May 5, 2020 | 08 min read
We’re living through a time when supply chains all over the world are broken and governments everywhere are doing their best to ensure uninterrupted flow of essentials and goods. The real heroes remain our kirana stores who stay open and ensure supply of essential goods to customers.
While the lockdown has slowed down consumer goods sales globally, Indian FMCG and CPG brands have yet again showed us how to come out of the prevalent supply chain challenges and increase their reach and availability. What’s common across these brands? They understand the importance of channelling their distribution efforts where it matters the most and they take quick decisions.
As we dive deeper into a discussion with three well-respected thought leaders in the Industry, we try to address the following questions over a virtual discussion moderated by Lalit, CEO – Bizom.
“How are retailers able to stock up their shelves? What are they ordering? Who are the unsung heroes keeping the supply chains alive? What are they doing differently to ensure orders and fulfilment?”
Hear it from:
Karthikay Mehta, Vice President Sales, UNIBIC Foods
Denver Raja, Director BD, O’cean Beverages
Pradeep Hada, Director, Praash Marketing
Lalit Bhise: Thank you so much, Akshay, hello, everyone. I’m really interested in glad to see you all here. We have an audience of about 300 are people who are registered with, including all industry leaders between large enterprises like Unilever, Rickett I have Jyoti Laboratories, Parle Agro, Bridgestone, Tata, Mahindra.
So, it looks like in the tough times like today, pretty much every one of us is looking at answers for how to keep the supply chains open to reach out to a lot of specific consumers.
I think our panel today might be able to just answer some of those questions. These are the guys who are literally bringing food and beverages to our homes in these tough times. To a mom and pop retail channels. So, first of all, thank you to all of you guys for literally bringing beverages to our homes. The second interesting thing about our panel today, before I go into more details is that all of them represent innovation, Indian innovation. Indian entrepreneurship. All three of them represent Indian brands. Pradeep here represents Praash Marketing or BL Agro, selling commodities under brands like Nourish as well as Bail Kohlu.
Denver here is a beverage veteran. He represents Ocean Beverages. Ocean Beverages also sell beverages under Virat Kohli’s One8 brand. And then we have Kartikay here. Kartikay represents Unibic. Unibic is a category-defining product. They literally brought cookies as a category to India and growing phenomenally, continuously.
All three of them bring phenomenal insights. When I talk about Indian entrepreneurship, the other part of Indian entrepreneurship is actually the mom and pop retailer. The friendly neighborhood Kirana shop. Those other guys were shown extreme innovation to keep their shops open and running even during these tough times. Most of the things all three of them rely on technology to essentially make sure their supply chains remain open.
We as consumers get served in spite of the pandemic situation as well as a lockdown kind of situation. We call this method internally as Algorithmic Jugaad. So essentially jugaad is an innovation is done at periphery. Or rather frugal innovation done at periphery. Mangalyan is a great example of Algorithmic Jugaad for example. Algorithms are the way to bring some sort of a structure for scale into those Jugaads. The technologies, the digital, all of that allow these brands to put that structure into those innovations to scale them. So let’s hear from them.
I will ask each of them questions and then about the format as we’re discussing, pre-Covid or pre-lockdown situations. Then during lockdown situations and post-lockdown situations. And I think all three of them have very, very interesting insights to share with us. So, panel if I may start with you guys, I will start with KM on a pre-lockdown, kind of a scenario.
So KM in your category, you know, we did not see why we see a lot of surge or rather what we call as panic buying in the week when Janata curfew was announced. Which was the pre-lockdown week. Somewhere around 20th of March, we had Janata Curfew announced by our PM and in that week we saw a lot of panic buying across categories. But in your category, we did not see that much of panic buying. Do you know, why and what you actually did as a brand to anticipate a lockdown and other stuff, even before COVID. That you were able to leverage or even operate during the lockdown?
Kartikay Mehta (KM): OK, so good afternoon, everyone, and thank you very much Lalit, for hosting us here. And thank you very much for 194 right now live people listening out. So basically, biscuits come in between need and want. So, any such situation, where you have you know, the fear or fear of tomorrow normally needs are first collected.
Some needs come staples. So, I’m sure Pradeep would have seen a big sort of buying, you know, staples are the one which will actually get first base. And then it comes when it comes into want, we are in between need and want. So, when it comes on you know, on something like biscuit as a category, the large packs are the first consumed. Large and value-for-money packs.
So if you see today probably Parle G would not have much stock across India because that’s something which will be bought first.
OK. We come after that because we go slightly into you know the want category. However, we realize that what is going to happen during this time is there’s going to be a massive buying for the value packs. And we will definitely get our chance. So we were waiting for it. OK. Whatever stock was there with our distributors across. We ask them whichever is the nearest possible outlet where they can service it or they can take a phone call order, they should service it. And that gave us the immediate jump. You know, after the first week, we were able to manage it. Still, the supply chain is an issue. But overall, that first week was basically to understand the new normal. So this is a new normal. Probably it’s going to be there for some more time.
So the first week we invested our time to understand what is the new normal and how we should react.
