FMCG, dairy firms betting on strong double-digit sales growth in summer

Demand for ice creams and cold beverages like Cola have surged because of the onset of early summer and sales are likely to grow in strong double-digits this season, according to top executives of FMCG and dairy firms.

The summer season will also get a tailwind in the form of an abatement of the pandemic with increased consumer mobility. This will also help the out-of-home (OOH) segment, where the companies expect a sharp rise in sales after a slump of two years.

Companies are ready with new and innovative offerings anticipating strong demand for their products this season and have started building inventory.

Mother Dairy, one of the leading sellers of milk, dairy beverage products and Ice creams, said it is already "witnessing a surge in demand" with rising temperature and expects the trend to continue in the coming days.

"In line with the same, we have already beefed up our value-chain to cater to any surge in demand across channels.

"For a category like ice creams, which is a highly infrastructure-led business, we have ramped up our production, cold-chain infrastructure, refer vehicles and have invested in asset deployment at our consumer touch points to ensure shelf strength," said Mother Dairy Managing Director Manish Bandlish.

In addition, Mother Dairy is also geared up to entice consumption with the launch of about 15 new variants and flavours this season and excite consumers to explore for more, he said.

"We expect our ice cream category to grow by about 25 per cent in the upcoming season," Bandlish added.

Expecting a good season, companies have also increased their marketing spends on endorsements, brand campaigns etc targeting the consumers.

Beverage maker PepsiCo said it is "excited" about an early onset of summer and this could signify for the beverage sector in 2023.

The company is "optimistic" that its portfolio of beverage brands will be able to meet consumer demand and to help them beat the heat, said PepsiCo India Senior Vice President, Beverages George Kovoor.

"Most of our high-octane, brand summer campaigns are being launched in February itself, and they feature celebrities with mass appeal to further strengthen the connect with consumers and ensure brand love.

"We look forward to a great summer while remaining committed to providing consumers the right products at the right occasions across the beverage portfolio," said Kovoor.

Similarly, home-grown FMCG major Dabur India said a warmer and longer summer would be good for its summer-centric products, particularly its beverages and glucose portfolio.

"We are already witnessing good demand for these products and have started building inventory for the same, both at the retail and stockist end," said Dabur India Chief Operating Officer Adarsh Sharma.

According to Nuvama Group Executive Director, Institutional Equities Abneesh Roy this year, summer would be positive for summer categories like ice cream, cola, fruit juices, beer, cooling hair oil. He expects "strong double-digit sales growth" in these categories.

"Both urban and rural markets will see good demand for these categories but urban will be faster," Roy added.

However, he also added that last time also summer was harsh, so the base is not soft.