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Early rains halt FMCG, durable firms' summer run

14-May-2004
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Early rains halt FMCG, durable firms' summer run

Premium ice-cream brand Baskin Robbins sold about 6 lakh litres of ice cream last summer. This summer, it expected to sell 30-35 per cent more ice cream.

In March and April this year, it sold 2.4 lakh litres of ice cream, a fairly high amount against the backdrop of sales in the four months of last summer.

In the one million unit air-conditioner market, Hitachi expects to sell 42,000 A-Cs this summer, up from 36,000 last summer. But in March and April alone, it sold 21,600 A-Cs. Similarly, Voltas, the second largest A-C manufacturer, set itself the target of hawking 80,000 A-Cs this summer, up from 55,000 last summer. In just two months (March and April), it clocked sales of 48,000 A-Cs.

For Pepsi too, March and April saw record sales. As a Pepsi spokesperson puts it: “2003 was a great season for Pepsi with successful brand activity starting with the phenomenal exposure the brand received with the cricket World Cup, the introduction of Pepsi Blue and Mountain Dew. 2004 has Pepsi fully prepared for yet another big double digit, almost 30 per cent, volume growth on the back of strong brand activity, capacity and infrastructure expansion.”

This year has so far been a spectacular sales year for companies that cater to the summer products market — ice creams (60 per cent of ice cream sales occur in summer), air conditioners, soft drinks (half of the sales of cola drinks take place in summer), air coolers, fans, beer and so on.

But manufacturers just might be stopped in their tracks by one factor that does not seem to have entered their calculations — the rain gods. With monsoon clouds hovering over the country a little earlier than expected, sales of such wares could crash.

Says Pradeep Patil, senior marketing manager of Bajaj Electricals, marketers of Bajaj fans and air coolers, “The pre-monsooon showers have come as a dampener to our sales. We had planned our production and forecast sales on the basis of an early summer. Though primary sales (trade/company to dealers) are done, it’s the secondary sales (dealers to consumers) that will be impacted. This will put pressure on prices and margins as stocks will remain in the pipeline.”

Adds Kanwaljeet Jawa, vice-president, cooling appliances, at Voltas: “If the untimely rains continue, it will affect sales by 7-8 per cent.”

Still, not everyone is complaining about the early rains. Says R S Sodhi, general manager (marketing), at Gujarat Co-operative Milk Marketing Federation (Amul), “The shelf offtake of ice-creams has reduced because of early rains. However, we have sold about 40-50 per cent more (on a month-on-month basis) than during last summer.”

Last year, Amul, the leader in the ice-cream business, sold 27 million litres and expects to sell 36 million litres this year.

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