The new normal for us is working on 15, 20 percent kind of efficiencies. But thanks to panic buying, we have stakes and share in these 15-20 days’ time.
Lalit: Very interesting, very very interesting.
So I’ll come to you Den. Denver, in your business, similar to pre-lockdown actually, especially for O’cean, we saw a definite panic buy pattern. Your sales went up fairly strongly before or in the week of Janta Curfew before Lockdown started. How do you explain that consumer behaviour and another question is what did you do in terms of company to prepare for lockdown and situation beyond?
Denver Raja: Hi. Good afternoon, everyone, and thanks Lalit. So, yeah, so we did see in terms of beverages prior to the lockdown happening, we did see a lot of sale from trade sale which is secondary sale from a lot of our stores. I think the reason for that as well is, is not that we’re a needed product. It was more that we were a wanted product and we were available at the right touchpoints at that point of time. So, I think being available at the right touchpoint was very important.
So that essentially happened that at that point of time. And then, of course, that however, once the Janata Curfew set in, it was not a pleasant picture. I’m sure your data also indicates the same Lalit. Obviously, we were struggling for numbers and consumers. And obviously, it’s like what KM as well said. You know, people first looking essentially were looking at the essential items, picking up the needed products and said, okay, look, this is what we need. So to explain we were available. But then after that, in that first couple of weeks, you know, I mean, we had enough stock and we had our teams out there. But obviously we took a conscious call as well to pull our sales teams as well from the market. Safety was paramount. And we obviously put in place the right I.T. infrastructure to get ready for once things opened up.
But it was it was a jolt to the system, obviously, because as a category, we’re not priority one in terms of what consumers want. Right. In terms of beverages, it was more just plain water. And that was it.
Lalit: OK. Interestingly, March was also a month when there were a lot of festivities, I think Holi. And then there was on this Baisaki and other festivities, right. So Pradeep in your category, I’m sure you definitely saw panic buying behavior. I mean your sales would have gone up like a hundred percent or maybe even more than that. So how did you cater to that? Did you anticipate as a company that there is going to be a panic buying in March due to festivities and that allowed you to stock better? Or what exactly did you do to prepare for that kind of behavior?
Pradeep Hada: Hi everyone. Thank you, Lalit.
See, actually, for us, every time we have seen the pre-Holi rush is what becomes a little critical. For us, the primary product which we have is the mustard oil and let me look at mustard oil. Most of these sales did happen pre-Holi but after that, there was a slight dip. The dip is also because of the season in which you have. I mean, this is a time the crop is supposed to come. You’re almost at the fag end of the stock of the mustard seeds. The mustard rates are always a higher. It’s a very sensitive, price-sensitive quantity.
Most of these dip in sales was there initially early in March. Obviously, there was a tremendous amount of panic buying. But this panic buying does not make these sales boost drastically because you are not able to complete it. You’re not getting the raw material. You are out of packaging material. Almost everything is out. You were anyways not planning to stock on quite a bit of RM/PM also because you have a March closure. You are very conservative in the thought process of having the right stocks finished with good closure and everything has to be done perfectly well.
We did see a major surge in panic buying. Obviously, everything on the shelf, store, warehouse was emptied. All distributors were sitting empty. Everything was sold out. But from our perspective, obviously, you can only sell something which is already manufactured right? Which is just at the initial stage of the pre-lockdown. And that is why it didn’t move on. I mean, for us, we were trying to cater as much as we could for people, but it was quite a chaotic situation for us. Things were selling out. Everything was getting out of stock, left, and left out. You were like everybody wants orders. There are orders everywhere. It was a mess.
It was extremely challenging. We were I mean, it was a drastic result. It was terrible for us to manage that. However, thanks to the technology which we have invested in the last couple of years before this, that has given us an immense advantage. During these last couple of weeks, as well as the pre-lockdown rush hour. We had set up the entire automated warehousing system way back in 2016, absolutely indispensable. That help does a lot. That technology helped us a lot because you are not having a labor and that was difficult. But the entire use of technology helped us a lot. The manufacturing process. I mean, the entire line of manufacturing for us just requires 3 to 4 people for say 800 bottles per minute kind of productivity. That helped us a lot. Whatever we did in terms of the manufacturing excellence which we had invested in that started to pay off right at that time when things were not going well.
Lalit: Technology pays especially in bad times. That’s an interesting thought. That let me take that thought a little bit further with you Den. So then during Lockdown, obviously beverages in the initial part were hit the most. But O’cean beverages as a brand has been extremely, extremely progressive. Especially as far as technology, investing in technology, using the latest of the technology is concerned. Have seen that firsthand.
So you were the first ones to do stuff like direct to consumer or even retailer applications and stuff like that. So how was the Lockdown period for you after first couple of weeks? How if anything has technology helped for you? I know that O’cean uses auto replenishment. I think for years now. I mean, where other brands have been thinking about it, your brand has been using auto replenishment. How does it work for you? Did the technology help at all during this whole pandemic situation as Pradeep mentioned? Or wasn’t it relevant for you?
