Urban consumption is slowing, the middle class is shrinking, and the economy needs a kickstart- almost all Fast-moving Consumer Goods (FMCG) executives had this to say in recent quarters as their profits dipped and revenue slowed.

Yes, the increase in housing and essentials costs is stark and the slower growth in pay has made matters worse for the salaried class, but it is quite a simplistic view to pin consumption patterns on macroeconomics factors alone.

Recent data and reports from various specialist FMCG research firms show that share of sales through online mode, especially quick commerce platforms, is growing multi fold every quarter even as traditional retail sputters.

Q-com spurt

So that brings us to the question — if legacy FMCG products are seeing poor sales, how are Q-com sites seeing robust growth in gross order values and what are people actually buying on these 10-minute instant delivery apps ? While my view may be slightly biased as a premium urban consumer, it is evident that today’s nuclear family households buy differently from our parents’ generation.

Gone are the days of the monthly bulk purchases of value packs and best deals based on pamphlets handed out by your local kiranas. A large consumer segment today buys foodstuffs as they replenish stock, in the click of a button.

Most Q-com sites are designed to capitalise on this behaviour and first search results are often products of their own private label brands- which may not have brand recall in your mind but come with the steepest discount prompting you to just add it to the cart. Similarly, many digital commerce platforms also enter into premium positioning deals with new-age D2C food brands and start-ups to ensure that these brands pop up first when you search for say ‘biscuits’ or ‘snacks.’

While these are mostly unlisted brands and their financial performance is difficult to assess, industry chatter suggests such brands are making brisk revenue.

Changing tastes

And to complicate things further, there is also a large consumer that has completely stopped consuming biscuits, aerated drinks and other heavy-sugar snacks post Covid. They are instead stocking up their kitchens with Makhanas, Palm oil free snacks, Millet ‘murukkus’ or Oats cookies, despite the fact that these make a bigger hole in monthly budgets.

With so much dynamism in today’s consumption patterns, is it possible that legacy players, whose foodstuffs have traditionally lined our pantries, did not judge the direction in which the wind is blowing? Inflation has prompted an urban slowdown yes, but is it possible that a refreshed product category and channel strategy may help industry giants better cushion the economic swings?