Summer product sales surge 40-50% in April as appliance makers worry about shortages

It's been a sizzling April for summer products such as air-conditioners, refrigerators, air-coolers, soft drinks and ice-creams, with sales surging 40-50%. And with demand only set to rise, there are some concerns among appliance manufacturers about meeting requirements, though the food & beverages companies remain upbeat.

Companies selling cooling white goods notched up record on-year figures after almost a decade of tepid seasonal expansion.

They have even had to shift stock - including allocations for May - to the south and east. In these zones, air-conditioner sales have swelled 150-200% due to heatwave conditions prevailing for over three weeks now, companies said. Refrigerator sales are up over 25% and air-coolers by 40%.

In fact, the heatwave has yet to make its presence felt that strongly in the north, which is the largest market for cooling appliances and most summer products. If temperatures rise in the region within the next seven to 10 days, there could be a nationwide shortage of ACs and coolers. Manufacturers caution that it's not possible to crank up output further at present.

Possible Shortage
This is because component planning didn't anticipate this huge surge. "Already, we hear from the trade that some brands are having supply issues," said Kamal Nandi, business head at Godrej Appliances. "It takes over 90 days to get components and hence it's impossible to expand production now. It's the best April we have seen in more than a decade."

KJ Jawa, MD, Daikin India, also highlighted April growth as extraordinary, with companies moving the next month's stock to meet demand. "Hence, if this demand continues and the north picks up, shortages would get pronounced in May," he said.

F&B Spree

Soft drinks, ice-cream and beer companies are looking forward to this summer, with a record number of launches and smoother last-mile distribution on the cards. Relatively cool weather hit sales in the crucial April-June quarter last year. For soft drinks, the period contributes well over half of annual category sales, and a similar figure for beer.

Ice-cream makers Mother Dairy, Amul, Baskin Robbins and Havmor have new products on the shelves. Beer brands Carlsberg and Bira91 said plants were running at maximum capacity, as are those of beverage makers Coca-Cola, Bisleri and PepsiCo.

Jayen Mehta, MD, Amul, said ice-cream sales have surged 40% over last year.

Manish Bandlish, MD, Mother Dairy, said it anticipates a 30% surge in demand for dairy products, including ice-cream, curd and beverages, from last year, across key markets. The company has 20 new ice-cream flavours, Bandlish said, with Greek yoghurt to follow.

Komal Anand, managing director at Havmor India, owned by South Korean confectionery company Lotte Wellfood, said the introduction of a dozen flavours this season is in line with the "evolving preferences" of consumers. "The category has a lot of headroom for growth. To cater to growing demand, we have increased production capacity at existing factories and will service more demand through our upcoming factory in Pune from July-August," Anand said.

Dry days due to the elections haven't dimmed the demand for ale either. Beer makers are ramping up distribution and going deeper into tier III-IV markets.