Heatwave effect: ACs, soft drinks, ice cream, other summer goods in short supply in several markets

There’s a 5-7 days of waiting for delivery of a new air-conditioner, several popular packs of top-selling soft drinks are sold out and popular ice cream flavours like chocolate or butterscotch are not easily available in several markets of the East, central, Punjab and Haryana which are under the grip of a scorching heatwave.
Companies are diverting all stock to these markets when summer demand in the overall North is yet to reach its peak. For most companies, sales in the heatwave markets are 2-3 times of last year even when last summer was a bumper one.

Industry executives said if this heatwave continues and North temperature too becomes hot as predicted, there could be a severe product shortage next month despite the industry running production at full capacity for the last few months.

Appliance maker Haier India president Satish NS said the company has diverted all trucks to the states hit by heat waves. “These markets are leading the sales nationally. There is already some shortage of 3-star models and if this high demand continues for another 10-15 days, there will be product availability issues for top selling models,” he said.

Electronics retail chain Great Eastern Retail director Pulkit Baid said servicing the sharp surge in demand logistically has become a challenge. He said sales of AC and coolers have surged two times by number of units sold in April till now as compared to the same period last year.

The weather department -- India Meteorological Department (IMD) – on Wednesday said heat wave conditions have been prevailing in isolated pockets of West Bengal since last eight days, coastal Andhra Pradesh since last six days, Bihar since last five days, Punjab and Haryana since last three days. IMD said maximum temperatures were in the range of 40-44 degree over most parts of central and east India and in many parts of plains of Northwest India.

A senior executive of a large retail chain said some stock keeping units (SKUs) of chilled products such as ice-cream are facing stock-out situations in markets like West Bengal where the heat wave has been sudden. “But the short-fall is mostly on account of general retail channels not being able to stock up because they don’t have enough refrigeration or chiller capacity,” he said.

However, an executive of a large franchise bottling company of soft drinks said production is matching demand so far. “We were expecting this surge and are prepared. Some parts of March and early April were a little slow because of cooler weather in the North, but nationally, production is matching demand,” he said.

Coca-Cola and Varun Beverages (which is PepsiCo’s bottling partner) have said in recent earnings calls that they expect incrementally higher growth over last year amid surge in demand and forecasts of extended summer this year in India.