This summer has been the best in three years for the cooling appliances and beverages sectors, with heatwave across the nation, a delayed monsoon and stable prices driving demand for air-conditioners, refrigerators, cola and cold beverages.
Sales of air-conditioners and refrigerators increased 15-18% on year during March to May, as per industry estimates.
Cola makers’ business has grown 10-15%, driven to a large extent by low and no-sugar variants on a smaller base compared to the larger core business, prompting companies to step up production in peak season, beverage industry officials said. Sales of ice cream and cold beverages too have shot up by more than 20-22%, industry executives said.
For the white goods industry, the pick-up in AC and refrigerator sales has come as a big respite after tepid demand for the overall industry for three years when sales were hit due to various reasons including demonetisation, implementation of GST, price increases because of rupee depreciation, and not-so-strong summers.
“The heatwave pushed up sales and there has been no disruption due to elections,” said Kamal Nandi, business head at Godrej Appliances, and president of industry body Consumer Electronics and Appliances Manufacturers Association. “While AC prices have remained stable since last year, refrigerator prices have declined by 4-5% from last summer due to cut in GST rates boosting sales.”
AC sales volume has grown by 15-18% in March to May, led by 18-20% jump in sales in April and May, while refrigerator sales have grown by 14-15% so far this summer, industry insiders said. Sales had picked up only late March due to the delayed onset of summer.
Pradeep Bakshi, managing director at Tatas-owned Voltas, the country's largest AC maker, said there is healthy demand from first-time buyers due to a rise in night temperatures. He said Voltas' AC volume sales are already up by 50% this summer and is continuing even now due to heatwave in the north.
RS Sodhi, managing director at Gujarat Cooperative Milk Marketing Federation that owns the Amul brand of milk products, said, “Prices had remained stable during summer this year due to stable commodity and input prices, increasing consumption.”
A senior beverage industry official said the overall category is showing good growth this season. “Rapidly shifting consumer preferences trends are seeing resonance and there’s also traction of nonsugary, diet and other hydration options,” the person said, requesting not to be named. “Hence, the overall portfolio is gaining volume share.”
Coca-Cola officials remained unreachable while PepsiCo declined comment.