Indian consumer goods manufacturers, including those who produce beer, ice cream, and cooling systems, are trying to take advantage of the unusually hot summer by increasing production, introducing new items, and increasing marketing expenditures.
The most populous country in the world anticipates 10 to 20 heatwave days this year from April through June, as opposed to the typical four to eight days. The nation defines heatwave days as temperatures reaching at least 40 degrees Celsius in the plains. In several cities in the western states of Maharashtra and Gujarat, the temperature has already risen beyond 40 degrees.
Due to the intense heat, appliance manufacturer Blue Star has introduced several new home air conditioner products in an effort to increase income from that line of business by 25% this summer, as opposed to just 5% last year.
Ahead of the summer, the American ice cream company Baskin Robbins has introduced 20 new items in India.
According to Akshay Mokashe, Senior Research Analyst at Axis Securities, "An exceptionally hot year will significantly impact the sector and uplift consumer discretionary companies' demand for selling air conditioners, fans, fridges, etc." He also stated that the company will report robust growth numbers for the first quarter of the current fiscal year.
Summertime benefits cooling system suppliers greatly, as the season can account for as much as 60% of their yearly income.
Although the industry previously claimed that less than 10% of Indian households own air conditioners, new product introductions from businesses like Johnson Controls-Hitachi Air Conditioning India and appliance producer Voltas, as well as the hotter summer months, are projected to increase that percentage.
"Purchasing an air conditioner is often planned a few months in advance. However, less optimistic summertime projections have also encouraged fence-sitters to buy, according to Deepak Jasani, HDFC Securities' head of retail research.
According to Blue Star's Thiagarajan, who spoke to Reuters, almost nine out of ten consumers this year are first-time purchasers who want for air conditioners after growing accustomed to temperature-controlled areas like workplaces, banks, and theaters.
Last month, the software engineer from Thiruvananthapuram, in the southern state of Kerala, purchased the first air conditioner for his family of four.
"We have always muscled through the hot January-May months, but this year, it is too hot, and it has become too difficult to sleep," Hariharan stated. "Even two fans are not enough."
In India, ceiling fans are the preferred summertime accessory, with air conditioners still regarded as a luxury by most.
To satisfy the rising demand, businesses are expanding their production and delivery capacities.
CEO Mohit Khattar of Graviss Foods, the company that operates Baskin Robbins outlets in India, stated that the company is making sure its "factory is running at full throttle" by expanding its distribution centers to reach retailers and distributors more quickly.
This summer has seen an increase in advertising expenditures as well, in part due to the rising cost of playing slots during India's big general elections, which coincide with the famous Indian Premier League cricket matches.
While Baskin Robbins is increasing its marketing expenditure by up to 25% in order to reach twice as many people through TV and internet advertising, Blue Star is almost doubling its summer advertising budget to 400 million rupees.
Not only are manufacturers profiting from the summer, but delivery services and other businesses are as well.
With pictures of soft coconut, watermelon, and muskmelon, the grocery delivery service Zepto highlights "hydration heroes" on its homepage, while competitors Swiggy and Zomato's Blinkit are putting more of an emphasis on fruits, drinks, and ice cream.
A spokesman for Swiggy said that since the start of the summer, the company has witnessed a 28% spike in demand for cold beverages and juices, coupled with a 43% increase in orders for ice cream. Orders for instant drink mixes and ice cubes have also increased significantly.
There will Probably be more Demand for Beer as Well
"Beer consumption naturally rises with the arrival of summer, necessitating careful planning in production and distribution... as brewery capacities are stretched to the limit," stated Nilesh Patel, Managing Director of Carlsberg India.
It is anticipated that the colder weather would drive up the cost of veggies, eating into disposable income, and reduce time spent outside. However, other economists anticipated that customers would find ways to spend money on the little things. "Eating ice cream or drinking beverages gives people a temporary sense of satisfaction," according to HDFC Securities' Jasani.
