The fast-moving consumer goods (FMCG) industry, one of which is food and beverages, is immensely affected by COVID-19. Even though the community badly needs this sector, there is a good trend in consumption in the second quarter of 2020 as it indicates growth.
“Household consumption is now increasing after fell 5.02% to 2.84% during Q1, with 44% coming from food and beverages. Even though 50% of our per capita expenditure is for food, the portion of processed food reaches 17%,” said the Chairman. General Association of Indonesian Food & Beverage (GAPMMI) Adhi Lukman.
So it is not surprising that there is a correction in the prediction of growth in the food and beverage industry, which reached 7.97% last year. Adhi predicts that during 2020 it will only grow by four to five percent, from the initial prediction of 8%. Kalbe Farma CEO Vidjongtius agreed with this. He sees that the first quarter’s effects will not much affecting too much and will have a profound impact in the second quarter, were not only for public consumption but also for the supply of FMCG products to Indonesia.
“Supply from China, India, to Europe is stagnating. They must prioritize domestic needs first, then export. The demand itself has increased two to three times during the COVID-19 period, especially for health-related products. Usually four to six months of stock,” he said. now it runs out very quickly, “said Vidjongtius.
Apart from decreasing consumption, there has also been a shift in consumer habits. According to Adhi Lukman, people are now more aware of organic food. Sales channels are again starting to shift online. Plus, because of emergency COVID-19, people have also become aware of saving money. Then regarding the brand, people where now seem to care more about function than the prestige of the product name.
This situation becomes a concern for the Founder & Chairman of MarkPlus, Inc., Hermawan Kartajaya, that every brand should take an extra effort to restabilize it. “With conditions like this, maintaining a brand is a challenge. Brands must be adaptive to various conditions, including COVID-19. Now brands must quickly switch to online platforms. If it can’t adapt, consumers will leave behind,” said the marketing expert.
There are still improvements
However, not all food and beverage sectors declined. Several types seem to have increased due to the trend of work from homes, such as milk, spices, and flour, just like complementary foods such as snacks.
Being at home for a long time makes people need snacks to accompany various work from home activities. Marketing Director Mayora Indah Awin Sirait stated that Mayora products in the early days of COVID-19 still grew positively.
“At least until mid-April. After that, it was especially entering the fasting period is quite challenging. Because we have the principle of the festive season, it should use the moment for growth. This means that if it grows, it must be servicing, not surviving,” said Awin.
That’s what Mayora did too. They are currently focusing on communicating products in a relevant way. Usually conveyed from the emotional side, now Mayora products are expressed in terms of function, especially by promoting their health function.
Besides, the satiety factor is also a priority in product communication. Plus, with reduced consumer traffic to stores, channels such as e-commerce have become a mainstay.
However, even though offline outlets are rarely visited, convenience stores are still in demand by the public to buy daily necessities. Launching regional data, Otsuka Indonesia’s President Commissioner Harry Bagyo stated that this small, modern shop is increasingly becoming the choice for people to buy daily necessities.
The factor of being close to the house is a trigger. “If compared to supermarkets or wholesales, the price is much higher. However, with the current conditions, the increase was felt up to 47 percent for the regional area,” Harry concluded.
