The rising temperatures seem to be driving up the pace of growth of summer season products this year, despite intermittent showers in some parts of the country. Last week, Pune saw some rain spells, but heatwave-like conditions continue to prevail in most other parts of India, the Indian Meteorological Department said on Saturday, with temperatures likely to rise by 2-3 degrees over the next few days.
The hot weather has already pushed up the sales of categories such as air-conditioners (ACs), ice-creams and beverages, which ride the summer season in a big way. In the first half of April, these categories reported a growth of 10-15% in terms of sales versus the same period last year, top companies have told FE.
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In particular, the south, west and east regions are showing significant signs of improvement in terms of sales, while the north and central regions are yet to pick up, says Kamal Nandi, business head and executive vice-president, Godrej & Boyce Manufacturing Company, which runs Godrej Appliances.
“The forecast from the Met department is that temperatures are expected to rise in the coming days and could breach the 40-degree-celsius-mark in some regions. Unlike cities such as Mumbai which are both hot and humid, the weather in the north tends to be dry. So, as the temperature increases, the demand for summer products will grow in Delhi and other parts of north and central India.
“Having said that, the demand for ACs is already better than last year and sales growth for the first fortnight of April is around 10-15% versus the same period last year,” Nandi said.
“The summer has just begun. We are seeing initial signs of higher demand for ACs when compared to last year. We expect there would be at least 20% growth this summer versus the summer season last year,” B Thiagarajan, managing director (MD), Blue Star, said.
Typically, categories such as ACs, ice-creams and beverages derive half of their annual sales from the summer season that stretches from the April to June period. Last year, companies were coming out of the third wave of Covid-19 and were not fully prepared for the summer season, sectoral experts said. Plus, inflationary pressures were high on account of the Russia-Ukraine war, which had hurt consumer demand in the June quarter. Unseasonal rains in the month of May had also hit sales, analysts said.
This year, Ravi Jaipuria, chairman of RJ Corp-owned Varun Beverages, PepsiCo‘s bottling partner, said that the heat had picked up since early April. “The first half of April has been good from a demand perspective. And sales for our beverages are growing. Unlike last year, when there were supply-side shortages during the summer season, this year we have stocked up sufficiently and do not anticipate any constraints on that front. We expect to do double-digit growth for the summer season this year versus last year, with the first half of April giving us the required momentum,” Jaipuria said.
Jayen Mehta, MD, Gujarat Cooperative Milk Marketing Federation (GCMMF), the maker of Amul, said that year-on-year sales growth of its ice-creams, beverages and fresh products such as curd (dahi), buttermilk (chaas) and yoghurt had touched 12-15% in the first half of April, with the likelihood that it would go up in the April-May period as temperatures rise.
“If the heatwave continues the way it is, then sales growth will increase, as demand will shoot up for ice-creams, beverages and fresh products. We see year-on-year sales growth touching the high teens by April-end and breaching the 20% mark in May. Overall, sales growth for the summer season this year should be higher than last year’s summer season by at least 20-25%,” he said.
Manish Bandlish, MD, Mother Dairy, says that he expects ice-creams and beverages to grow by over 20% this summer versus the same period last year.
“Summer is the most anticipated season for our value-added products. With the prediction of a surge in temperatures this year, we have strengthened our cold-chain infrastructure, added new ice-cream and beverage lines and introduced new variants in both portfolios,” Bandlish said.