Hot summer forecast to boost consumer durables, beverage sales in India

Mercury may stay above normal across most parts of the country from March to May, the India Meteorological Department (IMD) said on 28 February. The country is also expected to witness more-than-usual heatwaves in many parts, following a February that was the hottest on record.

Since the covid outbreak, summer sales have grown in double digits, said Paritosh Ladhani, joint managing director of SLMG Beverages, which bottles beverages for Coca-Cola India. “This year, we are expecting a strong summer; it’s also an early summer. We expect that we will grow in excess of 20% this season compared to a year ago,” said Ladhani, whose company distributes beverages to 1.5 million retail outlets in Uttar Pradesh and Bihar from its 11 bottling units.

Beverage makers are expected to support the rising demand with strong distribution and marketing campaigns. Also, the Indian Premier League (IPL), the two-month cricketing jamboree that kicks off this weekend, is also likely to push sales. Ladhani said products like beverages that sell at low price points remain largely insulated from a consumption slowdown.

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Makers of fans, air-coolers and air-conditioners are also expected to benefit as summer, which straddles the March and June quarters, typically contributes 55-60% of their annual sales.

“We anticipate a good summer and have aligned our suppliers as well as manufacturing capacity expansion plans to fulfil the increased demand in the season,” said Ravindra Singh Negi, managing director and chief executive officer of Orient Electric, which makes fans and air-coolers. The company has established an advanced factory to make fans in Hyderabad.

“The onset of summer this year has been varied across the country, with some regions already experiencing intense heat while others are yet to witness a significant temperature rise. However, the IMD’s forecast of rising temperatures and heatwave alerts is expected to accelerate the demand for cooling solutions in the coming months. The industry is witnessing strong early buying trends, driven by consumers actively prioritizing premium, and energy-efficient cooling products,” Negi said.

As demand rises and manufacturers fill sales channels in a hot summer, air-conditioner sales may grow 30% year-on-year this year, research firm Jefferies said in a report last week. “Despite a high base last year, industry participants expect an average of over 20-25% growth year-on-year in Q4FY25. Demand in tier 3 and tier 4 towns is now supported by consumer financing. New purchases would likely be 90% sales due to the large aspirational middle class,” the report said.

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“Summer has come earlier for us, and the same has been reflected in our sales as well,” said Kamal Nandi, business head and executive vice-president at the appliances business of Godrej Enterprises, which makes a range of consumer and business products including ACs, refrigerators and dishwashers. “We saw approximately 40% volume and 45% value growth in ACs in February 25 vis-à-vis February 24. Refrigerators also saw approximately 20% volume and value growth,” Nandi said.

“Given the market momentum and our strengthened portfolio, we are targeting a 50-70% growth by value in AC sales and 25-30% growth in refrigerators for the upcoming summer season,” Nandi added.

There has been a general slowdown in demand; however, with the growing concerns of heatwaves, companies expect a high demand in cooling solutions this summer season, said Kaleeswaran Arunachalam, group chief financial officer and head of strategy at Crompton Greaves Consumer Electricals Ltd, which makes fans and air-coolers. While demand trends are evolving, seasonal factors and product replacement cycles continue to play a key role, he said.

“We have prepared our inventory levels in anticipation of a strong summer as the IMD has issued heatwaves alerts across the western and northern regions of the country. For us, Q4 and Q1 are historically strong quarters due to the run-up and start of summer season. Even last season, specifically Q1FY25, we faced exceptional sales for our cooling products such as fans and air-coolers. Based on the present on-ground situation, we have prepared stock levels, and channel partners have started channel filling with demand expected to pick-up by April,” he added. Crompton has also raised the prices of fans, its largest portfolio, four to five times over the last 16-18 months.

Consumer goods firms said categories such as deodorants and body wash are expected to benefit as temperatures rise.

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“Personal care categories like soaps, deodorants, body wash usually see an increase in consumption during summers. With the ease of taxation in the budget and more money in hands of the working population, there will be a boost to overall consumption. We expect growth to improve sequentially over the previous two quarters. Our focus will be to ride the wave through access packs and offer a wider range of products at competitive pricing,” said Krishna Khatwani, head of sales (India) at Godrej Consumer Products Ltd. In the December quarter, the company’s standalone sales grew by 4%, while volumes were flat year-on-year.

Demand for packaged consumer goods in the December quarter spiked 10.6% year-on-year in value terms, faster than the corresponding year-ago period’s 6.5% growth, market researcher NielsenIQ India said in its quarterly update. In volume terms, India’s FMCG sector reported a 7.1% year-on-year jump for the December quarter, against the year-ago quarter’s 6.4% growth.

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