Heat beats price hikes: Summer products' sales zoom

MUMBAI: Indians are turning to ice creams, colas, soft drinks and packaged cold coffee to survive the scorching heat, spurring sales of summer products for consumer goods companies and nudging some to upwardly revise their earlier sales estimates for the season.

In a summer of price hikes and broader inflationary environment, firms are however pushing lower price points to the market as they look to sustain demand in one of the key business periods. Besides, consumers in many pockets of the country are going for comparatively smaller packs, juggling budgets and their temptation to give in to summer delights.

Beverage giant PepsiCo, for instance, has launched 250ml packs of 7UP and Pepsi at a reduced price of Rs 10 this season. It has also added 400ml packs of Nimbooz Jeera Soda to retail shelves for Rs 20. The normal non-carbonated variant sells at the same price point but is offered in a smaller 345 ml pack.

"Value and affordability remain key factors when it comes to on-the-go, out-of-home hydration choices. We are seeing strong summer-linked demand across immediate consumption and on-the-go occasions," said Nitin Bhandari, VP & GM, beverages, PepsiCo India and South Asia. Coca-Cola India is seeing strong momentum across smaller pack formats and quick commerce, said Abhishek Gupta, VP, customer development, Coca-Cola India and South West Asia.

Even though demand has remained resilient, consumers have tweaked their buying strategies amid inflationary pressures. Naturals Ice Cream which has hiked prices by 10% on an average is seeing increased traction for smaller and affordable packs in select markets. Consumers are also reducing consumption per occasion but the frequency of consumption has increased, said director Siddhant Kamath.

"This summer has been one of the strongest seasons for us in recent years. The prolonged and intense heat in the country has significantly boosted footfalls, impulse consumption, and delivery demand across markets," said Kamath.

Mother Dairy expects demand growth across key categories such as ice creams and dairy beverages to surpass earlier estimates for the season on the back of strong quick commerce sales volumes, said Jayatheertha Chary, MD at Mother Dairy.

Summers account for a large part of FMCG sales with the share varying across categories but for cold beverages, they make up for as much as 50-60% of sales, said independent consumer consultant Akshay D'souza.

"A stronger El-Nino can further prolong the summer season," said Ajai Thandi, co-founder at D2C brand Sleepy Owl Coffee which has seen packaged cold coffee sales grow by 50-75% year-on-year across channels.
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