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Blip in demand for festive gift packs creates momentum in supply chain activity

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After witnessing inconsistent festive demand in the past two years, on account of the pandemic and subdued consumer sentiments, the festive season this year has finally rejoiced the market with a rebound in consumer sentiments. As on-ground events and travel take place, festive gifting is said to have returned with a bang, resulting in increased demand. Companies are noting that most of the sales are coming from discretionary categories. Gift packs, especially hampers of chocolates, gourmet snacks, premium alco-bev drinks including wines, beauty, and cosmetic items, and household decor, have seen a steep surge in demand.

The Body Shop – a premium cosmetics and skin care products brand has launched over 50 festival-centric gifts in a recyclable pack. Similarly, Radico Khaitan has also introduced new products across different categories, such as Magic Moment’s Vodka Cocktails and After Dark Blue Whisky. Ferns N Petals said the company’s gifting hamper category has seen a 70-80% spike and it has activated alternate sources of supply. Radiohead Brands, which makes Jimmy’s Cocktails non-alcoholic mixers has also reported a 100% growth in volume. The company expects to grow its revenue by 150% over the festive season.

Mars Wrigley India, which makes Galaxy, Snickers, and Twix has said that in e-commerce, its gifting business has doubled over the festive season of last year.

As per experts, retail partners across traditional trade, modern trade, and e-commerce have seen strong off-take this gifting season. The newly-forged segment – quick commerce – otherwise seen fulfilling the household grocery needs, is emerging as a genie for the last-minute shoppers this festive season, by fulfilling their gifting needs in a blink of an eye.

The past weeks have seen companies, double down on stocks. Preventing stock-outs, companies are stepping up supplies across channels and are pushing new launches to feed a demand that’s beating expectations. They are also increasing backend, delivery, and warehousing staff.

The surge in demand is witnessed despite rising inflation. In the past year, the cost of food, fuel, and raw materials has skyrocketed. While prices of a few commodities have softened in recent months, most companies have not reduced prices. Yet, the tendency to spend is the highest this time of the year, and this trend is expected to continue well beyond Diwali.

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