Covid-19 pandemic disrupts FMCG sector the most

The much talked about destruction caused by Covid-19 pandemic had disrupted virtually every sphere of life and one sector, which was affected the most, is the FMCG where demand virtually disappeared for almost two consecutive quarters for certain 'non-essential' products. Consumers play an important role in creating the demand for this sector and over this disruptive period, all of us observed how the needs were subtly transformed due to the ever-evolving external environment.

Further, as the situation started to come back to normal, the demand for FMCG goods also showed a distinct pattern of recovery, more for the essential commodities than the non-essential ones. However, as we move to the 4th quarter post disruption, we observed that the recovery of the so-called 'non-essential' sector demand also started gathering momentum, but with a little twist. Consumer consciousness has led to an increased need to back up claims on everyday consumer products with scientific and logical proof.

The so-called big players in the FMCG sector had foreseen this much earlier and started allocating a substantial portion of their revenue to fund the scientific research process. These structured research and development programme helped them justify their claims and more importantly fight liability lawsuits which may arise due to consumer grievance and non-scientifically backed claims on their products.

Let us now look at this issue for the regulatory perspectives. From the government's point of view, a consorted and dedicated effort is already there to regulate this sector, as products in this category such as cosmetics are primarily chemical or herbal derivatives and sometimes the claims are therapeutic in nature in one hand and often tend to cause un-solicited adverse events. The need for regulating this sector was initiated in 2011 when imported cosmetic products or their key ingredients need to be registered with the CDSCO office and obtain clearance from DCGI before they can be marketed.

There is no denying the fact that there is an urgent need for claim studies. Animal model studies are not encouraged for cosmetic products as there is hardly any simulation possible, hence, clinical studies become the main point of reference. With innovation at the core to improve the quality of the products, a well-designed R&D pathway including testing on healthy volunteers is the order of the day. With the shelf life of most of the products ranging less than a year in most of the cases and mounting pressure on marketing and sales makes this investment unavoidable.

There is also a need to carefully examine how the clinical trial process supports branding and how this process can be modified to optimise such a benefit. Mind you that both usage experience and advertising exposure give consumers noisy signals about brand attributes. Consumers use these signals to update their expectations of brand attributes.