Cool things face the heat

New Delhi, March 22 | Updated: Mar 23 2005, 05:30am hrs
Unusual rains in the North this March may have spelt respite from rising heat for some, but a delayed summer is hurting some others. Producers of seasonal products like soft drinks, ice-creams and air-conditioners (ACs) are wringing their hands in despair as sales across the three categories are believed to have dipped.

On a year-on-year basis, soft drink sales are estimated to be down almost 50% while ice-cream and AC sales are seen lower by about 20%.

A Coca-Cola India franchise bottler said on condition of anonymity that Coke sales had dropped by 50% in February-March period. We have sold only 1.5 lakh cases against 4 lakh cases this month last year, he said.

Coca-Cola India spokesperson, however, maintained that sales were as per the companys target, till now.

PepsiCo Indias largest franchise bottler Ravi Jaipurias group spokesperson RK Gandhi also admitted that sales had been affected due to prolonged winter in the North. Sales in January-February have been okay but in March sales till now have been lesser than last year, he said.

While the January-March period is not exactly the peak season for colas (April-June quarter accounts for the bulk of sales) it is crucial enough to make an impact.

Also, normally, by February it begins to warm up in certain territories like Punjab, UP and Delhi. This year, however, the weather has played spoilsport. Yes, our ice-cream sales have been affected because of a delayed summer but we hope to compensate the loss by higher sales in other regions, Gujarat Co-operative Milk Marketing

Federations marketing head RS Sodhi said.

According to him, Amul ice-cream sales were down by about 10-15% in January-March compared to the same period last year. At the same time the co-operative was witnessing higher growth of about 30% in the West, he said.

Cream Bell, an ice-cream brand owned by Jaipurias and which operates largely in the Northern region, also maintained that sales were affected. According to the companys head Ruchirans Jaipuria, a late Holi this year has added to the woes of the sector. Push cart operations have suffered as most vendors come back from their villages only after Holi, he said.

Similarly, in the AC segment where sales are concentrated in March-April-May offtake is down by about 20%. While a late summer is being held responsible, the industry also attributes the low offtake to uncertainty and confusion prevailing over Vat. Secondary sales are down by about 20%...though its a little difficult to determine whether the slowdown is due to a late summer or Vat confusion, LG Electronics India logistics head SN Rai said.

The silver lining, however, is that companies still have enough time to compensate for the poor startthat is, if the weather gods are kind.