Cola, Ice-cream & AC Sales Siz­zle on Heat Wave AC sales up over 50% last fort­night; early on­set of sum­mer likely to re­sult in record sales for th­ese prod­uct seg­ments, say ex­perts

The Economic Times - - Business Of Brands -

Wri­tankar Mukher­jee & Ratna Bhushan

Kolkata | New Delhi: Heat waves in sev­eral parts of the country may have reached dan­ger­ous lev­els, prompt­ing the weather de­part­ment to is­sue a warn­ing, but they have brought some re­lief to mar­keters of air­con­di­tion­ers, re­frig­er­a­tors, bev­er­ages and ice-creams who were reel­ing un­der poor de­mand since Di­wali.

Sales of air-con­di­tion­ers have jumped more than 50% year -on-year for the last fort­night and re­frig­er­a­tor sales are up by 18%, in­dus­try in­sid­ers said. Soft drink sales have surged 15%-20% while ice-cream sales are up 30%-40%. The early and sud­den on­set of sum­mer, marked by heat waves and scanty pre-mon­soon rains in most parts of the country, has caught sev­eral consumer goods mar­keters un­awares and there is al­ready a short­age of air-con­di­tion­ers and re­frig­er­a­tors in sev­eral mar­kets, ac­cor- ding to trade sources.

In­dus­try ex­perts said the early trends point to a record sum­mer quar­ter for th­ese prod­uct seg­ments.

“Af­ter years, sales have surged from March it­self,” said Pradeep Bak­shi, pres­i­dent and chief op­er­at­ing of­fi­cer at Tata-owned Voltas, lead­ing air­con­di­tioner maker in the country.

“Since air-con­di­tioner sales is di­rectly pro­por­tion­ate to dis­com­fort, the high tem­per­a­tures since March should lead to a strong in­dus­try growth this sea­son,” he said. Voltas has sold more than dou­ble the air-con­di­tion­ers of what it had sold last year dur­ing the first fort­night of April.

LG In­dia, the other top player in this mar­ket, re­ported dou­bling of air-con­di­tioner sales in some mar­kets, while over­all sales grew by 50% in South and West, with East and North too pick­ing up now. Vi­jaya Babu, LG In­dia's busi­ness he- ad for air-con­di­tion­ers, said de­mand is high even from tier two towns like Pa­tiala, Anand and Vi­jayawada. He said the real sur­prise has been Ben­galuru, which is tra­di­tion­ally one of the smaller mar­kets due to its usu­ally pleas­ant and mod­er­ate cli­mate through­out the year, but has re­ported high­est growth this year. Cola trade in­sid­ers said both Co­caCola and Pep­siCo are see­ing a re­vival of sorts in con­sump­tion of aer­ated drinks on an av­er­age of 15%-20% al­ready. “De­mand is up and we’re see­ing com­par­a­tively higher growth rates this sea­son af­ter a lull. Vol­ume growth re­mains higher than value growth,” a top of­fi­cial from the in­dus­try said. Both the bev­er­ages gi­ants had seen sales stag­ger­ing to low sin­gle dig­its or even slid­ing over the past five-six quar­ters. Over the last cou­ple of months, Coca-Cola had halted pro­duc­tion at plants in Andhra Pradesh, Jaipur, Ut­tar Pradesh and two in the North­east, cit­ing lack of de­mand.

Sea­sonal sum­mer prod­ucts, too, are see­ing brisk sales. “Consumer de­mand of some of our sea­sonal prod­ucts is near dou­ble that of last year,” said Sub­hashis Basu, busi­ness head for dairy prod­ucts at Mother Dairy Fruit & Veg­eta­bles. RJ Corp-owned ice-cream maker Cream­bell has al­ready in­creased its tar­get for the quar­ter, its chief ex­ec­u­tive Nitin Arora said. He claimed Cream­bell has been out­pac­ing in­dus­try growth by 50%.

The In­dia Me­te­o­ro­log­i­cal De­part­ment has pre­dicted higher than nor­mal tem­per­a­ture for this month and weather web­sites have pre­dicted sim­i­lar weather in May as well.

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