Denver: I’ll take a few minutes to set things in terms of context. Yeah. So obviously after the first couple of weeks and everything shut down, it was a complete shock to obviously the entire system. The manpower etcetera, being not a priority product. It was a threat to their livelihoods. So obviously lot of leadership, one on ones. But what we did with the sales team is obviously is the first thing we realized that we had the sales force automation solution that we had been working with Bizom for these last several years.
Obviously the first thing we did was we deployed tele calling. We deployed the tele calling feature immediately on SFA. That initially helped us to start essentially capturing orders. We started getting orders and our distribution channels that we just explained to you. Our distribution channels also work on four different channels – general trade, modern trade, e-com and on-premise. On-premise as a business, as we know, bars, restaurants were completely shut down and obviously are not even open as of today as we speak.
Modern trade is good thing for us is that the orders kept coming through because obviously there was a demand for the products and we were able to service that and we keep servicing that. However, the big challenge was the supply lines. The supply lines shut down because all our distributors essentially shut shop on two accounts. Number one, they didn’t have permit. Second thing is they didn’t have warehouses. Sorry in the sense, we didn’t have the manpower to manage those warehouses and deliver the stock.
So what we did? We did a complete business review. We spent a lot of time in that after the first few weeks, we did a lot of primary, secondary research. Talking to companies, looking at what’s happening in Europe, China, etc. And we also looked at our group portfolio. Okay. Because as a group not too many people know this – the Narang Group, we also have several other products like water, tea, chocolates, coffee, etc. And we suddenly started to basically get insights and this was the key thing to us. We started breaking the insights into two pieces because that was the way we decided to move forward. We decided, let’s look at demand insights, which is what’s happening with the consumer. And we said, let’s look at the supply insights, what’s happening in terms of how we’re getting this product out there.
The key insights for phase one, which was like what you guys know and we’ve seen this, you know, we saw that consumers were stocking up on essentials, fresh foods, panic buying, quarantining themselves with personal care stuff, online ordering. We saw lot of online ordering happening around this thing. And they stopped eating out. They stopped spending, going out. But during the lockdown, which is that often those first fifteen days, suddenly the consumer insight started being proactive, health minded. They wanted to buy healthier products, something for immunity, functionality, you know, protect themselves at home. We saw people wanting to buy vitamin supplements, vitamins, minerals, etc. Glucose.
Home delivery, which we all used to consider as a free for all had suddenly become a convenience paid-for service. Consumers are ready to pay for it, which is amazing. And we saw multiples modes of ordering. I guess each of us, including all of y’all would have 10 apps on your phone and 10 phone numbers to call groceries. It became literally that. People were ready to pay for quality.
When we took these insights, we broke our portfolio down. We noticed that in our group portfolio, we actually saw a lot of demand for water, which is just basic water, tea, coffee. And this is what happened because these were essential categories. Then in the second, the two weeks post that we suddenly started seeing demand for nutritional products that we had. So, for example, our juices, our flavoured water because they have vitamins, they have glucose, they have minerals, and this is what’s started to happen.
The third phase based on global data, what we’re now getting, which is coming out from Europe and China and stuff like that, is once the consumer has basically stocked up with the essentials and starts buying all the immunity nutritional stuff, they will start now obviously saying, you know what, I need something to indulge myself. And that’s where suddenly we started seeing slowly threads of demand for our chocolates because people want to buy chocolates at home. You don’t want to consume chocolates as exotic.
Energy drinks. So that’s the third phase that we’ve seen, which is the indulgent phase. So we took a few actions concretely. A few actions in terms of the consumer. We obviously stopped the media spends. I mean, those were concrete steps. Trade marketing, we stopped our investment. But the key ways of how we went about it were we said – we have two challenges. We’re getting orders now, but we’re not able to fulfill because the supply lines have collapsed. So, as a team, we worked on some action points and said how can we come up with ways to fulfill?
There were 2-3 ways that we came up with this. One way obviously was working with our current distributors and saying, you know what? Let’s get the permits. Let’s help you get the permits, because they weren’t able to do it themselves. So we engaged with them and helped them to get the permits by getting some clearances. Not all of them, but we are at least 20-30 percent of that.
For distributors, who were not able to get the permits, we started direct store delivery. That means we were picking up a product from essentially either our warehouses and supplying to modern trade. Or we were picking up the products from distributors who could open warehouse, but not supply by working with bulk delivery companies like Delhivery. We did a couple of pilots with Delhivery the last couple of weeks and that’s really helped because now they are able to deliver our products to retailers.
Then we also looked at single point delivery as well. Single point delivery, we started working with a B2B single point deliveries like this Swiggy and Zomato and Dunzo which can pick up from point A and deliver to point B. Obviously there are weight restrictions with those solutions, but at least it enabled the product to move from the distributor to the retailer. And obviously it makes sense for high value.
So fulfillment for us became the key. But obviously at the same time, yeah, there was a massive thing that happened with regard to how would retailers even get the product because we were not able to cater to the demand. We opened up a lot of alternative online modes of supply. We started talking to Reliance Jio because they started supplying to retailers directly themselves.
