CoronaVirus outbreak in the country is going to leave a tremendous financial impact on several sectors, including sweets and snacks industry which is currently struggling under reduced demand and depleting labour force. An official said on June 15 that projected revenue loss for snacks industry due to COVID-19 could amount up to Rs 35,000 crore for FY 20-21.
Manufacturers have to reduce production capacity due to the labour crisis arising from slowdown and rising health concerns. This will lead to a shortfall in production and hamper industry’s turnover. Indore, being the hub of snacks and sweet manufacturing in India, is worst hit by the current condition.
“In view of the ill effects of COVID-19 on the market, we estimate that the total turnover of sweets and namkeen products in the country may drop to Rs 65,000 crore during the ongoing financial year,” – said Feroze H Naqvi, Director Federation of Sweets and Namkeen Manufacturers.
Snacks industry, which had seen a turnover of Rs 1,00,000 crore in FY2019, including Rs 60,000 crore from sweet, is likely to experience moderate demand and sales condition in the current financial year.
Indian snack sector, consisting of both organised and unorganised producers, depends on migrant labours coming from different regions of India. Thousands of these migrant labourers have travelled back to their natives since lockdown is announced which has to lead to a deficit of skilled labours in the sector.
“Thousands of migrant labourers working in sweet and namkeen factories returned to their villages due to the COVID-19 outbreak. This has also slowed down the pace in these factories,” mentioned Naqvi.
Now the industry has to look forward to the upcoming festive season when it is expecting demands to rise a notch. But a lot still depends on the COVID-19 situation in the coming months. It has seen a slight rise in demand since the government has announced some respite in lockdown condition.
Over 200,000 businesses are involved in the production of snacks and sweets in India, combining both organised and unorganised units. Most namkeen manufacturing units are small and medium scale businesses which is the worst-hit sector, feeling both financial and labour crunch. The industry also suspects demand trends to remain feeble due to reduced purchasing power of customers.
COVID-19 has impacted both business and employment conditions in India, which is likely to take some time to bounce back to pre-pandemic condition. Impact of Coronavirus on snacks industry isn’t a separate incident but namkeen manufacturers are trying hard to cater to the taste buds of Indian through new business model.
“However, after the lockdown is eased, many namkeen vendors started home-delivery of these snack products for customers through online booking. But the business is not the same as it used to be before the COVID-19 outbreak,” mentioned Anurag Bhotra, Secretary of Nameek Producer Association of Indore.