orders being placed online, and we expect this trend to continue and increase rapidly going forward.”