Hygiene products fall out of favour as Covid cases dip

If you thought the pandemic has brought about long-term behaviour changes across the population, you could be wrong - several companies are either exiting some immunity enhancing, health and hygiene product segments, or scaling down production as their sales have slumped.

Firms such as Dabur, Parle Products and Emami have already exited the hand sanitiser segment, and Emami is now withdrawing from the home hygiene segment with products such as disinfectant floor cleaner, surface sanitiser and dish wash gel after their sales dropped significantly in the quarter ended September amid lower Covid-19 infections and increased vaccination.

"Consumers are getting back to pre-Covid lifestyle, proving false all predictions made during Covid that these products will continue to do well even when the pandemic moderates," said Mohan Goenka, director at Emami.


Sales of immunity products including tulsi and turmeric tablets are getting back to pre-Covid levels, while growth rate for chyawanprash has moderated, he said. "Except chyawanprash, we have reduced production of all other products. For sanitisers, the business is almost zero even from high-growth channels like ecommerce."

Hindustan Unilever, the country's top fast-moving consumer goods (FMCG) maker, confirmed a decline in sales of hand sanitisers and hand wash in the last quarter, but is confident that people will stick to habits that will help check spread of viruses even after the pandemic.

"The heightened awareness of hygiene will not border on obsessiveness like it did last year, but it will certainly become a very important behaviour point going forward," HUL chairman Sanjiv Mehta told investors during its recent earnings call.

"Hand wash and sanitisers were going through like a bullet train," he said. "Now what we are seeing is hand sanitisers and even liquid hand wash are moderating."

As per data from Bizom, a sales automation firm that transacts with 7.5 million retail stores, secondary sales or orders by retail stores from distributors for home care hygiene segments including toilet cleaners, dish wash and fabric care fell 8% year on year during the quarter ended September.

The decline was significantly higher in the personal hygiene space, with hand wash witnessing a 37% fall and sanitisers shrinking 43%.

"In homecare hygiene products, where brand loyalty is not very strong, there has been an increase in consumption from store brands, especially in modern trade and online channels," said Akshay D'Souza, chief of growth and insights at Mobisy Technologies that owns Bizom.

"Also, sanitiser production was in short supply during the first wave, which impacted distribution, but when operations got streamlined, companies have been struggling to move stocks as there were hundreds of brands," he said.

As per industry estimates, the market for immunity products fell 18% in the last quarter, compared to 61% growth in the same period last year. Dabur India CEO Mohit Malhotra said health supplements including chyawanprash and honey reported muted performance in September quarter on a very high base. However, the two-year compounded annual growth rate for these brands were more than 20% with the company growing its market share.

While demand has fallen, sales are still higher than what it was in pre-Covid in categories like chyawanprash and disinfectant. Malhotra said the strong tailwind for chyawanprash and honey helped improve their penetration during the pandemic with the former's penetration doubling to 8%.

ITC Ltd, in its September quarter earnings release, said the Savlon range of health and hygiene products witnessed marked demand volatility and moderated sequentially in line with reduction in Covid cases though it remained significantly above pre-pandemic levels.

The number of Covid-19 cases in the country has been declining on a week-on-week basis after the devastating second wave when public health infrastructure was severely strained earlier this year. The country has completed over 109 crore Covid vaccination with more than 78% of eligible adult population covered with at least one dose and 36% plus fully vaccinated.