Demand for air-conditioners, now a must-have in middle class homes, and air coolers has spiked, and there is robust sale of refrigerators.
“This looks to be one of the best summers for the industry,” said Kamal Nandi, business head and executive vice-president at Godrej Appliances.Vijay Sales director Nilesh Gupta told TOI that this year could be the best summer in the last 10-15 years with the sector expected to record a more than 30% growth over last year. Last year, the AC market grew 15%, while refrigerator sales were almost flat, industry sources said.
Several ice-creams and cold beverage players too expect sales to jump 20-30%. Riding on the summer heat, ice cream maker Baskin Robbins is expecting a year-on-year sales growth of close to 20% this season. Demand for the brand’s sundaes and dessert options have increased manifold, said Mohit Khattar, CEO at Graviss Foods, which holds the master franchise rights of the American brand in India.
Naturals Ice Cream is seeing a double-digit growth across all zones and aims to close the season with a 30% growth over last year. Its tender coconut and mango-flavoured ice-creams are flying off shelves. “E-commerce has grown significantly, and due to the heat wave, consumers are preferring home consumption during day time,” said director Srinivas Kamath.
Beverage giant Coke seems to have found its fizz in Cola with the brand ramping up distribution to reach more consumers. “In India, we are always attuned to market dynamics and consumer preferences,” said a spokesperson at The Coca Cola Company, refusing to give any colour on sales. Mondelez-owned powdered beverage Tang claimed that the year has started on a strong note. As it competes with a bevy of other players in the market, the brand is trying to build engagement with consumers through presence across touch points, said Nitin Saini, VP (marketing) at Mondelez India.
Unlike in some other categories like fashion and the broader fast-moving consumer goods, where executives have been pointing at a demand gap between the mass and premium markets, the durables space is seeing traction from both the segments. “We all have been saying that there is an inflationary pressure on the mass markets and therefore consumption of discretionary products is under pressure. But given the type of heat that we are witnessing across the country, refrigerators or ACs have no longer remained a discretionary category. It has become a necessity. Heat is beating inflation,” said Nandi.
In the consumer durables space, overall demand is driven by AC, but the category being premium in itself, entry level products are finding more space in consumers’ shopping carts, with consumer finance playing a crucial role.
For Blue Star, for instance, 90% of the customers purchasing ACs are first-time buyers of the product and about 60% of them are from small towns. “Within households, ACs can be installed in multiple rooms and therefore the growth potential of the category is huge,” said MD B Thiagarajan.
Haier Appliances India has projected a 35-40% growth in sales of ACs and 30% for refrigerators this (entire) year while for Godrej Appliances, the refrigerator category is clocking a consumption growth of more than 30% while ACs are seeing a growth of 60%. “Brands are balancing both trends (premiumisation and mass market) by diversifying their portfolio,” said Alok Tickoo, executive vice-president at Llyod, a brand owned by Havells.