“Small and medium scale mithai shops have started closing down due to high rentals, non-opening of malls and lower demand over the past few months,” said Virender Jain, president of Federation of Sweets & Namkeen Manufacturers (FSNM).
Restrictions on social gatherings such as weddings and corporate events have also impacted their sales.
“Already 5% to 10% of the shops have closed since March this year, and more can follow suit,” Jain said.
He said the pandemic is pushing people towards packaged products from branded shops.
Radhey Mohan Aggarwal, director at traditional sweets and namkeen chain BIkanervala, said this is because consumers are confident about branded shops’ hygienic practices and health concerns.
“Overall, the sales have been down by 70% to 80% with negligible demand this wedding season. Bulk demand by companies for events like AGMs was also not there,” Aggarwal said. “However, we have observed that the demand for packed namkeens and mithai has increased since the lockdown was announced in March.”
Organised sector accounts for only 5% of the overall sweets and namkeen market estimated at about Rs 1 lakh crore.
The pandemic has attracted new players in the market such as dairy brands Amul and Mother Dairy that are now selling traditional milk-based sweets such as gulab jamun to meet customer demand for packaged products.
“Consumers will eventually move towards getting a better experience and buying quality products from a branded retail outlet,” said Anurag Bothra, secretary of Madhya Pradesh Mithai and Namkeen Association. “The government is also pushing for modernisation of the sector to implement quality norms and also to keep a check on the tax evaders.”
Sales are down 70% compared with pre-Covid days, he said. “Approximately 10% of the new ventures which began a few years ago have to close shop due to high rental, electricity cost, taxes and even salaries,” Bothra said.
To cut losses, shopkeepers have reduced the working hours and fired employees. A shopkeeper in Delhi said many outlets were offering barely 15-20 varieties of sweets instead 200-300 types earlier.
The industry is hopeful that the government stimulus package for micro, small and medium enterprises will help many traditional sweets makers to join the organised sector with hygienically packaged products and better marketing.
Companies are also expecting private investments under the Atmanirbhar Bharat scheme to manufacture automatic sweet packing machines that are now mostly imported from China and Europe, said Jain of FSNM.
Mother Dairy recently announced a new range of traditional milk-based sweets including milk cake, orange mawa barfi, frozen rasmalai, gulab jamun and rasgulla, to be sold through its 1,500 outlets, general stores and ecommerce in Delhi and NCR. “We have strengthened our sweets portfolio with three new variants in the lockdown phase to offer safe, quality and hygienically packed products to our consumers,” said Sangram Chaudhary, managing director of Mother Dairy.
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1 Comment on this Story
Kali Prasad169 days ago
Increased confidence in branded packaged foods. But, there is a thin line. The food processing companies need to reinforce the customers' confidence by being more informative of their processes and not just ads & hype. Local sweet shops DO NOT BOTHER with hygeinic practices. Even if the owners have good intentions, their staff does not.