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Curd, Chaas, Ice cream, Flavored milk demand to pick up with rising mercury

March 18, 2024
9:42 am
GMT+5:30
Updated 4 months ago

Makers of beverages, ice-creams, air conditioners and coolers are anticipating strong demand for their products this summer season as mercury levels rise. The Indian Meteorological Department (IMD) recently said that the March-May period this year would be long and dry, with more days of heat waves and above-normal temperatures across the country.

This is good news for consumer firms, who are dependent on summers for sales, since it comes on the back of two years of unseasonal rains during the summer months. Most expect sales growth to be in the region of 30-50% across categories this summer season versus last year.

“We expect around 30% sales growth this summer for our brands versus last year. We are already seeing temperatures rise in the south and east markets, both in the day and night. Temperatures are rising in the west, like in Mumbai, but evenings are still pleasant. While the north should pick up in terms of temperature by early April,” Kamal Nandi, business head and executive vice-president, Godrej Appliances, said.

Jayen Mehta, managing director, Gujarat Co-operative Milk Marketing Federation (GCMMF), the maker of the Amul brand of ice-creams, beverages and dairy products, added that he was anticipating a 50% year-on-year sales growth this summer for his products.

“Last year was a washout for summer products because of the unseasonal rains and overall fall in temperature during the period. Against that base, we expect a 50% sales growth in ice-creams, beverages and milk-based products such as butter milk (chaas) and lassi this year. We are already seeing demand pick up in some markets. This will steadily improve as the heat grows between April-June,” he said.

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Typically, categories such as ACs, ice-creams and beverages derive half of their annual sales in the period between April and June, when temperatures begin to peak, experts said. A prolonged summer will mean that companies will have to plan for both full production and distribution during the period.

“We have invested up to Rs 50 crore in augmenting capacities to ensure product availability across our markets of operations. As we get into the season, we have over 30 new products including a range of around 20 new ice cream products followed by Greek yoghurts and other dairy products,” Manish Bandlish, managing director, Mother Dairy Fruit and Vegetable, said.

ITC Foods is proposing to add more distribution outlets this year to take advantage of the anticipated growth within the category.

“We doubled our distribution numbers over the last two years when it comes to beverages. We are estimating an increase of 30% in the count of dealers for our juices this year over a significantly large base,” said Sanjay Singal, COO, ITC Foods’ dairy and beverages division.

Singal also added that the company was adding new flavours at multiple price points within its beverage portfolio to improve sampling and sales. This includes a new B Natural Gluco Orange variant, a Sunfeast Supermilk Vanilla Shake as well as an “access pack” of a B Natural Coconut Water at Rs 25. Currently, the company has 12 variants in B Natural juices across tetrapack and PET formats. Five variants under Sunfeast milkshakes and four variants under Sunfeast smoothies.

Varun Beverages, which bottles PepsiCo products and counts India, Sri Lanka and Nepal among its top markets, said that it was growing its production capacity in juices and value-added dairy as well as strengthening its distribution and chilling infrastructure ahead of the crucial April-June period this year.

“The industry confronted unseasonal rains during the summer season in 2023, which impacted sales. While the sector has adjusted to evolving consumer preferences, summer 2024 should be better,” it said in its 2023 annual report released last week.