We started engaging with the Udaans of the world and even local marketplaces which were listing stores. Whether it’s the Love Locals, we are talking to the Jumbotails, the Kirana King. So these are local store, market listing places. Obviously, everyone has done the Swiggy and the Zomato store listings. But all of these things, suddenly helped us to actually cater to that demand in the last couple of weeks. Therefore, we’re seeing now better numbers in terms of all our products, whether it is beverages or chocolates and stuff like that. So this is what pretty much has transpired to answer your question on what’s happened.
Lalit: That’s phenomenal. Few things I know because we worked on the logistics-related partnerships. There are a couple of small quick follow up questions on that. I hear you guys were the first ones to get e-passes in Mumbai. What was the Algorithmic jugaad behind that?
Denver: The answer to that is simple. I know a guy. On a serious on a serious note, we had to engage. We work very closely with the Indian Beverage Association. We’re part of the association. They helped us obviously with securing the right amount of government communication and then obviously working with the local authorities in Mumbai, etc. So that helped us with the permits. So that was the first thing in Mumbai. But we struggled in the other places? However, now Delhi, Bangalore, we’re slowly able to start securing some of these permits, moving forward with the communication from the government of essential package food and beverages.
Lalit: Well, one other follow up question on the things that you mentioned. I think this is something that would be interesting for our audience as well. So we talked about, you know, getting that logistics between the distributor and retailers especially when when distributor is not doing the logistics. And you mentioned that I think I know a little bit about it because we worked on these things together. You mentioned about, you know, trying to do delivery through Swiggy and Dunzo and Delhivery itself. Which one of those channels actually worked for you the best so far?
Denver: So far, the bulk deliveries obviously has been with Delhivery. Because obviously they can deliver to multiple retailers, pick up from the DP point from your warehouse and deliver to multiple retailers on the same day within the next four or five hours. I mean, every second day. For us, Zomato which is regard to point to point delivery which is just pick up one large order worth 10,000 or 20,000, deliver to a single A class retailer. That as well has really worked. So I would say these are the two that are so far really worked. Swiggy for us has worked more as a market, more as a Swiggy store where consumers would buy the product, more B2C.
But from a B2B fulfillment perspective, it’s been delivery in Zomato so far which we have tried and we’ve had some amount of success. We’re talking to Dunzo as well right now and hopefully we can go online by next week.
Lalit: Thanks Den. Let me come to you Pradeep. In your business, North of India is the primary distribution for Bail Kohlu and Nourish products. In Delhi, we are almost back to pre-lockdown levels and obviously we are all experiencing larger dropsizes even if there’s lesser number of stores are open. You’ll see larger dropsizes. I think Delhi for us has done phenomenally well, but not so much. I think Uttarakhand has done quite OK as well. But not so much UP. What’s on with UP, what’s on wih Delhi. Delhi has higher cases but still retail is open. And UP’s strange. What’s with that?
Pradeep: There is a basic difference here in that data science comes because we cater to around roughly around 540 odd towns, which we are looking at. A major reason has been that if you look at Punjab. Punjab has been in absolute lockdown. You know, it’s absolutely difficult to reach there. When we had to send one truck to Amritsar, it reached there in 7-8 days from Bareli. That was very complicated there.
In UP, the thing is most of the distributors were operational partially. In the sense they were open up, say, between 6 to 8 a.m. and the rural retail and the town level deliveries. These small-town deliveries which were reachable earlier, were impossible to do. So what the distributor was trying to do was opening up a store and he was letting his warehouse to open between six to eight. The retailers used to come and take this stock because it is an essential commodity. In these times, it is equally important for his outlet to be stocked. Whichever retailer, which we wanted to cater to, who was taking 2-2 cases, 3-3 cases, 4-4 cases, the distributor had absolute reluctance to reach there which we were trying to do manually ourselves.
So the sale size is always smaller with these people. But then if you look at the larger sales size and the larger kitty, it was directly being catered by the distributor itself. So on the secondary sale perspective, yes, the numbers were dropped drastically in UP and it would be completely high in Delhi because of the organized and unorganized market. But if you look at the actual sales figures, perhaps Delhi would remain where it is and UP would have taken a slightly higher jump. Obviously, because of logistical reasons of all the other competitors as well, where it is difficult for them to reach UP and we are much better placed in UP.
So if you look at volumes primary-wise, yes, UP has done much better. Secondly sales, there would definitely be a strong dip. It is difficult. I mean, the more rural you go, the more difficulties arise. It doesn’t matter to him. He won’t say we don’t have the passes whatever. Small, rural area wise, it was much more challenging for us and that is where we are more strongly focused upon right now. Everything else, you can manage in Delhi.
We have so many channel partners. As Denver was saying, you can liaison with people. You have Zomato, Swiggy. You have small business which are trying to get passes to help deliver. You make gun sizes are being delivered is moving in. But in rural it is. It is absolutely difficult. And I think that is one area where the maximum demand still obviously exists, but that is one area that we have not been able to penetrate. Most of the companies have difficulties reaching out to those areas.
Lalit: Some time back in a previous segment about pre-COVID, you spoke about your journey as far as technology is concerned. And I know you guys actually launched new technologies even during lockdown. I mean, this is phenomenal guys because I think every one of us is struggling with just managing day-to-day supplies.
Pradeep and his team launched new technologies during the Lockdown to help the retailers to place orders and for us to get supplies in place. Tell us a little bit of about that. I mean, first of all, how were you so adventurous and bold to launch a new product during the lockdown? How was it? Did it help you at all? How did work for you?
Pradeep: See, we had been actually looking at the scenario since almost a month in advance. We knew that this is going to be a pandemic. It is bound to reach us sooner or later, though we could not predict but symptoms were easily available worldwide. We were obviously monitoring that as well constantly. At the same time, we realize that, you know, this is something which is a requirement for everyone. If we are able to in these times, if we able to reach out to people, this is what will be remembered. This is where we will be. If you have a team which can move in, move out today, not take it as a brand building cause but as a social service cause.
Let’s do something at this time and we will be remembered. Then that is when we will take a look at it. Whether we are building a brand, or not, let us start getting to people because everybody is going to have a shortage. One week into the lockdown, we were already running short of everything. There was no mustard, there was no packaging material. All the packaging material suppliers are based Bombay or Delhi. They were all shut down. I mean, the back end was absolutely stopped. What even if you have a manufacturing facility permission, you don’t have labor and you don’t have the packaging materials. You are still stuck plus you don’t have the raw material.
The idea was to just keep on hanging on to these core products, which we have, because that was more essential, because this has to be delivered. We worked with the local administration in getting the atta and other categories done because there was a bigger shortage of atta. The first thing people did was to stock up on atta. We tried to do little bit of local sourcing of atta.
At the same time, from technology perspective, Bizom obviously. We were pushing your team constantly to ensure that the Distiman is live, up and running. So we moved to the tele calling solution which Denver mentioned. The first week was the tele calling week. But we said, no, we can’t reach people just by tele calling. Besides, you have fifty-five thousand retailers to reach. Even with tele calling, you will tend to miss out, you will have wrong numbers. All the data glitches which you kept in your table for the last couple of years will come out now. You can’t correct it now at this stage.
So we moved on with the Distiman. We moved on with the website for ordering, we moved on with the home deliveries, whatever the cost. If there is a production and it has to reach the client, it just doesn’t matter. If there is one person who wants Bail Kohli oil in the 5-6 states we cover, whatever the cost may be, our guys try to reach there. Somehow, some way, whenever there is an opening, we try to go there and deliver it. This is what the entire team is working on today and struggling to do. The website went on, the store went on, the online portal went on, Distiman was started.
Lalit: Congratulations. Yours was a fast-moving team that backed on technology. KM, I wanted to come to you last in this particular section. Simply because UNIBIC is a rock star in this situation. What we see is when the entire industry was going down, while you did see panic buying, UNIBIC sales have actually grown in the last 3-4 weeks. Especially in the first week of the lockdown, when10-15% of retail stores were open.
That’s impressive. You guys actually had an increase in sales in your key territories like Karnataka, for example. You must have some secret sauce from your experience and your amazing team. I know technology is one part of it. Apart from it, what exactly did you guys do? Can you share it with all of us? All of us want to grow our sales in the lockdown period.
KM: My answer is going to be the same, probably, as Pradeep and Denver talked about. In fact, in your question, the answers were already given. It’s team and technology. Both worked in our favor. You know, honestly, in our case though, it was not necessarily for our people to talk about it. If we do today, good. It’s basically nothing but serving society. People got up themselves. We have a strong team of 10 leaders across India. They workday and night to understand that how we are going to fight back. Karnataka being our home ground, is where it all started and slowly picked up in other markets. In Karnataka, we had control on direct distribution. Some of our partners in transportation and porters. I would definitely mention the name of porter here. They helped us out in terms delivering wherever we wanted.
Our warehouses complied with all the governments rules and worked 24/7. We arranged the passes. Our head of HR took pains to ensure that passes were arranged. Respective, regional managers also arranged passes wherever they could. They arranged passes for the local team and that’s how it started. If one guy is contributing to society, that others will get up automatically. Slowly and steadily, we were able to sell whatever we had in stock.
We have issues in production, which is bound to be because of shortage of labor and shortage of other things. But whatever we are able to manage, we are able to manage. Banglore being in our direct control, last-mile distribution has helped us. Again technology, we call it Bizom, has played a critical role. We knew exactly which retailer, what they wanted, how they wanted. We picked up the right guys. We knew that it will be difficult for us to service 100 percent. We said, OK. In each locality, can we pick up 5, 7, 10 stores and see if we can deliver to them?
So at least the entire locality will have our products. And if not ours, something else. If stores had stock of strong and good competitors like Britannia, ITC, Parle, we decided to visit to other outlets. The idea was not to go and ride on them. Idea is to see that can all of us, the 3-4 large players, can all of us be equally available to every possible retailer so that, it’s equally distributed. The idea was not to ride on, you know, if competition is not there you go and ride on them. But the idea was, if competition is there, let’s avoid that store and go to the store where competition is not able to reach. And how you can manage the equal distribution of biscuits across.
Philosophically if you see, before lockdown and after lockdown, what has changed. So before the lockdown, under normal conditions, an average person eats food 21 times, tea probably 14 times, snacks 14 times in a week. That puts the total to around 35 times.
When you go to office or outside, especially in large cities, half of your consumption is outside home. After lockdown, it has gone to literally zero. You’re not going to office, you’re not going out for food and you are actually avoiding food from Swiggy, Zomato because of various of issues. You’re actively avoiding it. So what you are doing? You are actually pressurizing your wife or yourself to cook food and eat. That’s not easy. You need something ready to eat. You might just have a cup of tea and, you know, dip it, then eat it. Probably biscuit is the best choice.
So from want, we moved into need. Once you move into need, stock is going to be a big challenge. Earlier, cookies or biscuits were consumed 7, 8,10 times a week. This consumption has gone up to 14-15 times now where either lunch or dinner is replaced with tea and biscuit. To make your own food, you have to cook, wash utensils and do 100 things at home. You can’t rely entirely on your wife or your mother and sister. You have to contribute. Unfortunately, instead of contributing, we will try to find an easy solution. In fact, even with Maggie, you have to wash and clean. Biscuits as a category is bound to go.
Lalit: Absolutely. I have one follow up question. So what is this Bizom Search? For the audience, who don’t know why you call it search? Why do you call Bizom Search? I know the story, but I would like the audience to it.
KM: The whole idea of starting Bizom was not to track people and not to find out what they are not doing. We already knew what they were not doing. If you can get 50 percent out of sales guys, that’s the best you can get. If you can get 80%, then it’s my team of star leaders. If you get 100% you will be done. So we expected this platform to probably give us truth. the Truth of distribution, truth of coverage, the truth of availability, truth of depth, the truth of width. So that’s how we named it Search. And we kept calling it Search.
Lalit: To be brutally honest with you, KM, when I walk down for my groceries, the only biscuits I see that are UNIBIC I don’t see Britannia or Parle anymore. So you guys have done phenomenally at least in Bangalore nearby areas to us.
KM: We choose where we are not there and where they are there, there they are.
Lalit: Absolutely. That has worked phenomenally well. And thanks for actually getting some biscuits. I have 2 kids at home. They need cookies. So thanks for doing that.
Other interesting things that you talked about, especially about logistics. I think you talked about Porter and Denver talked about Delhivery as a channel partner. For the audience who is listening, we have created a Telegram group where people share some of those insights in terms of what innovations they are doing on a day to day basis in this phase. I think one of my team members will share the group link on chat.
Join the Telegram group if you want to know some of those innovations. For technology innovations, you can get in touch with any of us and we’ll help you with it. But non-technology innovations are the things shared between all industry leaders. That Telegram group is fairly active and fairly useful in doing that. So do join it if you can.
So we all talked about technology. We talked about the truth coming out. We talked about data-driven decision making and stuff like that. I think we’re running out of time. Let’s talk about your views on the future. I mean, I think we’re discussing backstage. I think we agreed that it is very difficult to say whether the recovery is going to be V or U or W, multiple Ws. So how are you looking at the future uncertain as it is. What are you doing to prepare for it? Both from a technology point of view and from your supply chain, production and others point of view. We will start with you, Pradeep, if we may. So what are your plans for the future?
Pradeep: As you rightly said Lalit, this is the new normal. And this will remain. What we see today is normal now and this will remain the future for the coming days for sure. I hope not. The truth is that if we will, we may keep on having one or the other areas under lockdown, expect red zones happening around us constantly. We need to operate and see this out. We need to keep working on it. What we feel is that the delivery models, which we have been trying to work upon wherein everybody would now like to order whatever they want through different channels. Earlier, pre-lockdown era, people wanted everything from a single source. That was the fact. But when you find such places, I’m not able to deliver everything. Now, I think specifically I want this. And where can I get it from?
And this is what a change is, which we anticipate. And so we need to work on that. Continue the App and the Web stores and, the delivery models, the home delivery, which is direct. You know, we were not even B2B earlier. Imagine having for the last 40 years working through the factory premises and whoever wants pays advance and tastes it. Now we are in a place where we are talking about B2C which is like many miles extra walk for us. Two years back perhaps when we started this journey, we wouldn’t have thought that this is what we will do. But this is how it is. And we feel that we will keep focusing upon the end delivery models. We are not bypassing our retailer partners, but through them as well. But the idea is just do last mile. Concentrate on it, ensured that our products are available able to send out. You are able to reach to more and more number of people, you are able to connect with them. Finally, when you are trying to talk about the quality of the product, our entire thought process has been that we would like to offer it to our consumers. Something that they have forgotten or not been eating since the last couple of decades, which has gone down in the streams of adulteration over a period of time. And I think this is the right platform if you’re able to reach directly to the consumer and speak to him and tell them that, okay, this is what we tried to do we couldn’t think of it earlier, but this is what has shown us. This is how it has to be. So this is how we make it. This is where we use technology advantages in the future.
Lalit: So do you think this technology has helped you to be nimble? I mean, because of this ongoing uncertainty, is technology the only thing that is helping you to be nimble and agile as an organization? Is there anything else that you are doing? I mean, apart from technology, it’s also how people use the technology. You can have all the world’s technology. But if they don’t believe in technology, that’s going to be very hard.
Pradeep: Whether you are sitting on tons of data, data does not decide. You need to decipher it, you need to move it and you need to use it. Though people can be intuitive, visionaries, you can have futuristic thoughts and you can move ahead of the curve. Everything is fine. But finally, you need some certain pivotal data point, which you need to utilize, right? So the technology which we are, the way we use it, the way we decipher it and the way we utilize it is what becomes extremely critical. This is what leads to digital. For example, production excellence. In India, labor is cheap.
We are in Bareli and we could have used the same standard thought process of manufacturing edible oil. But we went there, and we invested in a high-end system, which was end-to-end automated. It paid off today. I mean, there was no better time than this. If I have to manufacture that kind of capacity, I would perhaps need 1000, 1200 people to drive it. We would have been blank right now. Had it not been for the technology used there. Same place you look at the difference which comes in. One of our lines is down. It has a remote monitoring and diagnostics system on it. So in this time, you can’t have people traveling. So that helps. Same on this data which we have one terms of the retail sales, which we are doing, the secondary sales which we are doing, the retailer information everybody has. But what he has been to buy, when he is going to buy, is now our time. And that’s where the technology gives us the advantage.
Lalit: I think KM mentioned that as well. And you mentioned it again. So you know who’s going to buy it? When is he going to buy it and what is he going to buy? It’s actually how you utilize technology, not just to make that decision. Actually, one brand I know who has been doing that for years is O’cean. So Den, the next one comes to you.
I think we can agree that for the future technology or data information is going to be important for us to be nimble, make quick decisions, and all of that. But one of the questions that I think this is something Narang Group in general and O’cean does. I have worked with multiple teams across your company. You guys have deep respect for data, technology, information, data-driven decision making, as we call it. How did you guys go about actually getting the organization to move from gut-based decision making to data-based decision making? How did you guys manage to do that? How is it going to be relevant for the future? What do you think?
Denver: So I’m want to just answer the question in two parts. To answer your first part of the question is how do we move? It’s taken years. Working with you, working with the team and the sales guys. It’s every day: have you complied? And is there compliance, stuff like that? It’s taken years to do that. Obviously, it’s paying off today. Where we don’t have to ask the guy what he’s doing. Like what Kartikay said, it’s all about assisting him to just do better in the market. To help him with that and support him with that data. I guess that the philosophy has to work top-down only then it works all the way to the bottom and it works.
With regard to the new ways of working. Again, I’m just going to make it very contextual in terms of what we’ve seen. So 2-3 key insights that we’ve seen so far. Now for phase three, which is all about the new normal, like what Pradeep talked about, home delivery with social distancing. Yeah, that is the way of life. And that’s the reason why the Alibabas of the world became so big in China. Today, we see news of Reliance and Facebook and WhatsApp, etc. So that’s going to be massive.
The second key insight is inclusiveness. Social distance is also going to cause consumers to build their own community, social media chats, WhatsApp? You no longer want to talk about globalization. You want to talk about what’s important for me and for my community and stuff that. So marketing is also going to change in terms of that.
I think a third piece, which a lot of us have to work on is packaging. Bulk buying you touched upon. But there is a massive trend happening right now. What we’ve seen with the consumers who do not want to touch the packaging of the product coming into their house because of the contamination fear. I think a lot of companies would have to work now on primary and secondary packaging in order to ensure that the primary packaging comes its ripped off and then the consumer or whatever keeps the secondary thing. This is going to be a big thing which companies will have to relook at and what Pradeep also talked about, automatic packaging is very, very important because then you’re talking about that zero touch and stuff like that.
How does that impact in terms of the consumer and the retailer. I think a very, very important thing for us. We’re seeing a blurring of lines. Blurring of lines means that retailers and consumer ordering technology is going to basically criss cross again. Retailers and Consumers, Pradeep talked about B2B, B2C, we talked about B2R2C. So, I mean, every company is trying to fulfill every leg of the chain. Yeah. And what’s important now as companies. Yeah. And this is what’s what the key action that we’re focusing on. Number one, how do you capture and fulfill this demand from this consumer? How? Because the consumer has ten different ways to buy. This is what even Pradeep talked about. Yeah. And mapping this consumer journey for each and every product, for example, that we do is very, very important. Whether today he wants to buy from a Grocery or today, he wants to buy a general convenient product, even from pharmacies. Today, pharmacies like Netmeds, and Pharmeasy are selling grocery products. We’re working with and talking to them.
So we’re working with the on-ground guys as well. So he wants to buy it from there. He wants to buy B2C. That means whether it comes home. Dmart as a chain is now taking the products into societies. Spencers is delivering to the consumer at their houses. We haven’t so far built our B2C home, but I think Pradeep I want to call you separately for some inspiration on that one. In terms of stuff that’s happening, it’s amazing. And companies are going across the board.
So if I want to keep things simple. I think the game we still want to understand, which is something called Omnichannel marketing. The game now, guys, has changed, to omnichannel distribution. If you didn’t realize it before, it’s time to wake up because it’s everywhere. Consumer retailer crisscross and technology like for example, Distiman, etc. that also we’re looking to roll out now is also going to help us capture that. But it’s not only Distiman man. It’s also all these different touchpoints that we need to get to. And for us, I think where we also have with the leadership team we also have a thought, do we need to organize our sales structure in the normal way that we would have done in terms of General trade or Modern trade or on-premise, you know, in terms of the classical structures. Or do we re-orient our structures in terms of B2B servicing or B2C servicing? Then you organize your field, your key account managers and stuff like that. So for us Omnichannel marketing and Omnichannel distribution – that’s the way forward. To keep things going. Digital and technology will have just support that.
Lalit: All right, so, Omnichannel distribution. Very interesting term. One specific question, if I may ask you Den. How do you think schemes are going to evolve? The trade marketing is evolving, as you see. I mean, we run things like U.P.S. and other stuff. But now this whole buying patterns are changing. So this month-end is now changing to become the whole month. How do you see that impacting your scheme structures and other stuff?
Denver: So to be very honest with we have actually reduced schemes. Obviously, keeping in mind everyone in terms of companies, in terms of cash flow and cost measures, et cetera. But that’s not impacting the sales. Today the key concern for the retailer and consumer and I talked about this earlier is can you get me the product? Can you get it delivered to me? I’m ready to pay for that even an additional 50 Rupees’ convenience to bring it to my house or to bring it to my shop. So we are reducing trade schemes. We are investing it back now in terms of the route to market where it is required in order to get the product there. I think the last mile is where the investment needs to go now.
Lalit: Last but not least let me come back to you KM for some of the closing remarks and terms of understanding the future. But also, how do you see the sales teams in FMCG? You’ve all been in this age of being on contactless and stuff like that. How do we need to evolve? Den talked about distribution evolving, talked a little bit about scheme evolving. How do you see the future of COVID and maybe you can also touch upon how do you see the sales team and their work evolving?
KM: OK. See, as far as COVID and such issues are concerned, we honestly have a little idea of what is going to happen. Just watching the world, we know that it is going to take for some more days or months. So our approach instead of getting prepared for what is going to happen tomorrow and how we are going to handle it, we’ll see it tomorrow itself. OK, let’s do what we can do the best today. OK. Let’s take care of our people today and be agile, be ready.
Since we were agile, we were able to react within three or four days of this situation. OK. Yes. That is going to be a new normal. There’s going to be a few things which are going to change. But thanks to being in FMCG and that to in food and that too in the essential category, you will have a, you know, a slight advantage. Any challenge which comes on the overall economy is the last bit it is going to hit. That’s one. As far as our business team is concerned, we call it business team. Our business team is concerned. Our first job has been so far is to take care of them. So, you know, whoever is there wherever. We keep issuing the guidelines to them from the first guideline of having mask, hand sanitizer in your pocket, washing your hands in every 10 minutes and keeping distance. No handshakes. From that to today if you still are not comfortable going out, if family is pressurizing of not going out. Don’t go out. Take care of things on the phone, OK? Whatever best you can take here. Ok and ensuring them that their salaries are coming on time. But these things are for today’s scenario. In coming days, let’s see how it comes. OK. But we will find it. Again, as I said, being in food, OK, you would be required and you would be required more and more.
In fact, I definitely see a lot more talent coming back to FMCG and to the food. OK. Who has gone out? Talent includes partners, talent includes the distributors, talent includes the some who would like to invest. We have already started getting queries of people who have gone and, you know, taken our order or initiated some of the consumer durable showrooms and all. They’re saying this is something which, you know, whether we will learn, not we don’t. It’s better we invest back into FMCG.
So that’s started. Already, there are a couple of queries which we are working at. So our field and FMCG space and food space, even in a challenging time, we will have being into a necessity. We will definitely have some of the advantages of having good people with us.
People are being taken care of as usual. They’ve been taken care of. So maybe, you know, we’re one of the few companies where we have term insurance for everybody in our team. And that too a sizable. That’s like if any eventuality or anything happens to anyone. It’s been taken care of in the company and that’s not because of COVID. Otherwise itself we started this system from one and half year. OK. So those things are being as a practice itself.
Lalit: My summary from all those three things that you mentioned, you need to be agile and need to be prepared. To be agile and prepared, you need to have technologies to allow you to quick decision-making, data-driven and stuff like that. You need to partner. I think one of the common things that I heard from all of you is how you guys are partnering with other stakeholders in the market to be successful. I think it would be an interesting thought if we actually could form a community of all the people together where we are sharing the best practices, especially in today’s time. So I think some of you are already in that group. I think all of you can come to that and share best practices. That would be wonderful as well.